4 High Yield REITs To Own In An Uncertain Market
Over the years, REITs have been a nice option for those investors who are seeking a steady and consistent income along with the potential for share growth. Because these entities are required to pay out 90% of their taxable income to their investors, those who possess these shares are often rewarded with nice dividend yields.
For those who already own REIT shares, or are considering them as an addition to their portfolio, there is good news ahead. With the Fed’s decision to keep the federal funds rate at lows of at or near 0% through at least 2014, the next year or two should continue to offer nice returns for REIT investors.
One of my favorites in this particular sector is American Capital Agency (AGNC). In this article I will discuss why – in spite of the fact that it possesses a high percentage of non-agency backed securities in its portfolio – this company could be a good choice for those who seek both income and growth from their REIT shares.
A Closer Look at American Capital Agency
American Capital is a REIT that invests primarily in collateralized mortgage obligations as well as in residential mortgage pass-throughs. The firm funds its investments mainly via short-term borrowed capital that is structured as repurchase agreements.
The company is a strong contender in the REIT segment. In the first quarter of 2012, the company reported a net income of over $640 million. With earnings per share of nearly 6.7 and a dividend yield in excess of 15%, American Capital has a good strong foundation.To continue reading, click here.