8.76% Dividend Yield Whoops Brothers 8.61%

Ready, fight!

Maybe not so much a fight, but comparing…

We will be comparing preferred shares from Resource Capital Corporation (NYSE: RSO) to the preferred shares of CYS Investments (NYSE: CYS) and AGNC Investment Corp. (Nasdaq: AGNC).
Curious about the companies?
RSO is using commercial real estate loans and they have a fairly substantial amount of credit risk. Further, they trade materially below book value because their operating expenses are too high and therefore they are unlikely to put themselves in a position where it would be beneficial for common shareholders if RSO were to issue additional equity. Therefore, the ratio of common equity to preferred equity is less likely to get a huge boost. Even a minor boost would be pretty favorable for them. Despite the poor common equity to preferred equity ratio, RSO still has a reasonable investment opportunity in RSO-C.
AGNC and CYS are both mostly comprised of fixed rate agency mortgages. This gives both companies dramatically less credit risk.
Earlier this week
I compared AG Mortgage Investment Trust's (NYSE: MITT) preferred shares earlier this week because MITT-A was much better than its sister preferred share MITT-B. The prices are still materially further apart than they should be.
Broker and preferred share tickers
Almost every major broker in the United States has their own method for referring to preferred shares. I put together a spreadsheet that cross-references... Read more

Older articles featuring RSO: