Utilize Dividend Collars With Mortgage REITs [View article]
Ordinary Dividends are taxable events that are taxed at your ordinary income level. We do not know when the ex dividend will be exactly, but when they declare the dividend, the stock will go up and price that dividend in. Even if the stock failed to rally, I would much rather own the stock "cum dividend" then to own the stock and have to pay taxes on the dividend. I'd rather buy an asset at a discount, then to pay up for premium that will be factored out of the stock on ex-dividend day (meaning the stock price will fall by the dividend amount on ex-dividend day anyways, opening up exactly lower by the dividend amount + or - any day change)
Utilize Dividend Collars With Mortgage REITs [View article]
Rolling calls also means diminishing Returns based on time. I am a professional options market strategist. I do not advise owning puts on agnc due to the high costs associated with owning them. I do advise however that anyone thinking of owning agnc should consider selling the 30 dec puts and buying the 29 dec puts for no less then a net credit of 0.30. Selling puts provides more protection, much better profitability from a rising stock price then the authors strategy of a collar and is easier to exit.
Big Dividend-Paying Mortgage REITs, Such As 14.05% CYS Investments, Are Still Good Buys [View article]
The conference call of Q3. Let me quote for you. Also, a few of the analysts I have spoke to have done some calculations on that special dividend. They calculated that it would be between 0.15-0.20 based on the realized gains we have already seen this year.
"Mark Devries - Barclays Okay. And then did you generate any meaningful undistributed income based on the realized gains in the quarter? Did that mainly just offset kind of the non-taxable drop income that you view as core?
Kevin Grant - President, Chief Executive Officer Yeah, that’s really the way to look at it. If you’re trying to decide whether you think there will be a special dividend – is that really what you’re getting to?
Mark Devries - Barclays Yeah, or just whether you’ve got any undistributed income there to kind of pad any kind of near-term margin pressure going forward.
Kevin Grant - President, Chief Executive Officer Well, that’s not really the way we look at it. It’s really what the taxable income is for the year, and that’s going to drive what we have to distribute. We are realizing gains, so there is taxable income for the year. We won’t be able to do that calculation until—or an estimate of it, anyway, until December. It feels to us like there will be a special dividend, but it’s just way too early to quantify it." - http://seekingalpha.co...
Big Dividend-Paying Mortgage REITs, Such As 14.05% CYS Investments, Are Still Good Buys [View article]
I give you props for writing about cys in detail and you do have the least amount of errors. Most people do not follow cys very closely and some that write do not even understand the concept of a mortgage reit. You have a small typo about the 2012 portfolio bonds. 2009 then skips to 2012 then 2011 and 2012. You meant to say 2009, 2010, 2011, 2012 in order. The text is located just under the posted table. Do you have the transcript from the fbr conference and do you ever get responses back from investor relations? I certainly do not.
Big Dividend-Paying Mortgage REITs, Such As 14.05% CYS Investments, Are Still Good Buys [View article]
Ok. Some errors in this article. The main one I want to touch on is that cys covers the dividend by drop income + core income. The combination of the two was 0.48 for q3. The dividend was 0.45. I also want to note cys is about to To declare The q4 dividend of 0.45 + a special dividend of 0.15 to 0.20.
Utilize Dividend Collars With Mortgage REITs [View article]
Firstly you don't automatically sell your stock if the price goes above the strike you sold calls for. Secondly what happens if you get called out of your stock shares and the price keeps going up? The put losses would mount and you'd be unable to position to offset that without taking on additional risk. Your strategy is flawed and I'd advise anyone looking to reduce their risk to either reduce the size of their positions, or sell covered calls, or sell out of the money puts (or put spread) instead of owning the stock.
How To Analyze The Value In Hybrid Mortgage REITs - Part 2 [View article]
CIM is the worst mreit you can invest in. It has been constantly losing value and slashing its dividend. Stay far away! Mtge is the buy of this group. Gary is great at picking the best non agencies. Most of the non agency paper is crap and the non agency market is very very small compared to the agency market.
Leveraging a bond yielding 1.5%-2% by 8X is not a great business, writes David Schawel, remaining bearish on pure-agency mREITs. Dividends - and share prices along with them - will be cut more than expected next year. How about non-agency? Maybe too popular, he says. "Every hedge fund is suddenly an expert." (other ideas instead: I, II) [View news story]
American Capital Agency: 12.7% Yield, Lower Prepayment Risk [View article]
Agnc pays excise tax. They never overpay the dividend as it erodes book value. Sorry to say but the dividend will be reduced to a yield of about 10 percent at book. It will be reduced this coming payout. I hope you and other investors are ok about this considering I am going to sell the vertical spread puts tomorrow. 80 dec 30 strike puts sold, 80 dec 29 strike puts bought. I am hoping the price of agnc stays above 30 $ on expiration.
American Capital Agency: 12.7% Yield, Lower Prepayment Risk [View article]
The nim does not support the dividend. It will be cut to $1 per quarter or less. If they only pay nim then the dividend will be reduced to 0.75 per quarter. The stock should trade at a discount to book due to MBS prices dropping as of late. See "Mbb" stock for more on mbs prices.
If Chasing Yield Is All You Are After, Mortgage REITs May Not Be Your Best Bet [View article]
The dividend on CYS is stable and may even improve at current spreads. Of course.. it's already been cut from 0.60 to 0.45. They gave themselves room, drop + core = 0.48 for Q3.
A double-take is necessary to believe some of the handles in the mREIT sector, undergoing another savage selloff as the Fed hints at even more QE. The pure-agency REITs - in direct competition with the Fed for paper - are hit hardest. AGNC -3.4%, ARR -8.1%, CMO -4.9%, WMC -7.1%, to name a few. [View news story]
Takeaways from Gary’s presentation: (AGNC's today)
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
They're calling it the "DeMarco Trade," and it's nailing mortgage REITs (at least those who focus on Agency paper) already stung by vanishing interest spreads. Agency MBS paper has been falling in price since the election, as Ed DeMarco's days as FHFA chief seem numbered, paving the way for principal forgiveness, "the mother of all pre-payment waves." [View news story]
Takeaways from Gary’s presentation: (AGNC's TODAY)
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
Utilize Dividend Collars With Mortgage REITs [View article]
Utilize Dividend Collars With Mortgage REITs [View article]
Big Dividend-Paying Mortgage REITs, Such As 14.05% CYS Investments, Are Still Good Buys [View article]
"Mark Devries - Barclays
Okay. And then did you generate any meaningful undistributed income based on the realized gains in the quarter? Did that mainly just offset kind of the non-taxable drop income that you view as core?
Kevin Grant - President, Chief Executive Officer
Yeah, that’s really the way to look at it. If you’re trying to decide whether you think there will be a special dividend – is that really what you’re getting to?
Mark Devries - Barclays
Yeah, or just whether you’ve got any undistributed income there to kind of pad any kind of near-term margin pressure going forward.
Kevin Grant - President, Chief Executive Officer
Well, that’s not really the way we look at it. It’s really what the taxable income is for the year, and that’s going to drive what we have to distribute. We are realizing gains, so there is taxable income for the year. We won’t be able to do that calculation until—or an estimate of it, anyway, until December. It feels to us like there will be a special dividend, but it’s just way too early to quantify it."
- http://seekingalpha.co...
Big Dividend-Paying Mortgage REITs, Such As 14.05% CYS Investments, Are Still Good Buys [View article]
Big Dividend-Paying Mortgage REITs, Such As 14.05% CYS Investments, Are Still Good Buys [View article]
Utilize Dividend Collars With Mortgage REITs [View article]
How To Analyze The Value In Hybrid Mortgage REITs - Part 2 [View article]
Leveraging a bond yielding 1.5%-2% by 8X is not a great business, writes David Schawel, remaining bearish on pure-agency mREITs. Dividends - and share prices along with them - will be cut more than expected next year. How about non-agency? Maybe too popular, he says. "Every hedge fund is suddenly an expert." (other ideas instead: I, II) [View news story]
2 High-Yielding Stocks That Pay Dividends Every Month [View article]
American Capital Agency: 12.7% Yield, Lower Prepayment Risk [View article]
American Capital Agency: 12.7% Yield, Lower Prepayment Risk [View article]
If Chasing Yield Is All You Are After, Mortgage REITs May Not Be Your Best Bet [View article]
CYS Investments Offers A 20% Discount To Net Asset Value And A 15.4% Yield [View article]
A double-take is necessary to believe some of the handles in the mREIT sector, undergoing another savage selloff as the Fed hints at even more QE. The pure-agency REITs - in direct competition with the Fed for paper - are hit hardest. AGNC -3.4%, ARR -8.1%, CMO -4.9%, WMC -7.1%, to name a few. [View news story]
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.
They're calling it the "DeMarco Trade," and it's nailing mortgage REITs (at least those who focus on Agency paper) already stung by vanishing interest spreads. Agency MBS paper has been falling in price since the election, as Ed DeMarco's days as FHFA chief seem numbered, paving the way for principal forgiveness, "the mother of all pre-payment waves." [View news story]
QE3 turning out as we described in Q1, but a very manageable environment if you have the right positions. You can design a portfolio that will continue to perform well despite the challenges of QE3.
Menendez-Boxer Bill – as written, only 3% of our portfolio is exposed in any way, shape or form to that Bill – little effect if enacted. Only affects loans originated before June 2009 ---we have little, if any exposure there.
On Ed Demarco – has done a great job (in coordination with Obama’s HUD and Treasury departments). FHA, on its own without Demarco, came up with the same June 2009 date Ed Demarco recommended. Idiosyncratic policy risk is at an all time low.
No change in MREIT space regarding dividends
We try to be as agnostic around interest rates as we can be – we use our expertise to position to a range of possible scenarios.
Repo market –we’ve seen no changes seen on the repo side. Our repo agreements have no ties to market cap or stock price – realistically, no changes in terms, nor have we any concerns.
Stock buybacks – we use real-time looks at book value to buyback stock. It’s a way to build book value.