Anworth boosts dividend by 75%


The Q1 quarterly payout will be $0.14 per share vs. $0.08 previously for an annualized yield of 10.7%. The company this quarter discontinued hedge accounting for its interest rate swaps after determining they were "no longer necessary or effective components of the company's asset/liability management strategy."

In particular, the assets the swaps were intended to hedge now have substantially lower principal balances and thus less sensitivity to unexpected rises in short-term rates. The swaps themselves remain in effect.

The company expects the $0.14 payout is inline with its earnings power this quarter and into the future, and notes the fair value of these legacy swaps is already reflected in book value - thus there should be no book value hit from the higher dividend.

As tipped last week, Anworth (ANH) has formed Anworth Property Services to invest in other areas of real estate.

Board member Charles Black has decided to step down and will be replaced by Mark Maron, a parter at Acre Corp., a private equity commercial real estate firm.

No trades yet premarket, but the stock closed last night at $5.21, continuing to trade at a substantial discount to Dec. 31 book value of $5.98.

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