3 High Dividend Stocks Going Ex-Dividend Next Week

There are several dividend stocks going ex-dividend next week, (3/25/13 – 3/3/29/13) from the Financials section of our High Dividend Stocks By Sector Tables. The following 3 stocks are mortgage Real Estate Investment Trusts, or “mREITS”, as they are popularly known. They invest in mortgage-related securities, issued by government agencies, such as Fannie Mae and Freddie Mac, and use leverage to achieve high dividend yields.

Dividends: CMO increased its quarterly dividend to $.31, from $.30, while NLY and RSO maintained their dividend payouts this quarter. RSO maintained a $.25 quarterly dividend from late 2009 through 2011, but it dropped its quarterly payout to $.20 in 2012. Prior to the housing crisis, RSO paid as high as $.41. NLY dropped its dividend payout twice in 2012, to $.55, and then to $.50, before seemingly stabilizing at $.45 in Dec. 2012.

CMO-NLY-EXDIV

As REIT’s, they must pay out at least 90% of their income, in exchange for paying no corporate income taxes, hence their high dividend yields. Even with the decrease in dividend payouts, these yields are still quite high:

CMO-NLY-DIVYD

Current Valuations: The smallest stock by Market Cap, RSO’s P/E is closest to the low end of its 5-year P/E range, but CMO is the cheapest on a Price/Book basis:

CMO-NLY-PB

Options: Although all 3 of these stocks have options, we don’t list them in our Covered Calls Table or our Cash Secured Puts Table, due to low options yields. However, there over 30 other high yield trades in each of those free tables, which are maintained daily.

Financials: All 3 firms have similar Returns On Equity. RSO carries the least debt, and lags in Return On Investment and Interest Coverage:

CMO-NLY-ROE

Performance/Ownership: RSO has outperformed CMO and NLY in 2013, and over the past 52 weeks, partly due to its higher support from institutional and inside buyers:

CMO-NLY-PERF

Disclaimer: This article was written for informational purposes only and is not intended as investment advice.
Disclosure: The author owned CMO and NLY shares at the time of this writing.

 

Undervalued Financials: 3 High Dividend Stocks With Low 2011 PEG Ratios

By Robert Hauver

Since the crash, many investors have shunned financial stocks, having been badly burned during the market meltdown.  However, Standard & Poor’s recently published a projected 2011 EPS growth by sector table that puts the Financial sector near the top for expected growth in 2011:

S&P-SECTOR-EPS-2011

There are currently some financial dividend paying stocks that are undervalued, when analysed by their 2011 PEG values.  In addition, they each offer a  hefty dividend yield. This week, we screened for Financial stocks with attractive ROE, high dividend yields, strong profit margins, and low 2011 PEG ratios. We came up with 3 financial dividend stocks, 2 REIT’s and a Diversified Investments firm, which we’ve added to the Financials section of our High Dividend Stocks by Sector Tables:

Resource Capital Corp REIT., (RSO),  NY Mortgage Trust REIT, (NYMT), and Main St. Capital, (MAIN):

MAIN-NYMT-ROE-2011-03-4

Although it has the lowest dividend yield, MAIN looks to have the best metrics of these 3 firms, in terms of highest profit margin, and lowest leverage. MAIN also has the lowest dividend payout ratio, (see below).  However, RSO and NYMT are estimated to have much higher growth in 2011:

MAIN-NYMT-PEG-2011-03-04

RSO is the only stock in this group that has options available. However, its options yields are much lower than its current dividend yield.

Dividend Schedules/Payout Ratios:

MAIN switched from a quarterly to a monthly dividend in Sept. 2008, and has maintained a $.125/share monthly dividend ever since. Dividend Payout Ratio: 54.29%

NYMT currently pays $.18/share quarterly. Their next ex-dividend date should be approx. March 30, 2011. (Note: They decreased their dividend from $.25 to $.18 in July 2010). Dividend Payout Ratio: 72.64%

RSO currently pays $.25’share quarterly. Their next ex-dividend date should be approx. March 29, 2011. Dividend Payout Ratio: 111.70%

Company Profiles:

(MAIN): Main Street Capital is a principal investment firm that provides long-term debt and equity capital to lower middle market companies. Main Street’s investments are primarily made to support management buyouts, recapitalizations, growth financings and acquisitions of companies that operate in diverse industry sectors and generally have annual revenues ranging from $10 million to $100 million.

(NYMT): New York Mortgage Trust, Inc. is a real estate investment trust (REIT) that acquires and manages primarily real estate-related assets, including mortgage-backed securities (“RMBS”) issued by Fannie Mae or Freddie Mac (each an “Agency”), high credit quality residential adjustable rate mortgage (“ARM”) loans, non-Agency RMBS, and to a lesser extent, certain other real-estate related and financial assets. As a REIT, the Company is not subject to federal income tax, provided that it distributes at least 90% of its REIT income to stockholders.

(RSO): Resource Capital Corp’s investment strategy focuses on commercial real estate-related assets and, to a lesser extent, higher-yielding commercial finance assets. RCC invests in the following asset classes: commercial real estate-related assets such as whole loans, A-notes, B-notes, mezzanine loans and mortgage-related securities and commercial finance assets such as other asset-backed securities, senior secured corporate loans, equipment leases and notes, trust preferred securities, debt tranches of collateralized debt obligations and private equity investments principally issued by financial institutions.

Disclosure: No positions

Disclaimer: This article is written for informational purposes only.