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Western Asset Mortgage Capital: Recent Dividend Cut And Declining Book Value

Daniel P. Varga profile picture
Daniel P. Varga


  • The management had no choice but to cut the dividend in March by 33% which translates to a forward dividend yield of 10.88%.
  • The management has been restructuring WMC’s investment portfolio to residential real estate assets and exiting commercial ones.
  • The stock is fairly valued with declining book value per share and negative economic return in 2021.

Üzletember üzembe százalékos jel, amely nyomtatási képernyő fa kocka blokk fel nyíl az üzleti nyereség és a gazdasági növekedés koncepció.

Dilok Klaisataporn/iStock via Getty Images

Investment thesis

Western Asset Mortgage Capital Corporation (NYSE:WMC) had a rough 2021 and 2022 seems dreadfully similar. The management has started to restructure the company's investment portfolio in the fourth quarter to exit from shareholder

WMC investment portfolio

Fourth Quarter 2021 Presentation

WMC price to book ratio

Seeking Alpha

WMC price and book value
Data by YCharts

WMC dividend payout ratio

The table is created by the author. All figures are from the company's financial statements and SA Earnings Estimates.

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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