Cheap Dividend Stocks #5: MFA Financial (MFA)
Share Price as of 4/4: $7.78
YTD Stock Performance: 10%
Dividend Yield: 10.4%
MFA Financial (MFA) is another REIT, but in this case, it doesn’t own any actual property — only the paper behind it, investing in mortgage-backed securities ultimately secured by single-family residences.
Stocks playing in some of the same type of assets that were a key to the housing bubble might scream “danger,” but MFA isn’t unmindful of the risks. More than half of its portfolio is guaranteed by Freddie Mac, Fannie Mae or Ginnie Mae. It also holds about a third of its portfolio in fixed-rate mortgage-backed securities. Along with a decent housing market, that helps mitigate risk.
As long as the housing market continues to improve, there should be upside for MFA stock, as well as its dividend.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.