Cannibalizing REITs for a Bigger Pay Day

Wayne Ellis

[house in a shopping cart]

Cannibalizing REITs for a Bigger Pay Day (SeekingAlpha)

American Capital Agency (AGNC) is a real estate investment trust (REIT), or, more precisely, a mortgage real estate investment trust (MREIT) that invests in mortgages backed by government-sponsored enterprises like Fannie Mae or Freddie Mac. In the company’s most recent earnings conference call, CEO Gary Kain announced that the company had begun purchasing common stock of fellow MREITs at a significant discount to book value. While the move sparked controversy on the call, and within the REIT community, it could ultimately pay off handsomely for AGNC investors who currently enjoy an 11.9% dividend yield.

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