Thursday, August 8, 2013

How mREITs Make Money (And 2 Keys for a Stable Dividend)

Over the past few months, popular mREITs -- mortgage real estate investment trusts, that is -- have been pummeled in the markets.

For these mREITS, the market has ignored the rebounding real estate market, the explicit backing of Fannie Mae  (NASDAQOTCBB: FNMA  ) and Freddie Mac  (NASDAQOTCBB: FMCC  ) by the U.S. government, strong performances from mortgage originators this year, and the impressive dividends offered by leading companies like American Capital Agency (NASDAQ: AGNC  ) , CYS Investments (NYSE: CYS  ) , and Hatteras Financial (NYSE: HTSI  ) . 

To understand what's driving this sector ever lower, Motley Fool contributor Jay Jenkins dives into the most basic question for mREITs: How do they actually make money?

The answer is fundamentally simple, but the nuance becomes complex when analyzing the future of these company's dividends.

Make no mistake, dividend stocks can make you rich. It's as simple as that. But only if they will pay out over the long term. As mREITs struggle to maintain earnings sufficient to pay the dividend, there are other opportunities in the market to grow your investment income portfolio. And with stability over the long term, the compounding effect of the quarterly payouts, as well as their growth, adds up faster than most investors imagine. With this in mind, our analysts sat down to identify the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list in this free report of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.

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