Technical Research on American Capital and Armour Residential: Agency Mortgage REITs Offer Good Returns
LONDON, February 12, 2013 /PRNewswire/ --
Investment in REITs is an excellent way to draw an income portfolio. REITs are legally obligated to distribute 90 percent of their taxable earnings to their unit holders. While REITs specializing in Mortgage Backed Securities are performing well, they also face stiff competition from the FED's initiative to buy MBSs. Agency Mortgage REITs use leverage to increase their return. However, it also increases their risk profile. The REIT class is also set to suffer due to high prepayment rates. Despite these weaknesses, American Capital Agency Corp. (NASDAQ: AGNC) reported good quarterly results and showed encouraging growth on both Y-o-Y and Q-o-Q basis. Armour Residential REIT Inc. (NYSE: ARR) also is an attractive investment option, thanks to its dividend yield. StockCall has posted free technical research reports on American Capital and Armour Residential and these can be accessed by signing up at
Armour Residential Ups Dividend
Armour Residential is a mortgage investment REIT and invests in mortgage backed securities. The REIT is an attractive investment option as it currently distributes 8 cents per unit every month. It also boasts of healthy margins and good revenue growth. Its market price declined marginally over the period of the past 12 months and it currently trades at attractive multiples. Its Price-to-Book ratio is near 1, in comparison to industry average of 2. Its dividend yield is also higher than the ones sported by its peers. Armour Residential technical report can be accessed for free by signing up at
While the REIT has attractive dividend yield, investors should carry out due diligence to see the possibility of continued dividend growth. Since the REIT has good revenue growth rate, it is expected to retain its high dividend rate in the future as well. Armour Residential REIT holds its major stakes in Ginnie Mae, Fannie Mae and Freddie Mac. These companies are making a comeback and with the improvement in their stock prices Armour Residential REIT directly stands to benefit.
At the very same time, Armour Residential sports high leverage ratio. While it helps to boost profit margins, it may also increase its risk profile. However, Armour Residential investors stand to gain as the company recently authorized a share repurchase program worth $100 million.
American Capital Agency Announces Q4 Results
American Capital Agency Corp. had a good run in 2012. The REIT reported its fourth quarter EPS at $2.37, about 10 times higher than the EPS reported for its previous quarter. REITs investing in MBS are now competing with FED and trying to get the piece of the same pie. However, American Capital Agency is looking to diversify its holding to include HARP loans and lower loan balance mortgages, lowering its risk profile. Download the free report on American Capital upon registration at
American Capital Agency paid $1.25 per share in dividend for the fourth quarter of FY 2012. The REIT has a history of solid dividend payment and is likely to continue on that path. For its fourth quarter, it also reported an increase in its Return on Equity. It is also working to augment its net interest spread, which is its mainstay. The task is set to get tougher due to changed rulings. However, American Capital Agency looks set to achieve its targets. The REIT is also going ahead with its share repurchase program to return value to its investors. In the coming future, American Capital Agency stock is expected to make moderate up move.
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