It's safe to say that fear is dominating the mortgage REIT sector, with shares of Annaly Capital Management (NYSE: NLY ) and American Capital Agency (NASDAQ: AGNC ) down by double digits since the beginning of the year. To a certain extent, the fear is warranted given what's happened to these companies' book values; both are off by 20% year to date. At the same time, there's an argument that these companies' current discounts to book value are excessively pessimistic -- shares of both are trading for 0.84 times book value. If this is the case, then investors may want to consider establishing a position.
In the video below, Motley Fool contributor John Maxfield delves into this question, particularly as it relates to Annaly Capital Management. As John explains, even though he's not a big fan of the mREIT's management team, it's hard to deny that the current sentiment around these companies as well as their valuations are otherwise strong "buy" signals.
If you're looking for safer dividend stocks...
Our top analysts have identified the absolute best of the best when it comes to rock-solid dividend stocks, drawing up a list of nine that fit the bill. To discover the identities of these companies before the rest of the market catches on, you can download this valuable free report by simply clicking here now.