NRZ - Is New Residential Investment Corp. a Buy?
New Residential Investment (NYSE: NRZ) is a real estate investment trust (REIT), which means that it is specifically structured to pass income through to investors. Historically speaking, it's done a pretty good job of that, too, since it became a stand-alone entity via a mid-2013 spinoff. Only something just took place that will make dividend investors wince. Here's what happened and how it changes the buy, sell, hold equation.
The first thing that investors have to understand about New Residential Investment is that it is not a typical property-owning real estate investment trust. The company owns a portfolio of mortgages and mortgage-related securities and businesses. This is a very different business model from owning and operating a collection of physical assets, which is kind of a boring business that's fairly simple to understand. The thing is, New Residential is even more complex than many mortgage REITs, which generally focus on just owning a portfolio of mortgages.
Image source: Getty Images.