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Dynex Capital: Growth Investors Can Find It Attractive

Dec. 03, 2021 4:31 PM ETDynex Capital, Inc. (DX)12 Comments
Daniel P. Varga profile picture
Daniel P. Varga


  • Dynex Capital is slowly shifting to only agency mortgage-backed securities making the business model more stable and secure.
  • With the rise of house prices and the economic recovery, DX had a good 2021 which is likely to continue in 2022.
  • DX is a dividend nightmare with numerous cuts and no increases in the previous years.

Investing and financing of real estate. REIT

JARAMA/iStock via Getty Images

Investment thesis

Dynex Capital, Inc. (NYSE:DX) operates in the cyclical REIT business but the cycle is turning in their favor after the pandemic. Housing prices are on the rise and the U.S economy is

This article was written by

Daniel P. Varga profile picture
Started investing more than 10 years ago. Mainly focusing on Large-Caps and occasional story stock. In addition, I am a regular buyer and analyzer of REITs, mREITS, and asset managers. I also have a dividend-focused portfolio with an investment horizon of 15 to 25 years. Follow me for comparison articles such as AAL vs. LUV or USB vs. C.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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 (12)

Looking for an entry point!
Skip Town profile picture
Everyone has cut their dividends. Cutting theirs was a zero big deal. Still as high as you'll find. Must-own for income seekers.
@Skip Town Difference on dividend cutting is that, as author pointed out, company has a long history of it, i.e. long before COVID effect. Looking at chart, looks like an investors loses more in capital than earn in dividend . . .unless wait for next big correction and buy then e.g. when COVID correction hit this stock and most others.
gimmeecoffee profile picture
Damn, taking a pounding today, added a few extra hundred shares.
The author clearly does not know how to analyze mREITS since he wouldn’t bother with looking at EPS and P/E ratios. MREITS are about spread and leverage and book value and where we are in the interest rate cycle.
is a good stock for using covered calls.
thebellsareringing profile picture
I consider DX a conservatively run mREIT. Nothing wrong with being prudent. I believe right now they use little leverage. I don't believe rates will be rising in the near term. I don't anticipate a dividend reduction now. $ARR is probably a better choice for this report.
@thebellsareringing last I checked their leverage was over 6. Not extremely high, but not exactly little. For less leverage, look at NYMT.
@thebellsareringing My understanding is rates will may go up three times in 2022.
I've held this bow-wow for years and years. Only the dividend has prevented the ship from sinking.

As for DX's growth: If asked, Clara Peller reply "Where's the beef?".

If DX can sustain its current >9% annual dividend without interruption, I have a chance to break even sometime in mid 2030. Fortunately, I haven't predicated my retirement upon DX stock ownership.
@sanberdoo mREITS are not growth vehicles since they have to pay out most of their earnings in dividends. The best time to own mREITS is when we are going into a recession and the Yueld curve is inverted and the Fed is about to cut short term rates.
Don’t mReits short treasuries to hedge the rise in interest rates?
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