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Trust and Custody Banks: Financial Winners

Based on a quarterly payout of 45 cents, Annaly's shares have a dividend yield of 12.22%. With a quarterly dividend of $1.25, American Capital Agency's shares have a yield of 17.21%.

With so much at stake, especially if long-term interest rates at some point move up very rapidly, Monday's declines for the above REIT stocks aren't very significant.

RBC Capital Markets analyst Jason Arnold remains bullish on both REITs, with "outperform" ratings, along with a $19 price target for Annaly and a $34 price target for AGNC.

In a note to clients on May 3, Arnold wrote that "Annaly remains a favorite from our coverage -- Valuation remains very attractive at 1.0x book value relative to the roughly 12% dividend yield anticipated over the next 12 months, with returns of this magnitude expected to persist into 2014."

Arnold wrote in a note to clients on AGNC on May 5 that "valuation remains attractive at 1.06x book relative to our sizable 16% forward 12-month dividend yield outlook."

-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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AGNC $21.60 0.00%
BK $40.50 0.00%
NTRS $69.83 0.00%
NLY $10.29 0.00%
STT $75.68 0.00%


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