Making Sense of mREITs Post-Dividend Cuts

Mortgage REITs are fighting a battle on two fronts. First, mortgage REITs want to see stablization in long-term rates. Secondly, they want to see short-term rates stay at their current lows. Investors should hope for no change in the Fed’s asset purchases, as well as no changes in the Federal funds rate. While the focus has been centered on long-term rates, short-term rates are just as important for mREITs to earn their interest rate spread.

The odds of new tapering before 2014 look unlikely given that Bernanke won’t want to shake the markets before a crucial fourth-quarter holiday spending binge. That’s good for mortgage REITs and their dividend sustainability.

The article Making Sense of mREITs Post-Dividend Cuts originally appeared on Fool.com.

Fool contributor Jordan Wathen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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