Seeking Alpha

MREITs digest Anworth's 33% dividend cut

  • The mortgage REIT sector (REM -0.6%) is lower on a bright green day for the rest of the market, with Anworth Mortgage's (ANH -1.2%) 33% dividend cut Friday night offering another excuse to Sell. Anworth is an agency mortgage player, investing mostly in adjustable mortgages. Anworth's new forward yield of 7.5% is so far out of line with the double digits of the rest of the industry, it suggests even more declines are in store for the stock, or big dividend cuts lie ahead for competitors. At $4.19, Anworth is selling for a near-30% discount to September 30 book value.
  • Down the most today is American Capital Mortgage (AGNC -2.7%), and its non-agency cousin, American Capital Agency (MTGE -1.7%) is off sharply as well.
  • Others: Annaly (NLY -1.3%), Armour (ARR -1.2%), Western Asset (WMC -1.8%), Apollo (AMTG -1.4%), Ellington (EFC -0.4%), (EARN +0.2%)
  • Related ETFs: MORT, MORL
Comments (27)
  • Origa
    , contributor
    Comments (543) | Send Message
     
    It looks like the MREITs, are newer going to recover.

     

    It has been in red territory well above 5/6 of the time this quarter. But if you recalculate the drop, today's lower prices off set the decline.
    16 Dec 2013, 03:58 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (699) | Send Message
     
    "At $4.19, Anworth is selling for a near-30% discount to September 30 book value."

     

    Well, book value at Sept 30th was $5.89; a year earlier, book value was $7.45 - meaning it fell more than 20% in twelve months. Maybe that has something to do with why the common trades at a discount to (current) book...
    16 Dec 2013, 04:14 PM Reply Like
  • Positive Concavity
    , contributor
    Comments (152) | Send Message
     
    Seems like over compensation based on extrapolating past trends into the future to create distorted equity valuations.
    16 Dec 2013, 10:52 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (699) | Send Message
     
    That may very well be the case - but it should at least be considered; if you buy hoping the gap will close and book drops more than 20%, you could be in for a big surprise (as people buying last year have found out - their shares have fallen 25% in a year when the indices increased by the same amount); people buying last December were buying at (or at a slight discount to) book.
    17 Dec 2013, 02:22 PM Reply Like
  • daro
    , contributor
    Comments (1530) | Send Message
     
    I remember when some commenter on SA was negative on annaly and he was pummelled by commenters. where are those guys now?
    16 Dec 2013, 04:37 PM Reply Like
  • tomlos
    , contributor
    Comments (1105) | Send Message
     
    Sold a long time ago and broke even...
    16 Dec 2013, 05:33 PM Reply Like
  • Positive Concavity
    , contributor
    Comments (152) | Send Message
     
    I like NLY at these levels - when it trades at a deep discount to book. Been building my position since this past July.
    16 Dec 2013, 10:53 PM Reply Like
  • Positive Concavity
    , contributor
    Comments (152) | Send Message
     
    Meant to say "Been building my position in MREITs since this past July."
    16 Dec 2013, 11:20 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2626) | Send Message
     
    I was one of the "guys" who go pummeled :-) Wasn't even for being negative, just cautious.
    17 Dec 2013, 04:44 AM Reply Like
  • Deehena
    , contributor
    Comments (129) | Send Message
     
    This year and month seems to be a classical set-up for selling losers to offset gains. The biggest losers have been these MREITs. At some point this month they should be a buy
    16 Dec 2013, 04:56 PM Reply Like
  • Cavalaw
    , contributor
    Comments (123) | Send Message
     
    If ARR doesnt cut dividends for next quarter, it will go up.
    16 Dec 2013, 05:31 PM Reply Like
  • Bruce Loeffert
    , contributor
    Comments (111) | Send Message
     
    The waters are going to be rough in the next 3-6+ months as these REITs adjust to the upward movement in the rates of the Ten year note and the potential FED tapering that is inevitable. If you need the money now I say cut your losses and sell. If you have a 2 year plus time horizon you will not be sorry by holding on and reinvesting the dividends. That is your call based on your needs, investment allocation and expectation. If you are intending on holding on long term, just let the fluctuations take their course.... I am long ARR, TWO, NCT, and NRZ. These are long term plays so I am not losing sleep over the downtrend REITs are in at present. Hold the line!
    16 Dec 2013, 05:41 PM Reply Like
  • northhills24
    , contributor
    Comments (1570) | Send Message
     
    Chimera declares $0.09 dividend; estimates book value at $2.98 per share
    Chimera Investment (CIM) holds its quarterly payout steady at $0.09 per share, an annualized yield of 11.8%. The dividends for 2014 Q1 and Q2 are also set at $0.09.Estimated GAAP book value as of September 30 is $3.47 per share; economic book value is estimated at $2.98. This compares to June's estimates of $3.52 and $3.01, respectively.
    not all cut div's.
    16 Dec 2013, 05:42 PM Reply Like
  • whosez
    , contributor
    Comments (107) | Send Message
     
    Others that did not cut: AI, NYMT, EFC, EARN.
    16 Dec 2013, 06:25 PM Reply Like
  • William Packer
    , contributor
    Comments (299) | Send Message
     
    Chimera is a joke. If you want non-agency.. you buy EFC, TWO, or MTGE.
    16 Dec 2013, 07:12 PM Reply Like
  • northhills24
    , contributor
    Comments (1570) | Send Message
     
    tell that to Leon Cooperman.
    17 Dec 2013, 11:41 AM Reply Like
  • northhills24
    , contributor
    Comments (1570) | Send Message
     
    Chimera Investment Corporation Announces Special Dividend of $0.20 Per Common Share.. nice.
    no div cut- like NLY, AGNC etc…
    19 Dec 2013, 11:27 PM Reply Like
  • lstahler
    , contributor
    Comments (151) | Send Message
     
    Dec. 18th NLY will reveal that the div will either remain or go up, as they raised the preferred for Q4.
    16 Dec 2013, 08:05 PM Reply Like
  • xxavatarxx
    , contributor
    Comments (2196) | Send Message
     
    How does one raise their dividend on a prefered stock ?
    It's set in stone unless they don't pay it at all.
    16 Dec 2013, 08:37 PM Reply Like
  • Vking Cheese God
    , contributor
    Comments (2) | Send Message
     
    I'm waiting until after the first of the year to buy ANH. Once I do buy it'll be a long term holding. It'll be rough for a bit but it'll come back at some point.
    16 Dec 2013, 10:32 PM Reply Like
  • Workinhard
    , contributor
    Comments (183) | Send Message
     
    ANH mgmt is a disaster.
    17 Dec 2013, 12:01 AM Reply Like
  • montlakeal
    , contributor
    Comments (118) | Send Message
     
    The MReit space has been a slow motion train wreck since May. That train won't get you where you want to go.

     

    When I walk down the street and I see someone yakking on their smart phone I think T and VZ which I'm long. If they are also smoking a cigarette I hope it's a Marlboro because I'm long MO.

     

    I just never saw a real product from the MReits. Also, too much uncertainty about the future. That train isn't going to get you to your destination..........u... your last name is Denahan. Caveat emptor.
    17 Dec 2013, 01:36 AM Reply Like
  • june1234
    , contributor
    Comments (2550) | Send Message
     
    Yeap. You don't have to shop at Walmart to notice their parking lots are always full.
    17 Dec 2013, 05:27 AM Reply Like
  • june1234
    , contributor
    Comments (2550) | Send Message
     
    going forward any form of cheap, highly leveraged, under insured debt is a train wreck , domestic or international
    17 Dec 2013, 05:29 AM Reply Like
  • smurf
    , contributor
    Comments (3861) | Send Message
     
    Bought ANH & DX at the same time a while back. Became apparent pretty quickly that ANH was a dud and sold it. Like DX, though, and it's up today (12/16).
    17 Dec 2013, 12:54 PM Reply Like
  • ThomasFogt
    , contributor
    Comments (9) | Send Message
     
    Do you have any opinions on the various preferred issues of ARR or AGNC or NLY? With liquidating preferences in place and cumulative dividends and relatively small percentage of equity for these issuers, seems like the returns are more like bonds than risky stocks?
    17 Dec 2013, 05:54 PM Reply Like
  • ThomasFogt
    , contributor
    Comments (9) | Send Message
     
    Do you have any opinions on the various preferred issues of ARR or AGNC or NLY? With liquidating preferences in place and cumulative dividends and relatively small percentage of equity for these issuers, seems like the returns are more like bonds than risky stocks?
    17 Dec 2013, 05:54 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|