Mortgages, or mortgage-backed securities, are investments that pool investors’ money and lend it to homebuyers and property developers. The returns on these loans are then paid back to the investors and additional interest. If you want to invest in real estate but don’t have enough cash, you might consider supporting a mortgage REIT. A REIT is a company that owns real estate and has listed its shares on the stock market. As an investor, you can buy shares in these trusts without owning or managing any properties yourself. Here we look at the four best mortgage REIT stocks to buy right now…
MFA Financial (MFA)
MFA Financial Inc. is a mortgage REIT that invests in agency mortgage-backed securities (MBSs) and U.S. mortgage loans originated by government-sponsored enterprises (GSEs). It has a trailing annual dividend yield of 6.30%. MFA Financial’s total equity stands at $2.56 billion and has a market cap of $15.05 billion. Its shares are currently trading at $30.45, down from a 52-week high of $33.68.MFA Financial has robust financial health and an A+ credit rating. In addition, it has a low but acceptable level of debt, a substantial amount of cash, and a decent amount of equity relative to its total assets.
PennyMac Mortgage Investment Trust (PMT)
PennyMac Mortgage Investment Trust is a mortgage REIT that invests in U.S. residential mortgage-backed securities (RMBSs), commercial mortgage loans, and U.S. agency RMBSs. It has a trailing annual dividend yield of 6.70%. PennyMac Mortgage Investment Trust’s total equity stands at $2.79 billion and has a market cap of $20.17 billion. Its shares are currently trading at $19.52, down from a 52-week high of $21.81.PennyMac Mortgage Investment Trust has robust financial health and an A+ credit rating. However, it has a large amount of debt, cash, and equity relative to its total assets.
KKR Real Estate Finance Trust (KREF)
KKR Real Estate Finance Trust is a mortgage REIT that invests in commercial mortgage loans, residential mortgage loans, and equity investments in real estate entities. It has a trailing annual dividend yield of 6.90%. KKR Real Estate Finance Trust’s total equity stands at $2.64 billion and has a market cap of $23.46 billion. Its shares are currently trading at $22.27, down from a 52-week high of $25.39.KKR Real Estate Finance Trust has robust financial health and an A+ credit rating. It has a moderate amount of debt, a large amount of cash, and a considerable amount of equity relative to its total assets.
New York Mortgage Trust (NYMT)
New York Mortgage Trust is a mortgage REIT that invests in residential mortgage loans, commercial mortgage loans, and U.S. agency RMBSs. It has a trailing annual dividend yield of 6.30%. New York Mortgage Trust’s total equity stands at $2.66 billion, with a market cap of $23.02 billion. Its shares are currently trading at $21.93, down from a 52-week high of $23.87.New York Mortgage Trust has robust financial health and an A+ credit rating. In addition, it has a low amount of debt, a large amount of cash, and a considerable amount of equity relative to its total assets.
Conclusion
As we have seen, investing in mortgage REITs provides an attractive combination of income with a low-risk potential for capital gains. Moreover, these trusts are very liquid, meaning you can buy and sell them quickly and easily. This makes them an attractive option for investors seeking a steady flow of income from their portfolios. If you want to invest in real estate but don’t have enough cash, then mortgage REITs are one of the best ways to go.
