Western Asset Mortgage ($NYSE:WMC) Capital Corporation (WMC) has announced a 28.6% cut to its quarterly dividend, reducing it to $0.10 per share. This is the second cut in the past two months as the mortgage REIT is feeling the pressure of the coronavirus pandemic. WMC is an internally-managed mortgage REIT that invests in, finances, and manages a diversified portfolio of residential and commercial mortgage-backed securities and other related investments.
The company primarily earns income through the acquisition and securitization of mortgage loans that are sold or retained for investment. The dividend cut is a measure to preserve its capital and ensure its financial stability as it navigates through the current economic downturn.
Dividends – WMC dividend
This decrease follows the last three years of annual dividends per share, which have been 1.45 USD, 0.88 USD, and 0.24 USD respectively. With dividend yields from 2021 to 2023 of 15.76%, 12.85%, and 7.79%, respectively, the average dividend yield is 12.13%. This makes WESTERN ASSET MORTGAGE CAPITAL a very attractive option for investors looking for a steady stream of income.
About the Company
Ownership (Institutional/ Fund Holdings)
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Cash Flow Snapshot
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Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for WMC. More…
Balance Sheet (Yearly/ Quarterly)
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Key Ratios Snapshot
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GoodWhale’s analysis of WESTERN ASSET MORTGAGE CAPITAL’s fundamentals reveals that the company has a low health score of 0/10 with regard to its cashflows and debt, suggesting that the company is less likely to be able to pay off debt and fund future operations. On the other hand, WESTERN ASSET MORTGAGE CAPITAL is strong in dividend, profitability and weak in asset, growth. Based on these observations, GoodWhale has classified WESTERN ASSET MORTGAGE CAPITAL as ‘cow’, a type of company with the track record of paying out consistent and sustainable dividends. As such, WESTERN ASSET MORTGAGE CAPITAL may be of interest to investors looking for dividend-paying stocks that can provide consistent returns over time. However, investors should note that the company is relatively weak in terms of its cashflow and debt, which may affect its ability to meet its dividend payments in the future. More…
Star Chart Analysis
Mortgage REITs are one of the most intriguing investments in the market today. They offer high dividends, often in the double digits, and the potential for high capital appreciation.
However, with this potential comes risk, and investors must carefully consider which mortgage REIT is right for them. One of the most popular mortgage REITs is Western Asset Mortgage Capital Corp (WMC), which has a market capitalization of over $3 billion. WMC has a strong history of dividend growth and has outperformed its competitors, such as Cherry Hill Mortgage Investment Corp (CHMI), AG Mortgage Investment Trust Inc (MFA), and MFA Financial Inc (MFA), over the past five years.
However, CHMI, AG, and MFA have all been catching up to WMC in recent years, and the competition between these four mortgage REITs is heating up. All four companies are well-positioned to benefit from the ongoing recovery in the housing market, but only time will tell which one will come out on top.
– Cherry Hill Mortgage Investment Corp ($NYSE:CHMI)
Cherry Hill Mortgage Investment Corporation is a real estate finance company that focuses on originating, acquiring, and servicing residential mortgage loans. The company’s loans are primarily first-mortgage loans secured by properties located in the United States. Cherry Hill Mortgage Investment Corporation is headquartered in Horsham, Pennsylvania.
– AG Mortgage Investment Trust Inc ($NYSE:MITT)
MFA Financial, Inc., a real estate investment trust, acquires, finances, and manages residential mortgage assets in the United States. The company operates through three segments: Agency Investments, Non-Agency Investments, and Credit Tenant Lease.
– MFA Financial Inc ($NYSE:MFA)
MFA Financial Inc. is a real estate investment trust that primarily acquires, finances, and manages residential mortgage assets in the United States. As of December 31, 2020, the company’s investment portfolio included approximately $15.4 billion of residential mortgage assets, including $9.7 billion of non-performing loans and real estate owned properties. The company was founded in 1997 and is headquartered in New York, New York.
Western Asset Mortgage Capital Corporation (WMC) is a real estate investment trust that specializes in investing in and managing Agency and Non-Agency residential mortgage-backed securities, other mortgage-related investments and other asset classes globally. This reflects the current market environment, where low interest rates and competition are reducing income from investments. From an investment perspective, WMC is attractive due to its portfolio of solid investments with low volatility and strong liquidity. Going forward, investors should closely monitor the performance of the company and any changes in its dividend policy.