Can This Risky Business Provide a Safe and Growing Yield of 8.7%?

Most income investors are highly risk averse. That’s why big companies in defensive industries such as Procter & Gamble Co (NYSE:PG) and Johnson & Johnson (NYSE:JNJ) have been highly sought after. The thing is, though, because investors have been chasing these well-known dividend stocks, their share prices have already been bid up. And since a company’s dividend yield is calculated by dividing its annual payout by the stock price, surging share prices have translated to lower yields for these companies. So what if an investor wants to find a high-yield stock? Well, that often means looking into the more volatile areas of the stock market. One of these sectors is made up of mortgage real estate investment trusts (REITs).

Today, I’m looking at Great Ajax Corp (NYSE:AJX), a mortgage REIT headquartered in Beaverton, Oregon. The company invests primarily in mortgage loans secured by single-family properties. Compared to other players in the business, Great Ajax is a relatively new name, having completed its initial public offering (IPO) in February 2015. If you have paid any attention to the last financial crisis, you would know that mortgages aren’t always the safest investments. In fact, the large amounts of mortgage delinquencies and foreclosures after the burst of the housing bubble in 2007 were considered a major cause of the Great Recession.

Source: Income Investors

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