One of the greatest concepts ever is retiring and simply living off the dividends. No work, no tasks, just big steady distributions rolling in like clockwork (for you to spend and live life however you please). The problem with this, of course, is that many investors end up chasing after the biggest yield opportunities without properly considering the quality of those yields. In this report, we introduce our “Big-Yield Quality Scores,” ranking 10 very popular big yields, including PDI, JEPI, SCHD, USA, ARCC, AGNC and more.
AGNC: Tempting 18.5% Yield, Know the Big Risks
AGNC is a mortgage REIT that offers a tempting 18.5% Yield. We typically don’t invest in mortgage REITs (because of the risks), unless they offer a particularly compelling opportunity, like AGNC seems to be right now. In this report, we review the business, the market environment, the current valuation, dividend safety and risks. We conclude with our strong opinion on investing.
Big-Yield mREITs: P/B Data and Ratings
100 Preferred Stocks: This 7.6% Yielder is Attractive
AGNC: Temping 17.8% Yield, Compelling Near-Term Upside
AGNC preannounced a significant decline to its book value for the third quarter, and is now a very tempting 17% yield. Especially considering some uncertainty has been removed and higher interest rates will benefit the net interest income going forward. However, there are massive market cycle risks (and opportunities) that AGNC investors need to navigate. In this report, we review AGNC’s business model, its new book value, price appreciation potential, dividend safety and long-term fundamentals. We conclude with our strong opinion about investing.
40 Big-Dividend Mortgage REITs: Terrible YTD as Spreads Widen, Rates Rise, Fed Unwinds, Housing Risks
In theory, Mortgage REITs (or mREITs) do well when interest rates rise, but so far this year they have done poorly because MBS spreads have risen sharply (an indication of risk). Here is a look at 40 big-dividend mREITs, plus some insights on what is happening to their share prices (mainly courtesy of the Fed’s balance sheet), and then a few mREIT investment ideas worth considering.
AGNC: Book Value Down, 12.1% Yield
Mortgage REIT AGNC Investment Corp (AGNC) announced quarterly earnings on Monday, and not surprisingly—book value took a hit (amongst all the interest rate and agency-spread movements). The yield has now mathematically climbed to over 12%, and some investors are left wondering if the shares are worth owning or if the risks are too great. In this report, we review the business, the outlook, valuation and risks, and then conclude with our opinion on investing.
7% Yield mREIT Preferred Shares: Increasingly Compelling
If you have been paying attention to the Fed’s abrupt monetary policy shift this year (from pandemic doves to inflation hawks), you’ve likely noticed a variety pain points, ranging from a sputtering stock market to falling bond prices (and it’s all to address record high inflation). You may have also noticed a lot of “income and value” equities have performed much better than “growth equities” this year as the pandemic “growth stock” trade now sits firmly in the doldrums (for example, the Blue Harbinger Income Equity portfolio is positive this year while the overall market is down, and growth stocks are down even more). However, one type of income security that has been experiencing significant short-term pain this year, is the mortgage REIT.
New Options Trade: High Upfront Income, Attractive Mortgage REIT
As interest rates (including mortgage rates) have slipped in recent weeks, so too has the share price of this attractive mortgage REIT fallen. It now trades at a significant discount to its last reported book value, and we believe this combination of events has set us up for a nice high-income-generating options trade. Specifically, we believe the trade described in this report is an attractive one to place today and potentially over the next few trading sessions, as long as the underlying share price doesn’t move too dramatically before then.
Attractive 8.8% Yield: Paid Monthly
The so-called “risk-reward” tradeoff is an investing adage whereby the more risk you take—the more potential reward (return) you will receive. While that is a useful analogy (and there may be some truth to it) the investment we review in this report offers a very high return (in the form of big monthly dividend payments) with relatively low risk, and it is a great place to temporarily park some of your cash (if you are willing to take on more risk than your FDIC insured bank account). In this report, we review the company’s business model, income profile, financial position and dividend prospects, and then finally conclude with our opinion on investing.
Helicopter Fed: Top 10 mREITs and Bond CEFs (Huge Yields, Discounted Prices)
This article shares our Top 10 compelling mREITs and Bond CEFs. They trade at significant discounts to their book values and are being supported, to varying degrees, by the actions of the US Fed. The Fed is pumping an unlimited amount of liquidity into the system by buying the types of bonds these compelling mREITs and CEFs own.