By
Anand Chokkavelu, CFA
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More Articles
July 25, 2011
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If you're aiming to "buy low and sell high," then it makes infinite sense to start your search with bargain-priced stocks. Regularly reviewing a list of stocks trading near their 52-week lows can be a great first step.
Here, I'll try to do the initial legwork for you. To prevent us from being inundated with scores of disparate companies, I'll conduct my search by industry. This will allow us to make some initial comparisons among semi-related companies.
Today, let's look at mortgage REITs. Below, are the nine high-yielding mortgage REITs that are within 20% of their 52-week lows and above $1 billion in market cap.
|
Company
|
Recent Price
|
52-Week Low
|
52-Week High
|
Price-to-Book
|
Dividend Yield
|
| Annaly Capital (NYSE: NLY ) |
$18.02 |
$16.73 |
$18.79 |
1.1 |
14.5% |
| American Capital Agency (Nasdaq: AGNC ) |
$29.68 |
$26.05 |
$30.76 |
1.1 |
19% |
| Chimera (NYSE: CIM ) |
$3.33 |
$3.09 |
$4.36 |
1.0 |
15.8% |
| MFA Financial (NYSE: MFA ) |
$7.82 |
$7.10 |
$8.64 |
1.0 |
12.8% |
| Hatteras Financial (NYSE: HTS ) |
$28.90 |
$27.12 |
$31.98 |
1.1 |
13.9% |
| Invesco Mortgage Capital (NYSE: IVR ) |
$21.20 |
$20.09 |
$24.07 |
1.0 |
18.5% |
| Starwood Property Trust (NYSE: STWD ) |
$20.39 |
$17.24 |
$23.67 |
1.1 |
8.6% |
| Redwood Trust (NYSE: RWT ) |
$15.06 |
$13.49 |
$17.16 |
1.1 |
6.7% |
| Cypress Sharpridge (NYSE: CYS ) |
$13.06 |
$11.89 |
$14.25 |
1.1 |
18.6% |
Sources: Capital IQ, a division of Standard & Poor's, and Yahoo! Finance.
You'll see that all of the REITs above sport dividend yields above 5%. Since REITs are required to pay at least 90% of their taxable income as dividends and since it's been a good time for mortgage REIT profitability, these big yields aren't surprising.
Although each of these REITs is close to its 52-week low, most of them aren't too far away from their 52-week highs either. Moreover, each trades fairly close to book value. Don't be lulled by the lack of volatility, though. If short-term interest rates rise rapidly, we could certainly see big price decreases that would blunt the returns of the large dividends. Read my Foolish colleague Jim Royal's take on the latest in the industry here.
If you are interested in continuing your research on a stock mentioned here, add it to My Watchlist to stay abreast of all of our Foolish analysis.
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