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If you are an investor interested in high-yielding dividend stocks, you will probably be attracted to Real Estate Investment Trusts (REITs). This article examines five REITs to determine whether they should be in your portfolio.

MFA Financial Inc. (NYSE:MFA) has a market cap of $2.58 billion with a price-to-earnings ratio of 7.53. The stock has traded in a 52-week range between $6.17 and $7.53. The stock currently trades around $7. On August 3, the company reported revenues of $127 million, compared to revenues of $96.2 million in the second quarter of 2010. Second-quarter net income was $77.2 million compared to net income of $46.2 million in the second quarter of 2010. The company reported net income of $262 million in 2010 versus net income of $260 million in 2009.

One of MFA’s competitors is Annaly Capital Management Inc (NYSE:NLY). Annaly is currently trading around $18 with a market cap of $17.6 billion and a price to earnings ratio of 6.75. Annaly pays a dividend which yields 14.5%, versus MFA's dividend yield of 13.8%.

MFA has increased its net income in each of the last five years. This is terrific news for investors, because as an REIT, MFA must pass these increased earnings directly through to it stockholders. MFA is a well-established company that has been paying quarterly dividends since 1998. This is a company that has consistently increased income while paying a large dividend with a high dividend yield. I rate MFA Financial Inc. as a buy.

PennyMac Mortgage Investment Trust (NYSE:PMT) has a market cap of $472.45 million with a price-to-earnings ratio of 9.09. The stock has traded in a 52-week range between $15.34 and $19.31. The stock currently trades at around $17. The company reported second-quarter revenues of $30.2 million, compared to revenues of $13.3 million in the second quarter of 2010. In 2010, the company reported revenues of $44.1 million and net income of $24.5 million.

One of PennyMac’s competitors is Capstead Mortgage Corporation (NYSE:CMO). Capstead Mortgage is trading around $13 with a market cap of $1.10 billion and a price-to-earnings ratio of 8.32. Capstead Mortgage pays a dividend which yields 13.4%, versus PennyMac's dividend yield of 11.6%.

PennyMac is a newly founded company that first traded on July 30, 2009. The stock closed on July 30th at $16.92. Since that time, the stock price has barely changed. The company has done a good job of increasing earnings. PennyMac increased second-quarter revenues by 127% and net income by 103% over the second quarter of 2010. This company does not have a long track record, but it is off to a great start. With increasing income and a dividend yield of 11.6%, I think that investing in PennyMac is a good risk. I rate PennyMac Mortgage Investment Trust as a buy.

Mission West Properties Inc. (NASDAQ:MSW) has a market cap of $419.24 million with a price-to-earnings ratio of 21.66. The stock has traded in a 52-week range between $6.39 and $8.94. The stock currently trades around $7. The company reported second-quarter revenues of $24.8 million compared to revenues of $28.3 million in the second quarter of 2010. Second-quarter net income was $1.88 million, compared to net income of $2.46 million in the second quarter of 2010.

One of Mission West’s competitors is Digital Realty Trust Inc. (NYSE:DLR). Digital Realty is currently trading around $56 with a market cap of $5.55 billion and a price-to-earnings ratio of 53.09. Digital Realty pays a dividend which yields 4.8%, versus Mission West's yield of 6.7%.

Mission West realized a decrease in revenues and net income when compared to the second quarter of 2010. Mission West has struggled with its cash flow and has decreased it dividend by 53.8% since 2008. This company’s lower revenues and net income have caused it to drastically reduce its dividend. I would not invest in Mission West at this time. I rate Mission West Properties a hold.

Resource Capital Corporation (NYSE:RSO) has a market cap of $419.24 million with a price-to-earnings ratio of 12.73. The stock has traded in a 52-week range between $4.26 and $7.70. The stock is currently trading around $6. On August 2 the company reported revenues of $33.2 million, compared to revenues of $28.1 million in the second quarter of 2010. Second-quarter net income was $9.22 million versus net income of $13.1 million in the second quarter of 2010.

One of Resource Capital’s competitors is Walter Investment Management Company (NYSE:WAC). Walter Investment currently trades at around $25 with a market cap of $703.49 million and a price-to-earnings ratio of 33.49. Walter Investment pays a dividend which yields 7.8%, versus Resource Capital, with a dividend yield of 17.6%.

Resource Capital has been unable to achieve steady earnings. In 2010, the company increased net income by 205%. The company’s earnings decreased by 42% from $13.1 million in the first quarter of 2011to $9.22 million in the second quarter of 2011. The primary reason investors buy REIT stocks is to take advantage of the big dividends. However, since 2008, Resource Capital has reduced its dividend four times for a total reduction of 64%. In spite of the volatility, this six-year-old company has paid a dividend in every quarter since its inception, and currently pays a dividend which yields an enormous 17.6%. The company’s stock price has dropped by 13.94% over the last 52 weeks. I do not think that this company’s dividend adequately offsets the drop in the stock price. I rate Resource Capital Corporation as a hold.

Anworth Mortgage Asset Corporation (NYSE:ANH) has a market cap of $928.78 million with a price-to-earnings ratio of 7.95. The stock has traded in a 52-week range between $6.33 and $7.74. The stock is currently trading around $7. The company reported second-quarter revenues of $59.7 million, compared to revenues of $54.4 million in the second quarter of 2010. Second-quarter net income was $32.8 million, compared to net income of $24.4 million in the second quarter of 2010.

Anworth Mortgage is a well-established company that has turned a profit in each of the last 10 quarters. The company has been paying quarterly dividends for more than a decade. The current dividend is $1.00 and yields a whopping 14.2%. In addition to the dividend, the company's stock price has risen by 59% over the last 3 years. Anworth Mortgage has a long record of turning a profit and paying a large dividend. There is no reason to believe that anything will change in the foreseeable future. This stock offers the potential for capital appreciation, along with a consistent income flow. On August 5, CNBC stock analyst Jim Cramer endorsed this stock. I agree with Jim Cramer and rate Anworth Mortgage Asset Corporation a buy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.