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Western Asset Mortgage Capital: Dividend Coming From Best-In-Class mREIT
- Dividend over last 4 quarters yielded 29%, expect the dividend this quarter plus catch-up over $1.00.
- Portfolio is funded for interest rates to rise in 2015. 27% of fund positioned to cushion the affect of the rate increase.
- The company is leverage at 7.9 to 1, which is safely within norms to protect the portfolio.
19% Dividend Western Asset Mortgage Capital Is In Line For A Big Increase In Book Value In Q4
- WMC pays an approximate 19% dividend. Few companies can match that.
- With the -43 bps drop in the 10 year US Treasury Note yield quarter to date (December 17, 2014), WMC is trading at a discount of $1+ to book value.
- The ECB's proposed €1 trillion QE program should ensure that bond yields remain low for some time. This should safeguard WMC's book value.
- Meanwhile WMC has been expanding into other less interest sensitive areas such as CMBS. These changes should position WMC well for the future.
18.8% Dividend Western Asset Mortgage Capital Knocked It Out Of The Park In Q3
- WMC raised its dividend from $0.67 to $0.70 for Q3 2014 (18.8% annually).
- WMC outperformed on book value loss in Q3 2014 compared to its peers. It lost just -0.32% of its book value (from $15.31 to $15.26).
- WMC made a number of management moves in Q3 2014, which to this observer show good management sense.
- WMC on October 30, 2014 added two new members to its board in order to improve its overall governance and management.
Raise Of Dividend To 18.5% Makes Western Asset Mortgage Look Attractive
- WMC raised its dividend from $0.67 to $0.70 per share for Q3 2014. This brings the annual dividend rate to about 18.5%.
- Core earnings plus drop income at $1.00 for Q2 2014 would easily cover this. Even the core earnings alone of $0.75 per share would have.
- WMC is heavily hedged. It should be able to withstand a move upward in interest rates with little damage.
Update: Western Asset Mortgage Raises Its Dividend - It Is The mREIT Dividend King
- Western Asset Mortgage has just announced that it will be paying a quarterly cash dividend of $0.70 per share for the third quarter.
- When I last opined I argued the dividend would be safe; this hike is a welcomed surprise.
- My bull thesis is substantially strengthened; WMC is a dividend king.
Yield Is Over 18%, Western Asset Mortgage Capital Increased The Dividend
- Third Quarter dividend increased from $0.67 to $0.70.
- 2nd Quarter’s financials state earnings of $1.00 per share, 3rd quarter to be release October/November. Opportunity for supplemental dividend payout.
- Take the dividend of 18% in cash, or reinvest the dividends.
- Investors have until October 1, 2014 to buy the stock prior to the ex-dividend date.
20% Yielding Western Asset Mortgage Shifts Holdings To Support The Yield And Book Value
- While it seems hard to believe, WMC actually generates enough net investment income to support the current 20% yield.
- The company's problem has been to also maintain book value, which has eroded as fast as the dividends paid out.
- WMC has shifted from agency only to a more hybrid MBS portfolio, which has increased net interest income, and hopefully stabilized the book value.
Update: Western Asset Mortgage President And CEO Purchases Stock - Bull Thesis StrengthenedChristopher F. Davis • Tue, Sep. 16
- WMC president and chief executive officer of the company Gavin James purchased 6,570 shares of WMC common stock on the open market at a share price of $15.20.
- When I last opined on WMC, I highlighted the insider buying at the company as a sign the dividend will be safe if not raised.
- My bullish thesis is strengthened; people sell stock for all sorts of reasons but they buy for only one.
Insider Buying And Effect On Dividend Due At Western Asset Mortgage Capital Corp.
- Key leader buying more shares; second buy this quarter.
- Announcement and ex-dividend date expected within the week.
- Stock prices expected to climb between now and ex-dividend date.
Time To Move Prior To Western Asset Mortgage Capital's Dividend Announcement
- Dividend Announcement will push stock price higher until ex-dividend date.
- Strong quarterly dividend expected again for Q3 2014 - $0.67.
- Expect a bonus dividend for the catch up in Q4 2014.
- Insider buying spurs speculation of more dividends to come.
mREITs Have Bottomed: Why Investors Should Consider This Dividend King
- Mortgage Real Estate Investment Trusts have put a solid bottom in.
- Interest rates have declined steadily with low volatility in 2014 creating a favorable environment.
- Annaly Capital, American Capital Agency, Javelin Mortgage and American Capital Mortgage's Dividends are safe.
- Western Asset Mortgage remains the dividend king in my mREIT holding allocation yielding 18%.
- Western Asset generated core earnings plus drop income of $1.00 per share ($0.75 of core earnings) easily covering the $0.67 dividend; mREIT investors should strongly consider purchasing Western Asset shares.
Western Asset Mortgage Capital Nails The Quarter - Cautious On 18%
- Western Asset Mortgage nailed the quarter, turning in impressive results.
- At 18%, WMC is one of the - if not the - highest-yield mREITs in the sector.
- I am holding at current position levels until I have more faith in the quality of dividends.
Western Asset Mortgage Capital Turned In A Huge Total Economic Return For Q2. Any Problems?
- WMC reported a 12.6% total economic return for Q2 2014 (more than 50% annualized).
- WMC reported a book value gain of $1.12 per common share and it declared a dividend of $0.67 per common share.
- WMC even saw its average net interest spread go up to 2.69% from 1.8% in Q1 2014. Outstanding.
- Were there any problems hidden in this report? Read the article to get more details about what WMC did in Q2 2014.
Double Digit Return In 30 Days With Western Asset Mortgage Capital
- Western Asset to release 2Q results and announce dividend on August 7.
- Analyst expect dividend to remain the same $0.67 this quarter.
- Buy the low now, and sell just prior to the ex-date for best return.
Western Asset Pays Another 18% Dividend For Q2 2014
- Dividend of $0.67 with ex-dividend date of June 26, 2014.
- Earnings report due in August, first quarter beat estimates by $0.36.
- Company estimates Book Value at $15.44, up $1.25 from first quarter.
- 4 key leaders have purchased stock in June 2014.
13.9% Div. CYS Investments And 18.4% Div. Western Asset Mortgage Capital Are Winning Their Bets
- Both CYS and WMC employed strategies in Q2 2014 that would perform well if interest rates went down.
- 10 year US Treasury Note yields as of June 19, 2014 were down -11 bps since March 31, 2014.
- CYS pays a 13.9% dividend, and WMC pays an 18.4% dividend. How reliable are these?
- What risks are CYS and WMC taking to outperform most other primarily Agency mortgage REITs?
More Insider Trading Purchases By Western Asset Mortgage Capital Corp.
- Investors get boost of confidence by CIO purchase.
- WMC participated in the KBW Mortgage Finance Conference on June 3.
- 2 methods of gaining an 18% return.
Western Asset Stock Price Is At The Buy Point For This Quarter
- WMC moved toward a hybrid REIT model that was less profitable, but much safer in the market place.
- Another $2.35 dividend is less likely, but continued dividends near .60-.70 is anticipated.
- Buy WMC now at the low point in the market.
- 2 Investing options to profit in WMC.
Thu, Dec. 18, 4:13 PM| 3 Comments
Fri, Dec. 5, 10:12 AM
- This morning's big jobs number has pushed yields higher at both the short and long end of the curve, and has mortgage REIT investors mulling losses on MBS holdings.
- The mREIT ETF (REM -0.6%) Others: MORT, MORL
- Annaly (NLY -1.2%), American Capital Agency (AGNC -1%), Armour Residential (ARR -0.6%), Chimera (CIM -0.6%), MFA Financial (MFA -0.9%), Western Asset (WMC -1.3%).
- Previously: Short end of yield curve on the move after jobs number (Dec. 5, 2014)
- Previously: Bonds and dollar higher, gold slumps after strong jobs report (Dec. 5, 2014)
Wed, Nov. 5, 4:52 PM
- Q3 core earnings plus drop income of $27.8M or $0.67 per share vs. $30M and $0.75 in Q2. Dividend is $0.70.
- Book value per share of $15.26 vs. $15.31 at end of Q2. Today's close of $14.97 is a 1.9% discount to book.
- Net interest spread of 1.95% down a whopping 74 basis points from Q2. CPR on agency portfolio of 6.5% up 160 basis points.
- Total portfolio size of $4.4B vs. $4.71B. 27% of portfolio is in credit investments.
- Net interest spread declined as company was positioned for Treasury yields to stay in range. The big drop in the 10-year towards the end of the quarter forced an adjustment in hedges which increased WMC's effective cost of funds.
- Western Asset has completed steps necessary to invest in residential whole loans and completed first deal in this asset class in October.
- Conference call tomorrow at 8 ET
- Governance changes: Board has created the position of Lead Independent Director and appointed current audit committee chair M. Christian Mitchell to fill it. The board has also added a new independent member.
- Previously: Western Asset Mortgage Capital misses by $0.04, misses on revenue
Wed, Nov. 5, 4:35 PM| Comment!
Mon, Oct. 13, 4:19 PM
- Both equity and mortgage REITs saw plenty of buying as nearly all of the rest of the market was lit up bright red, and Treasury ETFs signaled a sharp drop in yields when government bonds reopen for trade tomorrow (closed this session for Columbus Day).
- A sampling of equity names: Senior Housing Properties (SNH +1.2%), Medical Properties Trust (MPW +1.4%), Gramercy Property Trust (GPT +1.7%), Equity Residential (EQR +0.7%), Inland Real Estate (IRC +0.9%), Sovran Self Storage (SSS +1.1%), Highwoods Properties Trust (HIW +1%).
- One equity REIT sector in the red along with the rest of the market is lodging amid worsening Ebola fears: Ashford Hospitality Trust (AHT -2.9%), Sunshine Hotel Investors (SHO -1.4%), LaSalle Hotel Properties (LHO -1.5%), Summit Hotel Properties (INN -1.5%).
- Mortgage REITs: American Capital Agency (AGNC +1.4%), CYS Investments (CYS +2.2%), Invesco (IVR +1.1%), American Capital Mortgage (MTGE +1.5%), Western Asset (WMC +1.1%).
- ETFs: IYR, VNQ, REM, MORL, MORT, DRN, URE, REZ, SRS, RWR, SCHH, ICF, ROOF, DRV, KBWY, RTL, REK, FRI, FTY, PSR, IFNA, FNIO, WREI
Tue, Sep. 23, 4:27 PM
- Alongside its $0.70 per share dividend announcement, Western Asset Mortgage (NYSE:WMC) estimates August 31 book value at $15.29 per share, down $0.02 from June 30 book value.
- Today's closing price of $15.02 is a 1.8% discount to book. SIx weeks ago, the shares were selling for about a 10% discount.
- Shares +0.5% AH to $15.09.
Tue, Sep. 23, 4:21 PM| 1 Comment
Thu, Sep. 18, 1:10 PM
- The entire sector is in the red, but the biggest declines are being seen in the industry giants, about the only spots large investors can move a lot of shares quickly: Annaly Capital (NLY -1.6%), American Capital Agency (AGNC -1.6%).
- Yesterday's FOMC statement may have left in the "considerable period" language, but the committee remains on course to begin a rate hike cycle in less than a year.
- Further, the selloff on the long end of the curve can has reached the sizable stage - the 10-year yield is up 32 basis points in a month, and has now erased about all of the summer's decline. Book values could take a hit (though hedging is likely to ease the pain).
- REM -0.7%
- Other ETFs: MORT, MORL.
- Other names: Armour (ARR -1.3%), Invesco (IVR -0.7%), Hatteras (HTS -3%), Capstead (CMO -0.3%), Western Asset (WMC -0.4%)
Fri, Aug. 15, 12:28 PM
Thu, Aug. 7, 9:01 AM
- Q2 core earnings of $30M or $0.75 per share vs. $0.46 in Q1. Dividend of $0.67.
- Book value per share of $15.31 vs. $14.19 at end of Q1. Last night's close of $13.83 is a 9.7% discount to book.
- 2.69% weighted average net interest spread up from 1.8% in Q1. CPR on agency MBS portfolio of 4.9% up from 3.8%.
- Total portfolio of $4.71B. $3.17B is agency MBS. CMBS holdings up to $436.6M.
- Conference call at 12 ET
- Previously: Western Asset Mortgage Capital beats by $0.19, beats on revenue
- WMC +3.1% premarket
Thu, Aug. 7, 8:33 AM| Comment!
Fri, Jun. 20, 10:25 AM| 5 Comments
Thu, Jun. 19, 4:26 PM| 1 Comment
Fri, Jun. 6, 12:12 PM
Wed, May. 28, 2:43 PM
- The swoosh down in interest rates - the 10-year Treasury yield is now off 8 bps on the session to just 2.44% - isn't really boosting the mREIT sector (REM -0.1%), and one wonders which managements hunkered down for higher rates and now find themselves overhedged. There's also a flattening yield curve and it wasn't too long ago when the bear case on mortgage REITs was slimming net interest margin, not higher rates.
- Kudos to CYS Investment (CYS +0.5%) management, which - not finding a ton of value in mortgages - loaded up on Treasurys in Q1. The stock is one of the sector's stronger performers YTD, up 24.5%.
- Others today: Annaly (NLY +0.1%), American Capital (AGNC -0.7%), Armour Residential (ARR +0.7%), Hatteras Financial (HTS -0.3%), Capstead Mortgage (CMO -0.2%), Western Asset Mortgage (WMC -0.6%)
- ETFs: MORT, MORL
Thu, May. 8, 9:16 AM
WMC vs. ETF Alternatives
Western Asset Mortgage Capital Corp is a residential real estate finance company that invests in residential mortgage assets in the United States. The Company is primarily focused on investing in, financing and managing Agency RMBS.
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