Dallas, Texas 10/14/2013 (Financialstrend) – MFA Financial, Inc. (NYSE:MFA) and fund managers of other real estate investment trust companies would be poring through the minutes of the meeting which was released by Federal Reserve last week. The minutes were for the September 18 meeting of Federal Open Market Committee which took the “no taper for now” decision. REIT firms would be hoping to decipher the thinking behind FED committee’s decision not to reduce the stimulus package. They also would be hoping to anticipate how much more time they have before Fed finally bites the bullet and does ring down the stimulus to the financial markets.
Based on the minutes, analysts are coming round to believe that REITs have been offered a temporary reprieve by Fed. Market watchers believe firms like MFA and Annaly to name a few had ended up being over-leveraged on the back of continued stimulus backing by the Government. Over time, the earnings of these firms got linked to the artificially maintained low interest regime. Based on the released minutes, many analyst firms have pushed out their predicted date of stimulus package withdrawal to first half of 2014.
MFA Financial, Inc. invests into residential mortgage-backed securities (MBS) and Non-Agency MBS. It has paid out $0.88 per share indicating a 12.12% forward dividend yield over the past 12 months. The dividend payout plan of MFA compares very positively in comparison to payouts by other REIT’s. The common stock of MFA consists of 361 million shares outstanding of which 78% is held by institutional investors. Over the past 30 days, stock of MFA has rallied around from the fall it had sustained post Fed decision. It is up 2.4% over the past month. As of close of business on October 11, the share price had settled at $7.26 per share up 0.14% from its previous day close.