Daily Stock Analysis– Mortgage-backed REITs, high dividends, and potential perils

Send us Fan MailREITs or real estate investment trusts have been around since 1960. REITs allow investors to invest in real estate without direct ownership. This investment vehicle can be simple or incredibly complicated. Many people are attracted to the high current dividends. There can also be an illusion of safety because the mortgages used in some REITs are back by the US Government. In today's show, I discuss the opportunities REITs offer. Plus, I discuss the downside too. Investors can learn a lot from the market crash in mortgage-backed REITs that began with the Coronavirus market crash between February and March of 2020. Some mREITs have not rebounded. Today's discussion includes Annaly Capital Management, Starwood Property Trust, AGNC Investment Corp., Two Harbors Investment, and PennyMac Mortgage Investment Trust.Listen, learn, & subscribe This information is for educational purposes only. Not an offer to buy or sell any stock or an offer of advice.References from today's show:Mortgage Firm Struggles to Meet Margin Calls as Market Turmoil Continues https://www.wsj.com/articles/mortgage-firm-struggles-to-meet-margin-calls-as-market-turmoil-continues-11584975633Mortgage REITs Come Under Stress That Even the Fed Might Not Be Able to Easehttps://www.barrons.com/articles/target-stock-is-climbing-after-it-reported-another-banner-quarter-for-earnings-51614694528Basics of Fannie Mae Single-Family MBS https://capitalmarkets.fanniemae.com/media/4271/displayFreddie Mac—Federal Home Loan Mortgage Corp. (FHLMC) https://www.investopedia.com/terms/f/freddiemac.aspThe Inverse Relationship Between Interest Rates and Bond Prices https://www.investopedia.com/ask/answers/why-interest-rates-have-inverse-relationship-bond-prices/Two Harbors Investments Corp. Fourth Quarter 2020 Earnings Call https://s24.q4cdn.com/261832436/files/doc_financials/2020/q4/TWO-Q4-2020-Earnings-Call-Presentation-Final.pdfHow Risky Is AGNC Investment Corp.'s Dividend? https://www.fool.com/investing/2021/02/17/how-risky-is-agnc-investment-corps-dividend/#:~:text=AGNC%20cut%20its%20monthly%20payout%20from%20$0.15%20per,conference%20call%20that%20the%20dividend%20cut%20was%20%22unnecessary.%22Capital Destruction, Inc. A look at mortgage REITs. https://www.morningstar.com/articles/641458/capital-destruction-incTwo Harbors Investment Sees Unusually Large Options Volume https://www.marketbeat.com/instant-alerts/nyse-two-options-data-report-2021-02/Commercial Properties' Ability to Repay Mortgages Was Overstated, Study Finds https://www.wsj.com/articles/commercial-properties-ability-to-repay-mortgages-was-overstated-study-finds-11597152211