Agency mREIT Preferreds Update

Aug. 19, 2021 4:15 AM ET, , , , , , , , , , , , 6 Comments

Summary

  • Agency-focused companies gave up book value in Q2 due to wider agency spreads, more expensive TBA financing and stubborn prepayment speeds.
  • We take a look at the key credit figures for preferreds holders and highlight our stress coverage metric which sums up portfolio risk into a single number.
  • Within the suite we like AGNCP given its attractive combination of stress coverage and yield and discuss ARR.PC and DX.PC.
  • Looking for a helping hand in the market? Members of Systematic Income get exclusive ideas and guidance to navigate any climate. Learn More »

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This article was first released to Systematic Income subscribers and free trials on 12-August.

Mortgage REIT preferreds have held up very well over the last year and a half, recovering nicely, in contrast, to common shares of many

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This article was written by

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ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

ADS Analytics runs the investing group Systematic Income which features 3 different portfolios for a range of yield targets as well interactive tools for investors, daily updates and a vibrant community.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of DX.PC, ARR.PC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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