4 Double-Digit Dividend Distributors

Core Insights - The article discusses the performance and valuation of various mortgage REITs, particularly focusing on Ready Capital (RC), AGNC Investment (AGNC), Dynex Capital (DX), and Orchid Island Capital (ORC) [3][4][5][8]. Ready Capital (RC) - Ready Capital has underperformed in recent years due to declining asset values and non-performing loans, leading to write-downs that have affected investor confidence [3]. - Despite the challenges, the management's decision to mark down poor-performing assets is seen as a positive step, as it may lead to a more accurate reflection of the company's value [3]. - RC has a high dividend yield of 14.1%, which is attractive compared to its book value yield of 9.2%, indicating a solid amount of book value available for investment [4]. AGNC Investment (AGNC) - AGNC is trading at a premium of approximately 1.14 times its book value, which is considered high and potentially detrimental for long-term shareholders [5]. - The article suggests that AGNC should take advantage of its high valuation by issuing equity, which could enhance long-term returns [5]. - AGNC's dividend yield is 14.8%, but the high price-to-book ratio raises concerns about the sustainability of this yield [7]. Dynex Capital (DX) - DX trades at about 95% of its book value, and while it is projected to experience a dip in book value, it is still viewed as a better investment compared to AGNC [5][6]. - The current market perception of DX is negative due to its reported earnings, which are impacted by historical amortized cost accounting and hedging strategies [5]. - The article highlights a significant price-to-book ratio gap between AGNC and DX, suggesting inefficiencies in the market [5]. Orchid Island Capital (ORC) - ORC is compared unfavorably to DX, with DX having a better historical performance and internal management structure [5][6]. - The article implies that investors should prefer DX over ORC, despite ORC's higher dividend yield, due to DX's superior management and performance history [5][9]. Preferred Shares - The article notes that preferred shares may offer better long-term investment opportunities compared to common shares in the mortgage REIT sector [7]. - Preferred shares of AGNC have outperformed common shares, particularly during market downturns, indicating their potential as a more stable investment [7].