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Editor's notes: Dane Bowler, who nailed the recent situation with AGNC, believes NorthStar Realty Finance's accretive investments will lead to steadily increasing cash flows and 88% potential upside over the next year.

There is a fair amount of market skepticism when it comes to mREITs. Many have paid dividends in excess of the sustainable magnitude, which temporarily props up the stock price and erodes book value, leading to the eventual crash. Northstar Realty Finance (NRF), however, offers a sustainable and growing 7.99% yield. In this article we will analyze Northstar's fundamentals and demonstrate its cash flows to be sufficient to sustain the dividend. We will then examine its recent and planned activity to show tremendous growth potential. The buy thesis will then be completed with valuation analysis and addressing the counterarguments.

Dividend sustainability

In a previous article, in which we examined the dividend history of the legacy...

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