Daily Dividend Report: CYS, WSC, WDR, DEI, TRN Friday, September 10, 1:42 PM ET, by Market News Video Staff This morning, Cypress Sharpridge Investments (CYS) declared its quarterly dividend of 60 cents per share, ...
Income Investors Watch Mortgage REITs Volatility Closely
By Market News Video Staff, Friday, December 10, 10:37 AM ET
Mortgage REIT investors received mixed news after the bell yesterday as both Capstead Mortgage (NYSE:CMO) and Cypress Sharpridge Investments (NYSE:CYS) issued press releases to their shareholders. Starting with the good news, CMO investors saw their quarterly dividend jump by 50%, from 26 cents per share up to 39 cents per share. The company's third quarter dividend was the lowest since Q407 as the sector saw funding costs increase as well as mortgage prepayments (in the form of refinances). The environment for mortgage REIT investors has improved considerably since the summer and CMO shareholders are looking at a yield of approximately 12.8% going forward.
And with the good news comes the bad, at least in the short-term. Cypress Sharpridge Investments announced a public offering of 12.15 million shares at the price of $12.46 per share. While offering price is almost 5.5% below the closing price on Thursday, investors were encouraged by the conference call with the management yesterday. The company assured investors that the 60 cent dividend payable this quarter is sustainable going forward, meaning investors could see a yield of 18.8% based on this morning's price.
Company specific news like investors saw last night can push individual stocks in the sector higher and lower each day, but for investors looking for more stability iShares has created an ETF for the sector. The iShares FTSE NAREIT Mortgage Capped Index Fund (AMEX:REM) holds shares of both CYS and CMO, as well as 47 other mortgage REIT holdings. The top stock in the fund is Annaly Capital Management (NYSE:NLY) accounting for more than 20% of the fund, followed by Chimera Investment Corportation (NYSE:CIM) accounting for about 11% of the fund. And while Capstead and Cypress have made substantial moves today, the iShares ETF is unchanged and yielding investors more than 10% currently. To see a complete list of holdings by the iShares FTSE NAREIT Mortgage Capped Index Fund, visit the REM Holdings page.
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