Please ensure Javascript is enabled for purposes of website accessibility

Invesco Mortgage Capital Raises Dividend; Yield Is 9.1%

By Eric Volkman - Mar 26, 2021 at 9:17PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Yet again, the mREIT lifts its payout.

For the fourth quarter in a row, Invesco Mortgage Capital (IVR -1.72%) is raising its quarterly common stock dividend. The mortgage real estate investment trust (mREIT) announced Friday that it's adding $0.01, or 11%, to its proceeding payout for a $0.09 per share distribution. This is to be paid April 27 to investors of record as of April 9, and it yields 9.1% at the most recent closing stock price.

This series of dividend raises, however, comes in the wake of a significant cut. With its business threatened by the coronavirus pandemic, last year Invesco had to cope with a sudden flood of margin calls from its lenders.

Home with a HOUSE FOR SALE sign in the front yard.

Image source: Getty Images.

It entered forbearance with those creditors, sold off assets, and emerged as a leaner and more focused company. It also has a comparably smaller risk profile, as it concentrates on government-backed mortgage securities (they are considered to be far more solid investments due to the involvement of the Feds).

But those tough times saw the dividend get eviscerated in the middle of 2020, from $0.50 per share to a mere $0.02. Invesco has given no indication of when, or even if, it might return the payout to its pre-pandemic levels.

Meanwhile, the housing market has been thriving for months, despite fears early in the outbreak that it might collapse. As many people have been shut inside, they are placing a greater emphasis on home and comfort. Particularly in the major housing markets, this has driven up demand and, therefore, prices.

On Friday, Invesco's shares traded flat on a day when the S&P 500 index rose by nearly 1.7%.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Invesco Mortgage Capital Inc. Stock Quote
Invesco Mortgage Capital Inc.
$1.71 (-1.72%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.