Christopher F. Davis
Research analyst, REITs, biotech, small-cap

Western Asset Mortgage: Could This 20% Yielder Raise Its Dividend?

Lately, investors have lost serious capital in mortgage real estate investment trusts (mREITs). For my followers not familiar with a REIT, a REIT is simply any corporation, trust or association that acts as an investment agent specializing in real estate and real estate mortgages under Internal Revenue Code section 856. The rules for federal income taxation of REITs are found primarily in Part II (sections 856 through 859) of subchapter M of chapter 1 of the Internal Revenue Code. The advantage of being a REIT is that the company is entitled to deduct dividends paid to its owners, and thus a REIT may avoid incurring all or part of its liabilities for U.S. federal income tax. To meet the qualifications,...

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