UPDATE: Compass Point Initiates Western Asset Mortgage Capital with Buy, $21 PT
Compass Point initiated coverage on Western Asset Mortgage Capital (NYSE: WMC) with a Buy rating and a price target of $21.
Compass Point noted, "We remain generally positive on levered mortgage investing based on a few key macro premises. In the Agency mREIT space, WMC is somewhat unique as it has built a diverse portfolio capable of mitigating near term prepayment risks (our expectation is for broad based increases in Agency prepayment rates over the next several months), the dividend is growing and the stock still trades at only a modest premium to book value. Based on the company's recent dividend announcement, we believe portfolio returns are tracking slightly ahead of our modeled expectations."
Western Asset Mortgage Capital closed at $20.14 on Monday.
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