3 Mortgage REITs Still At Deep Discounts

Price to trailing book value ratios remain very low, except for a few REITs. You’ll want to pick your purchases carefully. We’ve included tables to reflect the discounts to trailing book value. Thanks to reader feedback, those tables are organized better than before. We’re including a few recent ratings along with the index cards for those REITs. The estimated book value within the index cards uses current (as of this week) estimates.

We don’t consider Arlington Asset Investment Corp. (AI) a great REIT by any stretch of the imagination. Despite internal management, it's performed poorly over long periods. However, the discount to book became exceptionally large. Annaly Capital Management, Inc. (NLY) is the largest of the mortgage REITs and has a very diversified portfolio. It still has substantial upside thanks to a price-to-NAV ratio at .79 (using recent estimates). Cigna Corporation (CI) was consistently treated as a best-of-breed mortgage REIT for years. Investors loved the internal management combined with its use of securitizations for locking in its funding

Source: Seeking Alpha

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