MITT - AG Mortgage: Double-Digit Yield From Fixed-Rate Preferred Shares With Reasonable Risk
2024-07-03 11:20:49 ET
Summary
- AG Mortgage Investment Trust is a mREIT with a focus on non-agency mortgage loans.
- The preferred dividends have been well covered by net income both in Q1 2024 and over the past year.
- Coverage by market capitalization is less robust if you take preferred shares at par value, but sufficient if you account for the discount the three preferred issues trade at.
- The series B preferred shares offer a 10.3% current yield and 29% upside potential to par value.
- Underlying dynamics in the non-agency securities are mixed, with decreasing loan-to-value ratios but increasing delinquency rates.
Introduction
AG Mortgage Investment Trust's Series B 8% fixed-rate preferred shares ( MITT.PR.B ) have outperformed the iShares Preferred and Income Securities ETF ( PFF ) so far in 2024, delivering a high single-digit total return against the 4% increase in the benchmark ETF:
AG Mortgage Series B preferred shares vs PFF in 2024 (Seeking Alpha)
