Top 5 Real Estate Dividend Stocks
The top five real estate dividend stocks today pay a high dividend yield. These stocks include Chimera Investment Corporation, AGNC Investment Corp., MFA Financial Inc., and New Residential Investment Corp. If you are interested in real estate investing, check out our articles on Chimera Investment Corporation, New Residential Investment Corp., and AGNC Investment Corp. We will also discuss the dividend history and outlook of each of these companies.
Chimera Investment Corporation
If you want to reap the benefits of a rising mortgage rate, you might consider buying Chimera Investment Corporation. This real estate investment trust invests in a diversified portfolio of mortgage assets, including agency and non-agency residential mortgage-backed securities. The company has also distributed dividends to its shareholders, giving them an attractive margin of safety. Chimera is trading at its lowest level since 2014, and investors should take note of its recent dividend growth.
The company's current share price is about 4x its trailing twelve-month earnings per share, making it difficult to value. However, analysts use key metrics in estimating the value of Chimera. Its trailing 12-month earnings per share are approximately $0.00. If this number is too low, investors should reconsider their investment. As long as they have a solid understanding of the fundamentals of Chimera's business, they can easily invest in it.
New Residential Investment Corp.
New Residential Investment Corp. (NYSE: NRI) is a real estate investment trust focused on investing in residential real estate. It has several segments, including mortgage loans, residential securities, and servicer advances. Its investment portfolio is made up of both single family rental properties and mortgage loans. The company has a long history of successful investing and has produced over $3.9 billion in dividends since 2013.
During the last three years, New Residential has acquired two companies that are complementary to its core business. The acquisitions helped New Residential add size to its portfolio, enhancing its ability to serve more mortgages and grow its business. It continues to acquire and establish partnerships that add incremental value to its strategy. The following is a brief summary of New Residential's history and current valuation. While investors have been impressed with New Residential's growth and profitability, investors should be aware of its risk profile and history.
AGNC Investment Corp.
AGNC Investment Corp. is a real estate investment trust (REIT) that invests primarily in agency mortgage-backed securities. These securities are backed by U.S. government agencies and provide funds to investors to purchase residential mortgages. The company typically purchases pools of mortgage loans and uses short-term borrowing structured as repurchase agreements to finance these purchases. This type of investment typically yields high dividends. But before investing in AGNC, it's important to know what you're getting into.
Mortgage-backed securities are under pressure from the Federal Reserve's aggressive purchasing program. As a result, the company's cost of capital is likely to rise. In addition, the Federal Reserve's decision to increase its benchmark interest rate is hammering the market value of these securities. The Fed began buying these securities in March 2020, and the numbers are still increasing. But that's a short-term problem, but in the long run, rising rates will benefit the company.
MFA Financial Inc.
MFA Financial Inc. (MFA) is a real estate investment trust that invests in residential mortgage-backed securities, including agency and non-agency MBS. This company is heavily leveraged, and almost all of its revenue is derived from interest payments. Its portfolio is diversified and includes a combination of government-sponsored enterprise and agency MBS, as well as residential whole loans. MFA also invests in a number of private equity funds.
MFA Financial, Inc. is incorporated in the State of Maryland, and is primarily engaged in real estate investment trusts. Its fiscal year ends on December 31st. Its SEC registrations include S-1, Prospectus, Current Reports, 8-K, 10K, and Annual Reports. This information may change as new factors emerge. Therefore, it is important to evaluate the company's risk factors before investing in the company's stock.
Two Harbors Investment Corp.
Two Harbors Investment Corp. operates as a real estate investment trust (REIT). It invests in, finances, and manages agency residential mortgage-backed securities. In addition, it owns mortgage servicing rights and other financial assets. In addition to dividends, Two Harbors Investment also reaps capital appreciation. However, before investing in Two Harbors Investment Corp. stock, consider the company's history. Read on to learn more about the company and its business model.
The company has a history of good stewardship of capital and has consistently outperformed its peer group since 2009. The company's book value has grown over the last five years while experiencing less volatility than other companies. The company also maintains a stock repurchase program. It plans to exchange CYS common stock for newly issued Two Harbors common stock. Investors will receive approximately $15 million in exchange for CYS shares, on a pro-rata basis.