3 High Yield REITs to Buy on Dips

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 |  Includes: AGNC, NLY
by: Hawkinvest
We have seen a number of real estate investment trusts raise capital in the past few months. A new Forbes blog post listed Annaly Capital Management (NYSE:NLY) and American Capital Agency Corp (NASDAQ:AGNC) as likely candidates for a secondary offering.
The article states: "History has shown us that companies typically will raise capital when the stock price is at a double-digit premium to book value." Read the full article here.
Just hours after the article came out, Annaly announced the sale of about 100 million shares. Read full details here.
Based on the frequent capital raises by some of these real estate investment trusts, it only make sense to invest, and to buy on dips when the capital raises are announced. Here are stocks to consider when they drop from capital raise announcements:
Annaly Capital Management, Inc., (NLY) is a mortgage REIT company, based in New York. Annaly pays a dividend of about $2.60 annually which is equivalent to a yield of around 14%.

Here are some key points for NLY:
  • Current share price: $17.90
  • The 52 week range is $16.73 to $18.79.
  • Earnings estimates for 2011: $2.53 per share
  • Earnings estimates for 2012: $2.38 per share

The dividend is paid out quarterly at just over 60 cents per share and the next payment should be sometime in September, 2011. These shares look like an attractive long term investment on any dips to $17.70 or less.
American Capital Agency Corp (AGNC) is a mortgage real estate investment trust company, based in Maryland. American Capital Agency pays a dividend of about $5.60 annually which is equivalent to a yield of around 18%.

Here are some key points for AGNC:
  • Current share price: $29.90
  • The 52 week range is $26.05 to $30.76.
  • Earnings estimates for 2011: $4.02 per share
  • Earnings estimates for 2012: $5.47 per share
The dividend is paid out quarterly at around $1.40 per share and the next payment should be sometime in September, 2011. These shares look like an attractive long term investment on any dips to $28.76 or less.
Hatteras Financial Corp (NYSE:HTS) is a mortgage REIT company, based in North Carolina. Hatteras pays a dividend of about $4 annually which is equivalent to a yield of around 13.7%.

Here are some key points for HTS:
  • Current share price: $28.63
  • The 52 week range is $27.12 to $31.98.
  • Earnings estimates for 2011: $4.20 per share
  • Earnings estimates for 2012: $4.23 per share

The dividend is paid out quarterly at around $1 per share and the next payment should be sometime in September, 2011. These shares look like an attractive long term investment on any dips to $28 or less.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.