In this video, Foolish financial analyst Matt Koppenhaffer gives a word of caution regarding mortgage REITs. To be sure, the double digit dividends paid by these firms is appealing. However, many mortgage REITs invest in repurchase financing agreements that generate minimal returns. Even though these REITs are not heavily leveraged relative to banks, Matt believes many investors may be underestimating the risk/reward ratio these REITs possess.
A word of caution to REIT investors about some of the high dividend yield mortgage REITs today.
About the Author
Matt Koppenheffer is the former Head of the Coverage Team at The Motley Fool. He was a full-time Motley Fool employee from 2012-2025 and is a former advisor and analyst for multiple Motley Fool services. Matt's articles and analysis have been published around the world and his views have been cited in worldwide publications from the Financial Times and The New York Times to the Toronto Star and Germany's Focus Money. He has appeared to offer analysis on a variety of outlets including CNBC and NPR. Matt is the co-author of The Astonishing Collapse of MF Global as well as the creator and former co-host of The Motley Fool's Industry Focus podcast.
