New Residential Investment Corp (NRZ)
Rating: BUY
Current Price: $12.77
Price Target: $16.15
Thesis:
We’ve initiated a position in New Residential Investment Corp (NRZ) within our Blue Harbinger Income Equity portfolio. We believe this high dividend yield (+14.4%) Mortgage Real Estate Investment Trust (mREIT) is currently trading at a significant discount to its value (we value it with a dividend discount model assuming a conservative zero percent growth rate and an 11.39% cost of equity).
NRZ emerged in the mortgage servicing space following the financial crisis as banks had to shed risk and the mortgage markets became more complex. Even though the unique circumstances that existed following the financial crisis are fading, we believe this company has the ability to continue delivering big returns for many years to come. You can read our full report on NRZ here.