Boston, MA 07/08/2013 (wallstreetpr) – Externally managed mortgage real estate investment trust (REIT) Hatteras Financial Corp (NYSE:HTS) primarily invests in single household residential-mortgage, pass through securities that are either issued or backed by guarantee of the US government agencies, like Ginnie Mae, (Government National Mortgage Association) or government sponsored entities like Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation).
Dividend yield is one factor that keeps the stock attractive despite continually declining share prices. Investors view dividends as the most practicable yardstick to weigh investing decision particularly because historically, dividend yield has constituted a sizeable portion of stock market’s overall return.
Based on its dividend for the recent quarter the company has an annualized dividend of $2.8 a share. The company announced its Q2, 2013 dividend of $0.7 a share, on June 18th 2013. Earlier this month on Friday, July 5th, 2013 Hatteras Financial Corp (NYSE:HTS) crossed the 13.5% dividend yield mark while it traded at as low as $22.81 per share. The company is a member of the Russell 3000 index whose, ETF was trading at $77.79 that day, almost 0.6% below their price in 12 years. Keeping in view that fact, a yield above 12% would give a good enough reason to BUY if the trend in the dividends line is sustained over longer run.
Conversely, hedge funds have been showing a lack of interest in the stock during the last few months. A certain tier among the money managers like Renaissance Technologies and Whitebox Advisers sold their holdings off during the Q1 of 2013.
Although the company’s prime business line consists of mortgage loans having short maturities; it also invests in fixed rate as well as adjustable rate agency securities whose principal repayment and accrued interest is guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac. The company’s adviser is Atlantic Advisor LLC.
