Core Viewpoint - Invesco Mortgage Capital Inc. has declared a cash dividend of $0.12 per share for January 2026, with payment scheduled for February 13, 2026, to stockholders of record as of January 26, 2026 [1] Financial Performance - The book value per common share as of January 12, 2026, is estimated to be in the range of $8.94 to $9.30 [7] - The debt-to-equity ratio is estimated to be 6.5x [7] - The economic debt-to-equity ratio is estimated to be 6.9x [7] Company Overview - Invesco Mortgage Capital Inc. is a real estate investment trust focused on investing in, financing, and managing mortgage-backed securities and other mortgage-related assets [8] - The company is externally managed and advised by Invesco Advisers, Inc., a subsidiary of Invesco Ltd., a leading independent global investment management firm [8]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Horizon Technology Finance Corp (NASDAQ:HRZN) - The stock has a dividend yield of 19.61% [6] - Analyst Michael Diana from Maxim Group maintained a Buy rating but reduced the price target from $10 to $7.5 as of August 11, 2025, with an accuracy rate of 56% [6] - Analyst Bryce Rowe from B. Riley Securities upgraded the stock from Sell to Neutral and lowered the price target from $9 to $7 on May 13, 2025, with an accuracy rate of 57% [6] - Recent news includes the pricing of a $57.50 million offering of 7.00% notes due 2028 on December 11 [6] Group 2: Invesco Mortgage Capital Inc (NYSE:IVR) - The stock has a dividend yield of 15.84% [6] - Analyst Douglas Harter from UBS maintained a Neutral rating and increased the price target from $7.25 to $7.5 on September 3, 2025, with an accuracy rate of 56% [6] - Analyst Aaron Hecht from JMP Securities maintained a Market Perform rating on January 23, 2025, with an accuracy rate of 55% [6] - Recent news indicates that Invesco Mortgage Capital posted in-line quarterly earnings on October 30 [6] Group 3: ARMOUR Residential REIT, Inc. (NYSE:ARR) - The stock has a dividend yield of 15.26% [6] - Analyst Douglas Harter from UBS maintained a Neutral rating but cut the price target from $16 to $15.5 on September 3, 2025, with an accuracy rate of 56% [6] - Analyst Jason Weaver from Jones Trading maintained a Hold rating on April 24, 2025, with an accuracy rate of 53% [6] - Recent news reveals that ARMOUR Residential REIT posted downbeat quarterly sales on October 22 [6]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Horizon Technology Finance Corp (NASDAQ:HRZN) - The stock has a dividend yield of 19.61% [6] - Analyst Michael Diana from Maxim Group maintained a Buy rating but reduced the price target from $10 to $7.5 as of August 11, 2025, with an accuracy rate of 56% [6] - Analyst Bryce Rowe from B. Riley Securities upgraded the stock from Sell to Neutral and lowered the price target from $9 to $7 on May 13, 2025, with an accuracy rate of 57% [6] - Recent news includes the pricing of a $57.50 million offering of 7.00% notes due 2028 on December 11 [6] Group 2: Invesco Mortgage Capital Inc (NYSE:IVR) - The stock has a dividend yield of 15.84% [6] - Analyst Douglas Harter from UBS maintained a Neutral rating and increased the price target from $7.25 to $7.5 on September 3, 2025, with an accuracy rate of 56% [6] - Analyst Aaron Hecht from JMP Securities maintained a Market Perform rating on January 23, 2025, with an accuracy rate of 55% [6] - Recent news indicates that Invesco Mortgage Capital posted in-line quarterly earnings on October 30 [6] Group 3: ARMOUR Residential REIT, Inc. (NYSE:ARR) - The stock has a dividend yield of 15.26% [6] - Analyst Douglas Harter from UBS maintained a Neutral rating but cut the price target from $16 to $15.5 on September 3, 2025, with an accuracy rate of 56% [6] - Analyst Jason Weaver from Jones Trading maintained a Hold rating on April 24, 2025, with an accuracy rate of 53% [6] - Recent news reveals that ARMOUR Residential REIT posted downbeat quarterly sales on October 22 [6]

Group 1: Rio Tinto - Rio Tinto is an international mining company with interests in various minerals and has a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for Rio Tinto's current year earnings increased by 5.8% over the last 60 days [1] - Rio Tinto's shares gained 21.8% over the last three months, outperforming the S&P 500's gain of 3.3% [2] - The company possesses a Momentum Score of A [2] Group 2: Invesco Mortgage Capital - Invesco Mortgage Capital is a real estate investment trust focusing on financing and managing mortgage-backed securities and loans, with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for Invesco Mortgage Capital's current year earnings increased by 4% over the last 60 days [2] - Invesco Mortgage Capital's shares gained 20.5% over the last three months, also outperforming the S&P 500's gain of 3.3% [3] - The company possesses a Momentum Score of A [3] Group 3: VALE - VALE is one of the world's largest producers of iron ore and has a Zacks Rank 1 [3][4] - The Zacks Consensus Estimate for VALE's current year earnings increased by 7.5% over the last 60 days [3] - VALE's shares gained 21.3% over the last three months, again outperforming the S&P 500's gain of 3.3% [4] - The company possesses a Momentum Score of B [4]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Invesco Mortgage Capital Inc (IVR) - Dividend Yield: 17.25% [6] - UBS analyst Douglas Harter maintained a Neutral rating and raised the price target from $7.25 to $7.5 on Sept. 3, 2025, with an accuracy rate of 57% [6] - JMP Securities analyst Aaron Hecht maintained a Market Perform rating on Jan. 23, 2025, with an accuracy rate of 54% [6] - Recent News: On Oct. 30, Invesco Mortgage Capital posted in-line quarterly earnings [6] Group 2: Dynex Capital Inc (DX) - Dividend Yield: 14.72% [6] - Keefe, Bruyette & Woods analyst Bose George maintained an Outperform rating and raised the price target from $14 to $14.5 on Dec. 18, 2025, with an accuracy rate of 70% [6] - Jones Trading analyst Jason Weaver maintained a Buy rating with a price target of $14 on Oct. 20, 2025, with an accuracy rate of 54% [6] - Recent News: On Oct. 20, Dynex Capital posted mixed quarterly results [6] Group 3: MFA Financial Inc (MFA) - Dividend Yield: 14.94% [6] - UBS analyst Douglas Harter maintained a Buy rating and cut the price target from $10.5 to $10.25 on Nov. 18, 2025, with an accuracy rate of 57% [6] - Jones Trading analyst Jason Weaver maintained a Hold rating on Aug. 11, 2025, with an accuracy rate of 54% [6] - Recent News: On Nov. 6, MFA Financial posted mixed quarterly results [6]

Core Viewpoint - Invesco Mortgage Capital Inc. has declared a cash dividend of $0.36 per share for Q4 2025 and will transition to monthly dividend payments starting in Q1 2026, reflecting the strength of its investment portfolio and market conditions [1][2][3]. Dividend Announcement - The Board of Directors declared a cash dividend of $0.36 per share for the fourth quarter of 2025 [1]. - The dividend will be paid on January 23, 2026, to stockholders of record as of December 29, 2025, with an ex-dividend date also on December 29, 2025 [1]. Change in Dividend Frequency - The Company will change its common dividend declaration and payment frequency from quarterly to monthly starting in Q1 2026 [2]. - The first monthly common dividend declaration is expected on January 15, 2026, with subsequent payments made monthly thereafter [2]. Management Commentary - The CEO stated that the increase in the common stock dividend reflects the strength of the investment portfolio, liquidity position, and capital structure, positioning the Company to benefit from the improved environment for Agency MBS [3]. - The transition to monthly dividends aims to provide more timely and consistent income for common stockholders [3]. Company Overview - Invesco Mortgage Capital Inc. is a real estate investment trust focused on investing in, financing, and managing mortgage-backed securities and other mortgage-related assets [4]. - The Company is externally managed and advised by Invesco Advisers, Inc., a subsidiary of Invesco Ltd., a leading global investment management firm [4].

Core Viewpoint - The Global X SuperDividend ETF (SDIV) offers a high dividend yield of 9.7%, significantly higher than other ETFs, but faces sustainability issues due to its reliance on mortgage REITs and high payout ratios [3][4][5]. Group 1: Dividend Yield Comparison - SDIV's yield of 9.7% is more than triple the 2.5% yield from the Vanguard High Dividend Yield ETF (VYM) and over double the 3.7% yield from the Schwab U.S. Dividend Equity ETF (SCHD) [3]. - The fund tracks 100 of the highest-yielding equities globally, with a focus on mortgage REITs, Brazilian companies, and emerging markets [3]. Group 2: Fund Structure and Performance - SDIV has a 0.58% expense ratio, which is nearly ten times higher than that of VYM and SCHD, indicating higher costs associated with managing the fund [4]. - The fund's portfolio turnover rate is 93%, suggesting frequent trading that may negatively impact returns [4]. Group 3: Dividend Sustainability Concerns - The monthly dividend has decreased from $0.255 in early 2023 to $0.19, marking a 25% reduction, which highlights structural challenges within the fund [4]. - Key holdings in SDIV, particularly mortgage REITs, exhibit unsustainable payout ratios, such as Annaly Capital Management with a 122% payout ratio and AGNC Investment with a 215% payout ratio [5][6]. - The reliance on high leverage and sensitivity to interest rate fluctuations makes mortgage REITs vulnerable, as their book values can decline rapidly [6]. Group 4: Comparison with Other Investment Options - The high yield of SDIV is primarily driven by mortgage REITs with payout ratios exceeding 200%, which raises concerns about the sustainability of these dividends [7]. - In contrast, the JPMorgan Equity Premium Income ETF (JEPI) offers a more sustainable yield of 8.2% through covered calls on quality U.S. stocks, with payout ratios like Broadcom's at 61% [7].

Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies in the market [2] - Invesco Mortgage Capital (IVR) is highlighted as a strong value stock, currently holding a Zacks Rank of 2 (Buy) and an A for Value [4][8] Valuation Metrics - IVR has a Forward P/E ratio of 3.7, significantly lower than the industry's average of 7.95, indicating potential undervaluation [4] - The company's P/B ratio stands at 0.9, compared to the industry's average of 0.94, suggesting a solid valuation relative to its book value [5] - IVR's P/S ratio is 1.88, which is lower than the industry's average of 2.07, reinforcing the notion of undervaluation [6] - The P/CF ratio for IVR is 15.61, which is attractive compared to the industry's average of 17.51, indicating a favorable cash flow outlook [7] Investment Outlook - The combination of these valuation metrics suggests that Invesco Mortgage Capital is likely undervalued at present, making it an appealing option for value investors [8]

Group 1 - The article discusses the investment strategy of purchasing shares in Invesco Mortgage Capital Inc. (IVR) due to its high expected return on equity (ROE) and its current discount to book value [2] - IVR has been identified as a historically poor performer, yet the current market conditions present a potential opportunity for investors [2] - The Trade With Beta team, which has extensive experience in preferred stocks and baby bonds, provides insights and analysis on various fixed-income instruments, including regular reviews and investment picks [1] Group 2 - The Trade With Beta service includes features such as frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, and hedging strategies [2] - The team is led by an experienced trader with over 15 years in day trading and a group of 40 analysts focused on identifying mispriced investments [2]

Investment Portfolio - As of September 30, 2025, the company was invested in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS), among other mortgage-related assets[118]. - As of September 30, 2025, the total investment portfolio was $5,749,238, a decrease of 2.1% from $5,873,696 as of September 30, 2024[134]. - The holdings of 30-year fixed-rate Agency RMBS represented 83% of the total investment portfolio, consistent with the previous quarter but down from 87% a year ago[134]. - The holdings of Agency CMBS represented approximately 16% of the total investment portfolio as of September 30, 2025, up from 11% a year ago[137]. - The company purchased $2.0 billion in MBS during the nine months ended September 30, 2025, compared to $1.9 billion in the same period of 2024[229]. Financial Performance - Net interest income for the three months ended September 30, 2025, was $17,614, an increase of 134.0% compared to $7,510 for the same period in 2024[156]. - The net income attributable to common stockholders for the three months ended September 30, 2025, was $50,208, up 42.4% from $35,271 in the same period of 2024[156]. - For the three months ended September 30, 2025, net income attributable to common stockholders was $50.2 million, an increase from $35.3 million in the same period of 2024, resulting in a basic and diluted net income per share of $0.74 compared to $0.63 per share in 2024[194]. - For the nine months ended September 30, 2025, net income attributable to common stockholders was $39.9 million, slightly down from $40.2 million in 2024, with a basic and diluted net income per share of $0.61 compared to $0.78 per share in 2024[195]. - Earnings available for distribution for Q3 2025 increased slightly to $39,026,000 compared to $38,345,000 in Q3 2024, reflecting a 1.8% increase[208]. Interest Rates and Economic Indicators - The effective Federal Funds rate decreased to 4.09% as of September 30, 2025, down from 4.33% at the end of the previous quarter, reflecting a 0.24% decline[129]. - The yield on the two-year Treasury fell to 3.60%, a decrease of 12 basis points from the previous quarter, while the ten-year yield decreased by 8 basis points to 4.15%[126]. - Inflation continued to exceed the Federal Reserve's 2% target, with the headline consumer price index (CPI) rising 2.9% year-over-year in August 2025[124]. - The average unemployment rate increased slightly to 4.3% in August 2025, up from 4.1% in June 2025[124]. Borrowings and Funding - The average balance of collateralized borrowings under repurchase agreements for the quarter ended September 30, 2025, was $4,889,782[141]. - Total average borrowings decreased by $114.7 million to $4,889,782 thousand for the three months ended September 30, 2025, but increased by $238.7 million to $4,799,047 thousand for the nine months ended September 30, 2025 compared to the same periods in 2024[168]. - Average cost of funds decreased by 78 basis points to 4.52% for the three months ended September 30, 2025, and by 95 basis points to 4.53% for the nine months ended September 30, 2025 compared to the same periods in 2024[169]. Derivative Instruments and Gains/Losses - The company recorded net losses on derivative instruments of $9.2 million for the three months ended September 30, 2025, compared to net losses of $127.3 million in the same period of 2024[194]. - The company recorded a realized loss on derivative instruments of $49,189,000 for Q3 2025, compared to a loss of $172,797,000 in Q3 2024, indicating an improvement[206]. - The company recognized net losses of $8.6 million on futures contracts for the three months ended September 30, 2025, and $55.0 million for the nine months ended September 30, 2025[188]. - The company recorded net gains of $2.6 million on TBAs during the nine months ended September 30, 2025, compared to net gains of $1.6 million in the same period of 2024[189]. Shareholder Activities - The company sold 4,638,385 shares of common stock during the three months ended September 30, 2025, generating cash proceeds of $36,145 after fees[148]. - The company did not repurchase any shares of common stock during the nine months ended September 30, 2025[149]. - The company repurchased and retired 89,223 shares of Series C Preferred Stock during the three months ended September 30, 2025[192]. Expenses and Management Fees - Management fees incurred were $2.7 million for the three months ended September 30, 2025, compared to $2.9 million in the same period of 2024[190]. - General and administrative expenses not covered under the management agreement amounted to $1.8 million for the three months ended September 30, 2025, consistent with the same period in 2024[191]. - Total expenses for the three months ended September 30, 2025, were $4,465,000, a slight decrease from $4,693,000 for the same period in 2024[173]. Liquidity and Cash Flow - The company believes it has sufficient liquidity and capital resources for ongoing commitments and potential investments, ensuring continued qualification as a REIT[226]. - As of September 30, 2025, the company held cash, cash equivalents, and restricted cash of $180.7 million, an increase from $168.5 million as of September 30, 2024[228]. - Operating activities provided net cash of approximately $97.3 million for the nine months ended September 30, 2025, compared to $121.3 million for the same period in 2024, reflecting a decrease of 19.8%[228]. - Financing activities provided net cash of $245.1 million for the nine months ended September 30, 2025, down from $747.3 million in the previous year[230].