Are Mortgage REITs in Danger? AGNC, NLY, ARR, ORC

When looking at all the different types of high yielding investments in 2022, including business development companies, closed end funds, master limited partnerships and so fourth, one sector stood apart for its bad performance last year. Mortgage REITs, otherwise known as mREITs, were exceptionally bad performers in 2022. Two of the largest mREIT ETFs, including the iShares Mortgage Real Estate ETF and the VanEck Mortgage REIT Income ETF were both down roughly 31% last year. Compared to equity REITs, BDCs and other dividend investments, mREITs performed worse than these types of investments. On top of poor stock price performance, a handful of these companies, including Invesco Mortgage Capital, Orchid Island Capital and Chimera Investment Corporation announced sizable dividend cuts last year.

With so much bad news in this sector, I think it’s worth asking a few questions. Why have mREITs been performing so poorly? Why have companies specifically in this sector been announcing more dividend cuts than other sectors? Are there any decent mREITs out there and what does the future hold for these companies? Is 2023 gonna be even worse for these types of investments? In order to answer these questions we’ll have to have a proper understand of how these investment types work, including how they conduct business and earn their revenues for their shareholders. I also analyzed, to my knowledge, every single mortgage REIT that experienced a dividend cut in 2022 and and I’ll present my findings and share what all these companies had in common.

#dividendinvesting #dividends #dividendstocks