NRZ - New Residential Investment: An Inflation Proof High-Yield Play

• Shares of mortgage portfolio manager REIT New Residential Investment Corp. are trading at a discount to book value, which should further rise as mortgage rates surge above 5%.
• The value of (and earnings from) its mortgage servicing operation should outpace any loss of business from its origination subsidiaries, increasing both book value and core earnings.
• With the payout rate on its 9.5% dividend on 60% of core earnings in 4Q21 and likely to improve in 2022, this name merited further investigation.
• A full investment analysis and recommendation follow in the paragraphs below.

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