Mortgage REITs have had a nice market run so far during 2012. However, there are several REITs still within buying range. The best time to buy mortgage REITs when they are trading at or below book value. The REITs discussed below are trading near or below their respective book values. In addition, these mortgage REITs have a 10 rating (best rating) from the MSN StockScouter. I have compiled the list of mortgage REITs with current dividend yields above 12% trading near or below book value.
Apollo Residential Mortgage Group, Inc. (AMTG) is a real estate investment trust that primarily invests in, finance and manages residential mortgage-backed securities, residential mortgage loans and other residential mortgage assets throughout the United States. AMTG posted first quarter non-GAAP operating earnings of $8 million or 0.78 per share, a 53% sequential improvement from the previous quarter. Net income during the same period weighed in at $20.1 million or $1.95 per share. After reconciling operating earnings with realized gains, AMTG reported earnings of $6.8 million, or 0.66 per share. AMTG paid a dividend of $0.75 in the 1st quarter for a current dividend yield of 15.75%. IVR is trading below book value with a price/book ratio of 0.94. Zacks Investment has an outperform rating on AMTG.
American Capital Mortgage Investment Corp. (MTGE) is a real estate investment trust ("REIT") formed in 2011 that invests in and manages a leveraged portfolio of agency mortgage investments, non-agency mortgage investments and other mortgage-related investments. MTGE reported net income for the three months ended March 31, 2012 of $21.3 million, or $1.82 per share, and net book value of $21.78 per share. For the quarter, MTGE was able to generate an annualized economic (or mark-to-market) return of 35% for the first quarter of 2012, through a combination of $0.90 per share in dividends and net book value growth of $0.91 per share. MTGE declared a first quarter dividend of$0.90 per share for an annual dividend yield of 15.2%. Since the August 2011 initial public offering, the Company has declared and paid a total of$19.0 million in dividends, or $1.90 per share. MTGE has a price/book ratio of 1.12. IVR was upgraded by several analysts following its earnings release. Zacks Investment has an outperform rating on MTGE.
AG Mortgage Investment Trust, Inc. (MITT) is an actively managed REIT that opportunistically invests in a diversified risk-adjusted portfolio of Agency RMBS, Non-Agency RMBS, ABS and CMBS. For the first quarter, MITT had net income of $11.0 million, or $0.77 per diluted share (6), and Core Earnings of $10.1 million, or $0.71 per diluted share. MITT had $19.63 Net Book Value Per Share As Of March 31. MITT declared a dividend of $0.70 per share for the second quarter of 2012. The dividend is payable on July 27, 2012 to shareholders of record on June 29, 2012. MITT has annual dividend yield of 13.35%. MTGE has a price/book ratio of 1.07. Zacks Investment has an outperform rating on MITT.
Capstead Mortgage Corporation (CMO) is a self-managed real estate investment trust that earns income from investing in a leveraged portfolio of residential adjustable-rate mortgage pass-through securities, referred to as ARM securities, issued and guaranteed by government-sponsored enterprises, either Fannie Mae or Freddie Mac, or by an agency of the federal government, Ginnie Mae. CMO reported net income of $45,170,000 or $0.44 per diluted common share for the quarter ended March 31, 2012. This compares to net income of $41,968,000 or $0.43 per diluted common share for the quarter ended December 31, 2011. CMO has a Net Book Value Per Share of $12.52 As Of March 31. CMO has a price/book ratio of 1.14. CMO paid a first quarter 2012 dividend of $0.43 per common share on April 20, 2012. CMO has annual dividend yield of 12.16%. Zacks Investment has an outperform rating on CMO.
Invesco Mortgage Capital Inc. (IVR) is a real estate investment trust that focuses on financing and managing residential and commercial mortgage-backed securities and mortgage loans. IVR reported Q1 earnings of $0.72 per share, an increase of 12.5% over estimate, versus the Capital IQ consensus of$0.64. Revenues were $86.7 million, versus the analysts' estimate of $82.83 million. IVR paid a dividend of $0.65 in the 1st quarter for a current dividend yield of 14.39%. IVR has a PE ratio of 5.66 and a price/book ratio of 1.02. IVR was upgraded by several analysts following its earnings release with Zacks Investments having a neutral rating.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.