1. Arbor Realty Trust, Inc. (NYSE:ABR)
Dividend Yield as of July 16: 12.78%
Arbor Realty Trust, Inc. (NYSE:ABR) is a New York-based real estate investment trust company that invests in a diversified portfolio of finance assets in the multifamily and commercial real estate markets. On July 12, the stock experienced a sharp decline of 17% following reports that federal prosecutors and the FBI are investigating the commercial mortgage REIT. The investigation focuses on lending practices and the accuracy of claims regarding the performance of its loan portfolio. In response to the inquiries, the company stated that it regularly cooperates with regulatory investigations and maintains confidence in its adherence to proper conduct.
That said, analysts see an opportunity in Arbor Realty Trust, Inc. (NYSE:ABR) due to its highly secured dividend, supported by a near-impeccable payment history and strong liquidity position. In addition, the company’s extensive structured loan portfolio stands out as one of the largest among mortgage real estate investment trusts (mREITs), reaching a valuation of $12.25 billion by the close of its fiscal first quarter in 2024. During this period, the company originated $255.9 million in new structured loans, although it experienced a runoff of $640 million. This runoff has bolstered its balance sheet liquidity, resulting in cash and equivalents totaling $908 million by the end of the first quarter, marking its highest level in more than ten years.
Arbor Realty Trust, Inc. (NYSE:ABR) is not some newbie in the industry, in fact, it has been around since 2003 and has weathered significant economic challenges, including the Great Financial Crisis, the 2020 pandemic, and the post-inflation surge and Fed rate hikes in 2023. The company pays a quarterly dividend of $0.43 per share and has a dividend yield of 12.78%, as of July 16. It has been rewarding shareholders with growing dividends for the past 11 years, which makes ABR one of the best dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in Arbor Realty Trust, Inc. (NYSE:ABR) jumped to 24 in Q1 2024, from 17 in the previous quarter. These stakes have a consolidated value of over $96.7 million. Among these hedge funds, Omega Advisors was the company’s largest stakeholder in Q1.
While we acknowledge the potential of ABR as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than ABR but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
