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My 2 Largest High Dividend Yields


  • NRZ-D offers investors a very reasonable yield today with a solid floating spread after the rate resets in late 2026.
  • We see NRZ-D being a more appealing share than the other preferred shares from NRZ, but the difference is pretty small.
  • CIM-A is our other largest position. We expect shares to get called in the near future, but it can still be a useful place to park some cash.
  • If shares of CIM-A are not called promptly, the quick dividend accrual at an 8% rate would be a nice benefit for investors.
  • We don’t plan to cover CMO after the merger. We find it interesting that TWO has a higher projected price-to-book than NRZ or PMT.
  • This idea was discussed in more depth with members of my private investing community, The REIT Forum. Learn More »

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Colorado Wealth Management is a REIT specialist who began his decades-long investment career in a family-owned realtor office before launching his own company and embracing his drive for deep-dive REIT analysis. He passed all 3 CFA exams. He focuses on Equity REITs, Mortgage REITs, and preferred shares.

Features of the group include: Exclusive REIT focus analysis, proprietary charts and data models, real-time trade alerts posted multiple times a month, multiple subscriber-only portfolios, and access to the service's team of analysts and support staff for dialogue and questions on the REIT space.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AGNCO, CIM-A, ARR-C, CMO-E, DX-C, NRZ-D, NRZ, SLRC, DX, PMT 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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Comments (21)

Always informative and interesting, thanks. Own NRZ already, will look at the preferred as I continue to learn my way around preferreds.

As usual your posts and charts spark a question and perhaps CWM or SA experts can offer an answer. Looking at some of the few under par baby bonds, I see AAIC-B and MITT-C both of which have decent yield and won't be called for a few years. So why are they below par?

Is it because they are fixed and thus if interest rates rise as predicted, they will lose value. despite their high yield?

Or is it because the fundamentals of the issuer are questionable?

Thanks for any explanations.
Well done on your performance. Hopefully that gets replicated for the next year too!
Excellent article. Your chart shows you have skin in the game. Your articles are always informative. Picked up NRZ-D under par after it opened trading.
@Colorado Wealth Management Fund : Have you sold your NRZ common shares. I believe the metrics remain in tact with regard to book value, select issuance of pfd. debt, and of course the strong management of Nirenberg and company
Colorado Wealth Management Fund profile picture
@Michael123a We reduced our position some as it had been extra-large. We're still overweight on the shares at 5.22% allocation.
crrj profile picture
how far will they drop if 10 year goes above 2 %?
Colorado Wealth Management Fund profile picture
@crrj I think it really depends on how rapidly it happened. If it gains 40 basis points in a week, then they dip on the volatility. If it happened over the course of 6 months, it would probably have an impact of around $.00. Just wouldn't matter if it happens slowly.
Expected CMO-E to be called. Every day it isn't called is a bonus at that rate.
Sold CIM-A recently fully expecting the call. But then the others just fells so much it's no longer a given.
Buoght a pile of NRZ-A and already sold half of it. I'll be busy trading between the 4 NRZ-'s on price movement.
Thanks for the in depth analysis, helps to make choices. Preferreds seem to be in favor now, given the shifts in the market environment and risk factors.
Awesome information. There's an abundance of good cognition.
Colorado Michael,
Thanks for your updated analysis.
You stated investors seem to like the upcoming CMO merger, and that CMO was trading just under our sell range. Believe CMO shareholders receive $0.99 cash per share and stock in surviving entity. What is your opinion, sell CMO pre-merger or “Let It Ride”?Thanks for the cool front and resulting rains last night in Baja Oklahoma.
Dividend Digging Armadillo
Colorado Wealth Management Fund profile picture
@Dividend Digging Armadillo I'm not rendering an opinion on the performance of the new REIT that will replace CMO. We don't intend to cover it, so we won't be able to say when it's a buy or a sell.
Income4ever aka Cyclenut profile picture
Looking hard at Mopay EFC, it has significant institutional support considerably more than most mreits. Yield is north of +9% as well monthly
Mr George Stobbart profile picture
The only purpose of investing is to make money. And not to generate regular income.

You can manufacture fake dividends yourself using capital gains.

Dividend and income investing is just a waste of money and time
Income4ever aka Cyclenut profile picture
@Mr George Stobbart
Whatever floats your boat George
Me personally I'd rather book dividend income and retain all my shares for consistent income production
doctorslernon profile picture
@Mr George Stobbart
Try to troll harder next time.
@Mr George Stobbart With real interest rates on almost all bonds in the developed world negative - dividends and income investing is a life saver. In a diversified portfolio they have a place. That place is larger if you are in or near retirement. I love spending those "fake" dividends!
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