# Invesco Mortgage Capital (IVR)



## Chigu (Aug 6, 2009)

This stock is on the NYSE. I am curious on how this stock can give out 20+% dividend yields? Looks unsustainable to me. 

Currently priced at : $16.12
Dividends last 12 months: $3.74

I doubt you will get any capital appreciation on this stock, but why not just buy it and take the 15 - 23% yield? 

Thoughts? 

Here is their dividend payout history:

Sep 15, 2011	0.80 Dividend
Jun 15, 2011	0.97 Dividend
Mar 18, 2011	1.00 Dividend
Dec 29, 2010	0.97 Dividend
Sep 28, 2010	1.00 Dividend
Jun 28, 2010	0.74 Dividend
Mar 29, 2010	0.78 Dividend
Dec 29, 2009	1.05 Dividend
Oct 21, 2009	0.61 Dividend


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## CanadianCapitalist (Mar 31, 2009)

I don't follow this name but sound like it is a mortgage REIT. For any investment, all you should care about are total returns. A 20% dividend yield is cold comfort if the security goes to zero.

Some mortgage REITs crashed and burned in 2008-09. 

http://en.wikipedia.org/wiki/Thornburg_Mortgage


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## Chigu (Aug 6, 2009)

Yes it is a mortgage REIT. In this market it is tough to see capital appreciation, because the market does not really seem to look at the fundamentals of the company. That's why I was going to stick some cash in high yielding income trusts in a TFSA. The 52 week high and low seem to make this a fairly good deal.


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## andrewf (Mar 1, 2010)

Firms like this seem like Russian roulette. They pay 20% indefinitely until some event causes dislocation and they go straight to zero without touching the sides. On the other hand, there are some US mortgage REITs that hold government-backed mortgages. That makes them seem pretty compelling to me. I still haven't invested as I just don't trust them and I generally don't invest in individual names.


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## Dopplegangerr (Sep 3, 2011)

I bought into IVR at an average of $14.21 and its trading at $17.56 now. I enjoy the very nice dividend but I am thinking about just selling it off and taking the profits. The honest truth is I know so little about the company and its tough to get good news on them. But I did read recently that IVR along with a couple other REITs will be removed from the Russell 2000 Index in June of this year and could drop the stock price considerably. I can always buy in again afterwards if it seems a good idea. Anyone else have any other thoughts here?


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## buhhy (Nov 23, 2011)

I bought some AGNC a few months ago, planning to hold until mid-late 2013, depending on the economic situation. I figure the current low-interest climate, which is likely to continue for a while, should mean that mREITs will perform normally for a while.


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## andrewf (Mar 1, 2010)

I noticed that they reduced the yield to ~15%.


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## PMREdmonton (Apr 6, 2009)

If you're going to buy into this space you should probably buy only the agency REITS where the government backs the mortgage security in case the borrower defaults.

The second thing you have to beware of is they make their money by borrowing money at short-term rates and then using leverage to buy long-term US treasuries. They make their money off the difference in the interest rates. The big area where a mortgage REIT can go down is a rising rate environment where they take capital losses on their bond portfolio which they have levered up. Anyone can get you a great return now when rates are low but the question is whether they are managing risk adequately which may not be obvious to the casual observer until it is too late.

I do invest in this realm in my RRSP. However, I will only buy NLY as they have been in this game since 1997 and have proven their ability to survive and pay dividends in many different environments. They survived the dotcom bust, the 2001-2 recession and the Great Depression and maintained at least a 5% dividend through it all. They continue to have a beta somewhere around 0.3 or so. They recently have been careful not to venture too far down the yield curve and have been backing off of the leverage to some extent and have been paying out a slightly smaller divy as a result. However, I think they will have already anticipated and reacted to the pending rise in interest rates before others do and thus will ensure you won't get hit too much in 2014 when the rates start to go up.

AGNC have been very good for awhile now but they aren't as seasoned as NLY and you always wonder if they will be too aggressive at exactly the wrong time.


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## Dopplegangerr (Sep 3, 2011)

*"Our portfolio consists of:

Residential mortgage-backed securities for which a U.S. Government agency or a federally chartered corporation guarantees payment of principal and interest - commonly referred to as Agency RMBS;
Residential mortgage-backed securities that are not issued or guaranteed by a U.S. government agency - commonly referred to as Non-agency RMBS;
Commercial mortgage-backed securities - commonly referred to as CMBS; and
Residential and commercial mortgage loans."*

I took that from the company website. I keep reading about (or listening to) companies having "toxic debt" on there balance sheets and it scares me but I dont really know what it is or how I am supposed to identify it. I watch and try and learn from the Khan Academy website and this has showed me a lot but he always talks about asset classes that have such high pay out ratio. And I always wondered if this is it being that IVR can have a dividend of 18% or so.
Can anyone help clarify?


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## Dopplegangerr (Sep 3, 2011)

OMFG I just sold out yesterday and it is the only stock on my list that went up (of about 25 I am watching) it crested $18 dollars for the first time in like 6 months after I had been watching it do nothing for months and months. Sorry not getting emotional, know you need to be level headed and all just surprised is all


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