StockCall Study on Newcastle Investment and Anworth: mREITs Offer Good Returns and Dividends

Feb 15, 2013, 08:00 ET from

LONDON, February 15, 2013 /PRNewswire/ --

MBS REITs are facing stiff competition and this time it is from the Fed. The mortgage interest rate declines have squeezed the margins enjoyed by MBS REITs. The segment is also getting crowded, posing stiffer competition for survival. However, the winners in the segment are the REITs with the right kind of asset mix in their portfolio. QE3 created new challenges for pure play Agency MBS REITs, to which many are fast adapting. Newcastle Investment Corp. (NYSE:  NCT) offers good capital growth along with healthy dividend. However, the company is diversifying itself and boosting its Mortgage Servicing business. On the other hand, Anworth Mortgage Asset Corporation (NYSE:  ANH) paid higher dividend despite soft Q4 results. StockCall free coverage on Newcastle Investment and Anworth is available upon registration at

Anworth Mortgage Asset Corporation Offers High Dividend Yield

Anworth Mortgage Asset Corporation mainly invests in Mortgage backed Securities, specializing in the securities backed by government agencies like Freddie Mac and Fannie Mae. The REIT recently reported its fourth quarter results and its interest income stood at $45.1 million, showing 16 percent decline. However, its interest expense remained flat and its net interest rate spread declined. It pays 15 cents per share in quarterly dividend. Register now and get access to the free analysis on Anworth Mortgage Asset Corporation at  

Anworth Mortgage Asset Corporation is mainly invested in Agency MBS, which have been greatly affected by Quantitative Easing. However most of its MBS belong to fixed rate or hybrid ARM category. It also has fairly good percentage of non-agency MBS, which cushions the blow. It is also shielded well against prepayment acceleration.

Anworth Mortgage Asset Corporation delivered 8 percent return on a Year-to-Date basis and further sweetened it with 9.62 percent dividend yield. While its 52-week return is rather disappointing, the stock seems to have bounced back and is likely to retain the flow. Overall, Anworth Mortgage Asset Corporation provides a good investment opportunity with its well-insulated portfolio of Agency and Non-Agency REITs.

Newcastle Investment Corp. is up and running, hitting new 52-week high on its way. The REIT recently partnered with Nationstar Mortgage. The new collaboration will help the company in enhancing its mortgage servicing business. The duo aims to buy such rights mainly from Bank of America, which is currently offloading them. Newcastle Investment Corp. may also spin off its Mortgage Servicing rights to unlock maximum value. The new outfit has been branded New Residential.  

Newcastle Investment Corp. Spins Off Mortgage Servicing Business

Newcastle Investment Corp. stock is up 30 percent this year and the momentum is likely to continue as the company makes aggressive moves to boost its position. Its stock is also getting lapped up by its management as its Director Wesley Edens and Secretary Randal Nardone purchased 106,950 shares of the company stock. Insider purchase is generally an encouraging sign for investors. Its stock price is also expected to grow further in-line with improved conditions in the general economy and housing sector. Newcastle Investment Corp. also offers attractive dividend and its yield stands at 7.86 percent, making it an attractive investment option. Download the free technical research on Newcastle Investment Corp. by signing up at  

Newcastle Investment Corp. also has good management as evidenced by the fact that it bought discounted Mortgage Backed securities and continues to benefit. Its new spin-off is expected to bring further value to investors.  

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