The commercial real estate market continues to recover. One company that is benefiting by this and by the vacuum left by reduced post crisis bank lending is Crexus Investment Corporation (NYSE:CXS). This company has the additional benefit to income investors of paying a dividend of north of 10%.
7 reasons CXS is a solid dividend play at just over $10 a share:
- It yields more than 10% and has quintupled its distribution payments over the past couple of years.
- Insiders are increasing their stakes in the company. Numerous insiders have added shares over the past eight months.
- The stock is selling nearly 15% under its current book value.
- CXS is selling at 7 times current earnings and the company is producing a ROE of 12%.
- Credit Suisse has an "Outperform" rating on CXS and its price target is $13, solid upside potential given its 10% and growing yield.
- The company is shedding its MBS portfolio, is showing solid credit quality and has another $200mm left to deploy.
- The stock looks likes it bottomed in late summer and is solidly above its 200 day moving average (See Chart).
Disclosure: I am long CXS.