Fri, May 8, 11:00 AM
- Nearly the entire mREIT sector trades at a discount to book value, with Invesco Mortgage (IVR +1.3%) one of the more highly discounted of the group, says KBW (more than 21% just ahead of Wednesday's earnings release).
- Invesco, however, had what might have been the highest trailing four-quarter economic return in the entire sector, says the team, upgrading to Outperform with $18 price target from Market Perform. The economic return just in Q1 was 5.3%.
- KBW doesn't expect Invesco to continue to be at the top of the space in book value stability or economic return, but it should be at least average, and average augers for a narrowing of that valuation discount and shareholder return near the top of the sector.
- Previously: Two Harbors downgraded on valuation (May 8)
- Previously: Big quarter for Invesco Mortgage as portfolio changes pay off (May 6)
Wed, May 6, 5:11 PM
- Q1 core earnings of $61.9M or $0.50 per share vs. $59.7M and $0.49 in Q4. Dividend is $0.45.
- Book value per share of $19.37 up from $18.82 at the start of the year. Today's close of $15.18 is a 21.6% discount to book, though one suspects that could narrow.
- Economic return for the quarter - change in book value plus the dividend - of 5.3%.
- Effective interest rate margin of 1.21% down 14 basis points from Q4.
- Conference call tomorrow at 9 ET
- Previously: Invesco Mortgage Capital beats by $0.02, beats on revenue (May 6)
- IVR flat after hours
Wed, May 6, 4:24 PM| Comment!
Tue, May 5, 10:31 AM
- A big move higher in interest rates continues, with the 10-year Treasury yield up another six basis points to 2.20% - roughly the level at which it started the year (it fell as low as 1.65% in early February).
- The move here is small-time compared to what's going on across the pond, as the absurd levels of two weeks ago become somewhat less absurd. Ten-year Bund yields are up to 0.51% from 0.05%. Italian 10-years are up 30 bps today to 1.78%, with a similar move in Spain.
- The IYR is down 1.1%.
- Individual names: Realty Income (O -1.3%), Senior Housing Properties (SNH -1.5%), Medical Properties Trust (MPW -2.4%), Gramercy Property Trust (GPT -1.8%), Equity Residential (EQR -1.4%), AvalonBay (AVB -1.5%), Government Properties (GOV -2.3%), Pebblebrook Hotel (PEB -2%), Eastgroup Properties (EGP -1.6%), American Campus (ACC -1.4%).
- Mortgage REITS (REM -0.6%) are outperforming the equity names: Annaly (NLY -0.7%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -0.7%), CYS Investments (CYS -0.3%), Invesco (IVR -0.2%).
Wed, Mar. 18, 2:30 PM
- Worries about a sharply flatter yield curve abate just a bit as the FOMC drops "patient" from its policy statement - putting rate hikes on the table at subsequent meetings - but Fed economic projections send a dovish signal, with outlooks for economic growth, inflation, and the pace of rate hikes all cut from previous estimates.
- Outperforming the averages: Annaly Capital (NLY +1.1%), American Capital Agency (AGNC +1.5%), Two Harbors (TWO +1.5%), CYS Investments (CYS +2%), Invesco (IVR +1.7%), Hatteras (HTS +1.7%), Capstead (CMO +2.1%), MFA Financial (MFA +1.7%), Anworth (ANH +2.2%), Dynex (DX +1.5%), Five Oaks (OAKS +3.3%).
- ETFs: REM, MORT, MORL
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
Tue, Mar. 17, 4:11 PM
Fri, Mar. 6, 10:21 AM
- The 10-year Treasury yield has popped all the way to 2.24% (up 11 bps on the session) following the strong jobs report which saw 295K jobs added in February and the unemployment rate dropping to 5.5%.
- Checking short-term interest rate futures, they're falling (meaning higher rates), but still not pricing in a rate hike until late summer.
- Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -0.6%), Two Harbors (TWO -1%), Armour (ARR -0.9%), Invesco (IVR -0.9%), CYS Investments (CYS -1.4%), Hatteras (HTS -1.1%), MFA Financial (MFA -1.1%), Western Asset (WMC -0.7%), Dynex (DX -1.2%), AG Mortgage (MITT -1.5%), Ellington Residential (EARN -1.1%).
- ETFs: REM, MORT, MORL
- Previously: Dollar and Treasury yields spike after strong jobs print (March 6)
Mon, Feb. 23, 4:30 PM
- Q4 core earnings of $59.7M or $0.49 per share vs. $54.3M and $0.44 in Q3. Dividend is $0.45.
- Book value per share of $18.82 vs. $19.16 at the end of Q3. Today's close of $15.42 is an 18% discount to book.
- Economic return - dividend plus the increase in book value - of 15.6% for the year as company cut rate exposure and boosted credit exposure.
- Effective interest rate margin of 1.35% up 18 bps from Q3.
- Earnings call at 5 ET
- Previously: Invesco Mortgage Capital beats by $0.03, beats on revenue (Feb. 23)
- IVR flat after hours.
Mon, Feb. 23, 4:10 PM| Comment!
Sun, Feb. 22, 5:35 PM
Wed, Jan. 14, 1:17 PM
- Agency MBS are off to their worst start relative to Treasurys since 1997 as the big drop in interest rates has investors nervous about a surge in refinancing. Returns on paper backed by Fannie, Freddie, or Ginnie Mae are 60 basis points less than those on Treasurys of similar duration so far this month.
- Also stoking the trend are changes to government programs aimed at making mortgage credit easier to obtain.
- Earlier today, the MBA reported applications for home-loan refis jumped 66% last week.
- Prices of agency MBS currently average 106.5 cents on the dollar, meaning owners would lose 6.5% if immediately repaid.
- Annaly Capital (NLY -1.3%), American Capital Agency (AGNC -1.2%), Armour Residential (ARR -2%), Two Harbors (TWO -0.9%), Invesco Mortgage (IVR -1.9%), American Capital Mortgage (MTGE -1.3%), Dynex (DX -0.5%), Apollo Residential (AMTG -1.2%), Anworth (ANH -0.9%), Western Asset (WMC -1.6%).
- ETFs: REM, MORT, MORL
Dec. 30, 2014, 12:37 PM
- Nearly all the mREITs sell at discounts to their most recently disclosed book value, with sector giants Annaly Mortgage (NYSE:NLY) and American Capital Agency (NASDAQ:AGNC) trading at double-digit discounts.
- Often a sizable haircut to book may make sense, as in the case of Armour Residential (NYSE:ARR) and Javelin Mortgage (NYSE:JMI), both of which just cut their dividend (they have the same external manager).
- Of the 24 companies examined, New York Mortgage Trust (NASDAQ:NYMT) and Capstead Mortgage (NYSE:CMO) stand alone in trading at premiums to book value.
- The full list
Dec. 16, 2014, 4:20 PM
Dec. 9, 2014, 12:57 PM
- Unable to catch a bid for a few sessions, mortgage REITs (REM +1%) have turned higher in afternoon action, led by Annaly (NLY +0.7%) and American Capital Agency (AGNC +1.5%).
- Helping are jitters in the stock market (though U.S. averages are well off the lows), and a 10-year Treasury yield that's retreated all the way to 2.21% after hitting the mid-2.30s on the back of Friday's strong jobs number.
- Armour (ARR +1.1%), Two Harbors (TWO +0.9%), CYS Investments (CYS +1.4%), Invesco (IVR +1.8%), American Capital Mortgage (MTGE +1%), Hatteras Financial (HTS +2%), Capstead (CMO +2%).
- Other ETFs: MORT, MORL
- Also showing some green are the recently beaten-up BDCs, including Prospect Capital (PSEC +0.2%), Fifth Street Finance (FSC +0.2%), Ares Capital (ARCC +0.5%), FS Investment (FSIC), Triangle Capital (TCAP +1.7%).
- ETFs: BDCL, BDCS, BIZD
- Previously: Money flows back into fixed income (Dec. 9, 2014)
Nov. 19, 2014, 3:42 PM
- A check of the mortgage REITs following FOMC minutes which shows the discussion moving a bit more seriously towards rate hikes finds the sector (REM -0.5%) modestly lower.
- Individual names: Annaly (NLY -0.3%), American Capital Agency (AGNC), CYS Investments (CYS -0.3%), Invesco Mortgage (IVR -0.9%), New York Mortgage Trust (NYMT -0.4%), Hatteras Financial (HTS -0.8%), MFA Financial (MFA -1%), Capsteam Mortgage (CMO -0.6%), Ellington Residential (EARN -0.4%).
Nov. 4, 2014, 4:28 PM
- Q3 core earnings of $54.3M or $0.44 per share vs. $63.1M and $0.50 in Q2 thanks to faster prepayment speeds which the company says have declined in Q4. Dividend of $0.50.
- Book value per share of $19.16 slips 3.2% from the end of Q2. Today's close of $16.51 is a 13.8% discount to book.
- Effective interest rate margin of 1.17% down three basis points from Q2.
- Conference call tomorrow at 9 ET
- Previously: Invesco Mortgage Capital misses by $0.07
- IVR flat after-hours
IVR vs. ETF Alternatives
Other News & PR