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Reasons to be bullish on MFA Financial Inc (MFA)

  • It has a great yield of 13.57%
  • A five-year dividend average of 12.00
  • A five dividend growth rate of 38%
  • The dividend was increased from 25 cents to 27 cents.
  • It has a free cash flow of $332 million.
  • It has a three year total return of 80%
  • A good free cash flow yield of 13.21%
  • A strong revenue growth rate of 27.05%
  • A good quarterly earning's growth rate of 14%
  • Net income has increased from $268 million in 2009 to $316 million in 2011.
  • Cash flow has been trending upwards from $1.00 in 2008 to $1.07 in 2011.
  • A good long-term debt to equity ratio of 0.35
  • A very strong current and quick ratio of 9.8 and 9.8 respectively
  • A decent interest coverage ratio of 3.16
  • 100K would have grown to 168K. If the dividends were reinvested the rate of return would be much higher. most long term players tend to reinvest their dividends.

Company: MFA Financial

Free Cash Flow = $332 million

Basic Key ratios

Percentage Held by Insiders = 0.59

Market Cap ($mil) = 2631

Growth

Net Income ($mil) 12/2011 = 316

Net Income ($mil) 12/2010 = 270

Net Income ($mil) 12/2009 = 268

12months Net Income this Quarterly/ 12months Net Income 4Q's ago = 17.31

Quarterly Net Income this Quarterly/ same Quarter year ago = 14.59

EBITDA ($mil) 12/2011 = 507

EBITDA ($mil) 12/2010 = 456

EBITDA ($mil) 12/2009 = 522

Net Income Reported Quarterlytr ($mil) = 71

Annual Net Income this Yr/ Net Income last Yr = 17.29

Cash Flow ($/sh) 12/2011 = 1.07

Cash Flow ($/sh) 12/2010 = 1.01

Cash Flow ($/sh) 12/2009 = 1

Dividend 5 year Growth 12/2011 = .

Sales ($mil) 12/2011 = 508

Sales ($mil) 12/2010 = 453

Sales ($mil) 12/2009 = 539

Dividend history

Dividend Yield = 13.57

Dividend Yield 5 Year Average 12/2011 = 12

Annual Dividend 12/2011 = 0.99

Annual Dividend 12/2010 = 0.89

Forward Yield = 13.57

R-squared Dividend Growth 09/2011 = 0.63

Dividend sustainability

Payout Ratio 09/2011 = 1.03

Payout Ratio 06/2011 = 1.03

Payout Ratio 5 Year Average 09/2011 = 2.48

Payout Ratio 5 Year Average 06/2011 = 2.58

Change in Payout Ratio = -1.45

Performance

Percentage Change Price 52 Weeks Relative to S&P 500 = -12.82

Standard Dev Target Price Est = 0.77

Average EPS Surprise Last 4 Quarterlytr = N/A

EPS Percentage Change F2/F1 = 1.62

Next 3-5 Year Estimate EPS Growth rate = 4

Standard Dev 3-5 Year Estimate EPS Growth rate = N/A

EPS Growth Quarterly(1)/Q(-3) = -100

5 Year History EPS Growth 09/2011 = 56.41

ROE 5 Year Average 09/2011 = 7.93

ROE 5 Year Average 06/2011 = 7.34

Return on Investment 09/2011 = 9.42

Return on Investment 06/2011 = 9.43

Debt/Total Cap 5 Year Average 09/2011 = 18.96

Debt/Total Cap 5 Year Average 06/2011 = 17.73

Current Ratio 09/2011 = 9.83

Current Ratio 06/2011 = 3.2

Current Ratio 5 Year Average = 20.68

Quick Ratio = 9.83

Cash Ratio = 8.9

InterEstimate Coverage 06/2011 = 3.16

Valuation

Book Value Quarterlytr ($/sh) 12/2011 = N/A

Book Value Quarterlytr ($/sh) 09/2011 = 7.01

Book Value Quarterlytr ($/sh) 06/2011 = 7.42

Annual EPS before NRI 12/2007 = 0.24

Annual EPS before NRI 12/2008 = 0.21

Annual EPS before NRI 12/2009 = 0.94

Annual EPS before NRI 12/2010 = 0.86

Annual EPS before NRI 12/2011 = 0.97

Price/ Book = 1.05

Price/ Cash Flow = 6.89

Price/ Sales = 5.18

EV/EBITDA 12 Mo = 6.11

P/E/G F1 = 2

Q1 Standard Dev/ Consensus = 0.05

R-squared EPS Growth 12/2011 = N/A

R-squared EPS Growth 09/2011 = 0.43

P/E F1/ LT EPS Gr = 2

Standard Dev Cons Current Quarterlytr = 0.01

Median Estimate Next Quarterlytr = 0.23

Number Annual st in Cons Quarterly3 = 11

Related companies (Peer Group Analysis)

Company: Two Harbors Investment Corp. (TWO)

Free Cash Flow = $151.6 Million

Basic Key ratios

Percentage Held by Insiders = 8.6

Market Cap ($mil) = 2208

Number of Institutional Sellers 12 Weeks = N/A

3 Month Percentage Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 127

Net Income ($mil) 12/2010 = 36

Net Income ($mil) 12/2009 = -9

12months Net Income this Quarterly/ 12months Net Income 4Q's ago = 256.4

Quarterly Net Income this Quarterly/ same Quarter year ago = 212.45

EBITDA ($mil) 12/2011 = 126

EBITDA ($mil) 12/2010 = 38

EBITDA ($mil) 12/2009 = -9

Net Income Reported Quarterlytr ($mil) = 51

Annual Net Income this Yr/ Net Income last Yr = 256.45

Cash Flow ($/sh) 12/2011 = 1.21

Cash Flow ($/sh) 12/2010 = 0.91

Cash Flow ($/sh) 12/2009 = 0.12

Dividend 5 year Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 179

Sales ($mil) 12/2010 = 47

Sales ($mil) 12/2009 = 4

Dividend history

Dividend Yield = 15.52

Dividend Yield 5 Year Average 12/2011 = N/A

Dividend Yield 5 Year Average 09/2011 = N/A

Annual Dividend 12/2011 = 1.6

Annual Dividend 12/2010 = 1.48

Forward Yield = 15.52

Dividend sustainability

Payout Ratio 09/2011 = 0.93

Payout Ratio 06/2011 = 0.88

Payout Ratio 5 Year Average 12/2011 = N/A

Payout Ratio 5 Year Average 09/2011 = N/A

Payout Ratio 5 Year Average 06/2011 = N/A

Change in Payout Ratio = N/A

Performance

Percentage Change Price 52 Weeks Relative to S&P 500 = -10.72

ROE 5 Year Average 09/2011 = 9.1

Return on Investment 09/2011 = 16.4

Current Ratio 12/2011 = N/A

Current Ratio 09/2011 = 1.18

Current Ratio 06/2011 = 1.17

Current Ratio 5 Year Average = 146.63

Quick Ratio = 1.18

Cash Ratio = 0.23

InterEstimate Coverage 09/2011 = 2.99

Company: Cys Investments (CYS)

Free Cash Flow = $-4.5 billion

Basic Key ratios

Percentage Held by Insiders = 1.38

Market Cap ($mil) = 1516

Number of Institutional Sellers 12 Weeks = N/A

3 Month Percentage Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 292

Net Income ($mil) 12/2010 = 22

Net Income ($mil) 12/2009 = 64

12months Net Income this Quarterly/ 12months Net Income 4Q's ago = 1203.91

Quarterly Net Income this Quarterly/ same Quarter year ago = 355.35

EBITDA ($mil) 12/2011 = 345

EBITDA ($mil) 12/2010 = 34

EBITDA ($mil) 12/2009 = 68

Net Income Reported Quarterlytr ($mil) = 44

Annual Net Income this Yr/ Net Income last Yr = 1203.84

Cash Flow ($/sh) 12/2011 = 2.28

Cash Flow ($/sh) 12/2010 = 1.2

Cash Flow ($/sh) 12/2009 = 1.69

Dividend 5 year Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 233

Sales ($mil) 12/2010 = 76

Sales ($mil) 12/2009 = 46

Dividend history

Dividend Yield = 14.74

Dividend Yield 5 Year Average 12/2011 = N/A

Dividend Yield 5 Year Average 09/2011 = 15.05

Annual Dividend 12/2011 = 2.25

Annual Dividend 12/2010 = 2.35

Forward Yield = 14.74

Dividend sustainability

Payout Ratio 09/2011 = 1.2

Payout Ratio 06/2011 = 0.87

Performance

Percentage Change Price 52 Weeks Relative to S&P 500 = 6.03

Return on Investment 09/2011 = 13.08

Return on Investment 06/2011 = 16.83

Debt/Total Cap 5 Year Average 12/2011 = N/A

Current Ratio 09/2011 = 0.01

Current Ratio 06/2011 = 0.01

Current Ratio 5 Year Average = 0.03

Quick Ratio = 0.01

InterEstimate Coverage 09/2011 = 4.93

InterEstimate Coverage 06/2011 = 21.19

Company: Annaly Capital Management (NLY)

Levered Free Cash Flow = N/A

Basic Key ratios

Percentage Held by Insiders = 1.04

Market Cap ($mil) = 15980

Number of Institutional Sellers 12 Weeks = N/A

3 Month Percentage Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 344

Net Income ($mil) 12/2010 = 1267

Net Income ($mil) 12/2009 = 1961

12months Net Income this Quarterly/ 12months Net Income 4Q's ago = -72.82

Quarterly Net Income this Quarterly/ same Quarter year ago = -63.43

EBITDA ($mil) 12/2011 = 1691

EBITDA ($mil) 12/2010 = 2400

EBITDA ($mil) 12/2009 = 2828

Net Income Reported Quarterlytr ($mil) = 446

Annual Net Income this Yr/ Net Income last Yr = -72.82

Cash Flow ($/sh) 12/2011 = 3.17

Cash Flow ($/sh) 12/2010 = 3.39

Cash Flow ($/sh) 12/2009 = 3.25

Dividend 5 year Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 1120

Sales ($mil) 12/2010 = 2635

Sales ($mil) 12/2009 = 3424

Dividend history

Dividend Yield = 13.84

Dividend Yield 5 Year Average 12/2011 = N/A

Dividend Yield 5 Year Average 09/2011 = 12.7

Annual Dividend 12/2011 = 2.44

Annual Dividend 12/2010 = 2.65

Forward Yield = 13.84

Dividend sustainability

Payout Ratio 09/2011 = 0.89

Payout Ratio 5 Year Average 09/2011 = 1.03

Change in Payout Ratio = -0.14

Performance

Percentage Change Price 52 Weeks Relative to S&P 500 = -9.96

Average EPS Surprise Last 4 Quarterlytr = N/A

ROE 5 Year Average 09/2011 = 14.7

ROE 5 Year Average 06/2011 = 14.24

Return on Investment 09/2011 = 14.32

Debt/Total Cap 5 Year Average 09/2011 = 3.05

Current Ratio 09/2011 = 0.04

Current Ratio 06/2011 = 0.06

Current Ratio 5 Year Average = 0.04

Quick Ratio = 0.04

Company: American Capital Agency (AGNC)

Free Cash Flow = $1.01 billion

Basic Key ratios

Percentage Held by Insiders = 0.04

Market Cap ($mil) = 6785

Number of Institutional Sellers 12 Weeks = N/A

3 Month Percentage Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 770

Net Income ($mil) 12/2010 = 288

Net Income ($mil) 12/2009 = 119

12months Net Income this Quarterly/ 12months Net Income 4Q's ago = 167.42

Quarterly Net Income this Quarterly/ same Quarter year ago = 51.15

EBITDA ($mil) 12/2011 = 1137

EBITDA ($mil) 12/2010 = 394

EBITDA ($mil) 12/2009 = 155

Net Income Reported Quarterlytr ($mil) = 209

Annual Net Income this Yr/ Net Income last Yr = 167.43

Cash Flow ($/sh) 12/2011 = 5.18

Cash Flow ($/sh) 12/2010 = 4.13

Cash Flow ($/sh) 12/2009 = 5.22

Dividend 5 year Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 1135

Sales ($mil) 12/2010 = 383

Sales ($mil) 12/2009 = 174

Dividend history

Dividend Yield = 16.52

Dividend Yield 5 Year Average 12/2011 = N/A

Dividend Yield 5 Year Average 09/2011 = 19.21

Annual Dividend 12/2011 = 5.6

Annual Dividend 12/2010 = 5.6

Forward Yield = 16.52

Dividend sustainability

Payout Ratio 09/2011 = 1.07

Payout Ratio 06/2011 = 1.11

Payout Ratio 5 Year Average 12/2011 = N/A

Payout Ratio 5 Year Average 09/2011 = 1.2

Payout Ratio 5 Year Average 06/2011 = 1.21

Change in Payout Ratio = -0.12

Performance

Percentage Change Price 52 Weeks Relative to S&P 500 = -1.7

5 Year History EPS Growth 09/2011 = 5.95

ROE 5 Year Average 09/2011 = 18.51

Return on Investment 09/2011 = 16.39

Debt/Total Cap 5 Year Average 09/2011 = 1.27

Current Ratio 09/2011 = 0.06

Current Ratio 06/2011 = 0.08

Quick Ratio = 0.06

InterEstimate Coverage 09/2011 = 1.75

Conclusion

The Feds have extended the low-interest holiday, and this should prove to be beneficial for REITs. With a proper hedging strategy in place, REITs can perform well even is a rising rate environment. As the markets are extremely overbought, it would make sense to wait for a pullback before committing large sums of money to this market.

EPS, Price, EPS surprise charts obtained from zacks.com. Free cash flow yield, income from continuing operations and revenue growth charts sourced from Ycharts.com. Earnings estimates and growth rate charts for sourced from dailyfinance.com. A major portion of the historical data used in this article as obtained from zacks.com. Consensus estimate analysis table sourced from reuters.com

Disclaimer: This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies-let the buyer beware.

Source: MFA Financial: A Good Long-Term Play?