2 Hidden Threats to Your Huge Dividends

Anwar Elgonemy is the director of acquisitions for Equinox Hospitality Group, a San Francisco-based private-equity firm that focuses on the lodging sector and author of the new book Skin in the Game: The Past, Present, and Future of Real Estate Investments in America. In this audio interview he analyzes the state of mortgage REITs right now and identifies two factors threatening the high dividends being paid out to investors. He also digs into the numbers and shares why he believes mortgage REITs like Capstead Mortgage, Chimera Investment, and PennyMac Mortgage are undervalued.

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Chris Hill owns no shares of any of the companies mentioned. The Motley Fool owns shares of Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Annaly Capital Management. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (7) | Recommend This Article (28)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 20, 2012, at 8:58 PM, Latinus wrote:

    I hate it when the main theme is in the video.

    I much prefer to read text.

    Isn't the video much more expensive than simple intelligible text?

  • Report this Comment On April 20, 2012, at 11:39 PM, IvanesivecW wrote:

    This is a great interview by Chris Hill. Author Anwar Elgonemy is refreshingly objective, articulate, and obviously quite brilliant. I bought his book Skin in the Game from Amazon after listening to his comments. Thank you Motley Fool for bringing on such excellent real estate finance authors!

  • Report this Comment On April 20, 2012, at 11:47 PM, LuizDL wrote:

    Loved the interview. Elgonemy clearly knows what he's talking about. I just finished reading Skin in the Game. It's an excellent book that has to be read by every real estate investor, politician and financial professional in America.

  • Report this Comment On April 21, 2012, at 1:21 AM, Odysseus221 wrote:

    The spread of short term to long term always fluctuates. Homeownership decline has little effect unless the whole concept goes belly up. In effect, the mortgage reits make exactly what the spread is

    between long and short term rates, however, the kicker is the leverage. This has no real danger of

    decline. If anything, in the long run, long term rates should increase. Short term will close the gap only as the Fed acts to create economic contraction.

  • Report this Comment On April 21, 2012, at 4:08 AM, sobani wrote:

    Why is he comparing these mREITs based on their share price? He basically says that Chimera is cheap because their share price is just $2.80, which is below the average of $15.

  • Report this Comment On April 21, 2012, at 9:42 AM, IvanesivecW wrote:

    Hi Sobani,

    He's focusing on the PEG Ratio, not the stock price of Chimera. He just mentions that Chimera's stock price is low as an fyi.

  • Report this Comment On April 21, 2012, at 11:26 PM, HowardFriedrich wrote:

    Awesome interview with Anwar Elgonemy. I like his unbiased approach to real estate investing. Pls. have more interviews with him. He's great!

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