Real estate investment trusts have rightfully earned their place in income investors' portfolios: REITs offer investors a combination of high cash flows, dividend continuity, and diversification benefits if REIT investments are added to traditional equity or bond portfolios.

New Residential Investment Corp. (NYSE:NRZ) is such a REIT. With a focus on residential real estate assets in the United States, the investment company has carved a niche out for itself and allows investors to gain access to investment opportunities in mortgage servicing rights, or MSRs, along with non-performing residential loans and securities and other related investments.
New Residential benefits from healthy core earnings growth and offers investors an attractive 11.1% dividend yield (per data from S&P Capital IQ).

Important REIT differences and portfolio composition
When it comes to investing in residential real estate assets, there are a lot of differences to be found among REITs. Mortgage REITs, for instance, invest in residential mortgage-backed securities. These investment vehicles often exhibit double-dividend yields thanks to their leveraged business models, but they can be somewhat risky -- especially as far as dividend safety is concerned.

In addition to mortgage REITs, there are traditional real estate investment trusts that invest in a portfolio of real estate assets such as apartment buildings, offices, or shopping malls, from which they generate rental income.
A third category of REITs includes companies such as New Residential that invest in mortgage servicing rights, which give a servicer the right to "service" mortgages by collecting payments and forwarding interest and principal cash flows to the lender, and in residential loans, which are often of a distressed nature.
New Residential predominantly focuses on mortgage servicing rights, which presents an extraordinary investment opportunity for the REIT. Banks are more than willing to outsource administrative duties relating to mortgage servicing and sell MSRs to special investment companies such as New Residential, which target a net yield of 15%-20% from these investments.

Source: New Residential third-quarter earnings supplement.

Healthy core earnings growth
REITs are notoriously difficult to analyze, because of their vastly complex investment portfolios. However, New Residential's core earnings trend looks promising.
From Q3 2013 to Q3 2014, New Residential's core earnings have increased from $38 million to $63 million, reflecting juicy 65% year-over-year growth.

Source: New Residential third-quarter earnings supplement.

It should be noted, though, that New Residential is a fairly young independent entity. The REIT was spun off from Newcastle Investment Corporation (NYSE:NCT) in May 2013 and therefore looks back on a short history of earnings and shareholder remuneration.
Core earnings lead to stable book value growth
New Residential's expertise in managing its investment portfolio also shows in its year-over-year book value growth, which remains a key metric for the evaluation of REIT structures.

Source: New Residential third-quarter earnings supplement

New Residential's book value grew steadily over the lpast four quarters, which is a good record to look back on for this young company. Strong core earnings and consistent book value growth also led New Residential to pay two special dividends of $0.15 per share each in January and July 2014, which came in addition to its regular dividend of $0.35 per share.
The Foolish bottom line
New Residential is off to a convincing start as an independent company. MSRs, which mortgage originators are happy to sell, are an attractive investment opportunity, and New Residential focuses on MSRs to deliver stable fee income going forward.
Growing core earnings and solid book value growth rates suggest that New Residential knows its business inside and out. At a current yield of 11.1%, the REIT is an interesting alternative to classic high-yielding mortgage REITs.