When it appeared that the Fed might dump (sell) its hoard of MBS, investors in the Mortgage REITS like NLY worried that would have driven the value of its MBS portfolio as interest rates would rise.
That fear has subsided now that Dr. Bernanke is saying things like, "We're quite comfortable that we can exit [by selling its MBS or letting them mature] in a way that is both smooth and in which we provide lots of information to markets in advance, so they will know what's coming and be able to anticipate."
Looking at the five-year chart below, you'll most likely conclude that now may be a good time to consider owning shares of NLY. You might want to "scale in" and do some Jim Cramer-style "schnitzeling." Keep in mind that NLY has already lowered its dividend due to "yield compression." Up to now that's impacted its trailing twelve month "cash dividend payout ratio", which I expect will improve.
With a yield-to-price of 15.8% and its cash dividend payout ratio so low (technically quite comparable to NLY's payout ratio), yield-chasing investors may prefer AGNC, although we can't rule out an unexpected dividend decrease. Both NLY and AGNC don't report earnings until April 29.
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