It’s no secret that housing is red hot these days – and the entire ecosystem of housing-related stocks has been riding high over the last year. The combination of low interest rates and pent up demand is just too much, and there are plenty of profits to be had. This includes our latest pick for our Best Monthly Dividend Stocks List.
Our pick is what’s called a mortgage REIT (mREIT). That is, it owns or lends money for the construction or purchase of real estate. This differs from REITs that own buildings and collect rents. Because of the difference in strategy, our pick is able to take advantage of short-term borrowing costs and longer-term loan rates to juice up its payout. In this case, our pick yields nearly 18%!
The secret to that high yield is a combination of the REIT structure and its high rates of leverage. But don’t be worried, our pick has chosen to invest in some of the safest mortgage loans and mortgage-backed securities around – those sponsored by government agencies. This provides some stability to its cash flows and that huge yield.
For investors, our pick’s agency-backed niche and monthly dividend make an ideal selection for those needing a boost to their income.
To make room for this mREIT, we had to remove a business development company this week.
You can check out the Best Monthly Dividend Stocks List to explore all monthly dividend-paying stocks.
