3 mREIT Stock to Watch Amid Ongoing Volatile Industry Trends

Industry Overview - The Zacks REIT and Equity Trust industry includes mortgage REITs (mREITs) that invest in and originate mortgages and mortgage-backed securities (MBS), providing mortgage credit for homeowners and businesses [3] - The industry is currently facing challenges due to volatile mortgage rates and high interest rates, which are affecting valuations and operational performance [6][7] Current Market Conditions - Recent volatility in mortgage rates has led to a decrease in loan demand, although there are signs of improvement in purchase applications [4] - The Federal Reserve's interest rate cuts are expected to gradually lower mortgage rates, which may increase loan demand over time [1][5] Financial Performance - The Zacks REIT and Equity Trust industry has underperformed compared to the broader Zacks Finance sector and the S&P 500, gaining only 13.3% over the past year compared to 29.6% and 25.2% respectively [13] - The industry's current-year earnings estimate has decreased by 16% over the last year, indicating a negative earnings outlook [11] Valuation Metrics - The industry is currently trading at a trailing 12-month price-to-book (P/BV) ratio of 0.96X, significantly lower than the S&P 500's 8.88X [15] - Compared to the broader Zacks Finance sector, which has a P/BV of 4.18X, the REIT and Equity Trust industry is trading at a substantial discount [17] Company Highlights Annaly Capital Management, Inc. (NLY) - NLY's investment strategy focuses on traditional Agency MBSs and aims to enhance returns through non-agency and credit-focused asset classes [19] - The company has a market capitalization of $11.6 billion and a Zacks Rank of 1 (Strong Buy) with a projected 2025 earnings of$2.81 per share, reflecting a year-over-year rise of 4.1% [21] AG Mortgage Investment Trust, Inc. (MITT) - MITT invests in residential mortgage assets and has recently acquired approximately $150 million in home equity loans, with plans for an additional$200 million [23] - The company has a market capitalization of $1.26 billion and a Zacks Rank of 3 (Hold), with a projected 2025 earnings of 89 cents per share, indicating a year-over-year surge of 106.9$1.06 billion and a Zacks Rank of 2 (Buy), with a projected 2025 earnings of $1.87 per share, indicating a year-over-year rise of 654.3% [29]