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Wunderlich Downgrades American Capital Mortgage On Dividend Cut Surprise

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On March 20, Wunderlich Securities released an update on mREIT American Capital Mortgage Investment Crp (NASDAQ: MTGE), titled: "Downgrading to Hold on Unexpected Dividend Cut."

American Capital Mortgage is a real estate investment trust that invests in and manages a leveraged portfolio of agency mortgage investments, non-agency mortgage investments and other mortgage-related investments.

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Prior Year - Metrics & Dividends


Source: Company February 2015 presentation

The 2014 annual dividend of $2.60 per share, equates to a $0.65 quarterly dividend TTM.

On March 19, after the bell, American Capital Mortgage declared a cash dividend of $0.50 per share for Q1 2015.

Related Link: Morgan Stanley's 'Realistic REIT Bull Case' For MGM

Wunderlich - MTGE: Downgrade Buy to Hold, Lowers PT

On March 20, Wunderlich downgraded American Capital Mortgage to Hold, and reduced its 2015 price target sharply from $21.50 to $18.50.

The new Wunderlich price target of $18.50, represents a 15 percent discount to forward book value per share (BVPS).

Noting that based "on the company's allocation of equity to agency and non-agency MBS of relatively short duration and based on our expectation that its drop in income would remain fulsome, we had believed that the dividend was sustainable."

Wunderlich now feels that "there were attributes to the business strategy that we did not understand."

Latest Ratings for MTGE

May 2017Wells FargoUpgradesMarket PerformOutperform
Aug 2016CitigroupMaintainsNeutral
Aug 2016Deutsche BankMaintainsHold

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Posted-In: Wunderlich SecuritiesAnalyst Color REIT Downgrades Price Target Analyst Ratings General Real Estate


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