Patrick

Thornburg: Looking for Value Among Mortgage REIT Preferred Stock

I can't speak for the author, but the purpose of my comment was give some names of preferred stock issuances within the mortgage REIT world that offer attractive yields. I would never suggest that anyone purchase any security without doing his own due diligence first.

I would argue that with preferred issuances, the fair value of the stocks is less important than the underlying company's ability to pay the dividend.

Thornburg: Looking for Value Among Mortgage REIT Preferred Stock

David, another good name for a REIT preferred issue is RAIT Financial Trust. RAIT also got crunched by its exposure to other mortgage REITs and homebuilders, but the company has come through and is still paying a solid dividend on the common stock. All three series of RAIT's preferred stock (A, B, and C) are yielding over 14% right now. Other good options include offerings from Newcastle Investment, iStar Financial, and Anthracite Capital, all which have preferreds yielding over 10% right now. For a very speculative but potentially lucrative play, the preferred stock of NovaStar Financial is yielding over 20%.