Mortgage real estate investment trusts (REITs) are well-known for having some of the best dividends in the market, but not all of them are created equal. Mortgage REIT management teams have many different strategies in terms of leverage, portfolio assets, hedging strategies, buybacks, dividend payments and more.
Two very popular mortgage REITs are American Capital Agency Corp (NASDAQ:AGNC) and ARMOUR Residential REIT (NYSE:ARR). Both pay double-digit dividends and use leverage ratios of about eight-to-one in order to supercharge profits. Additionally, virtually all of their portfolio holdings are backed by Fannie Mae, Freddie Mac, or Ginnie Mae.
Despite all of these similarities, these are very different companies. Let's take a look at how these two mortgage REITs compare in several key areas.