Another Mortgage REIT Lowers Dividend

Capstead Mortgage (NYSE:CMO) has lowered their dividend from 19 cents per share to 16 cents per share for a current yield of 7.26%-one of the lower yielding mREITs.

CMO invests primarily in agency adjustable rate mortgages and the last earnings release showed earnings of 19 cents.  It would appear that the company is expecting somewhat reduced earnings in the current quarter.  The company noted in their last earnings release that borrowing costs were rising with Fed Funds rate increases, but as we review their spreads (yield received minus cost of borrowings) they are maintaining .6% area spread partially through hedging interest rates.

CMO has 1 preferred issue outstanding which is a 7.50% coupon which is trading right around $25.00

2 thoughts on “Another Mortgage REIT Lowers Dividend”

  1. 3mo US$ LIBOR has been marching higher at a very rapid pace since Nov ’17. w more loans and lines of credit tied to LIBOR this bears watching too. The rate was around 1.40 in Nov and closed at 2.18 yesterday 3/14.. wow! Bea

Leave a Reply

Your email address will not be published.