NRZ
$NYMT is my current favorite REIT play, so I decided to compare $NRZ and $NYMT.
- Off the top, they pay roughly the same yield, but $NYMT is up 13.44% in 2014 while $NRZ is down 5.69%. If nothing drastically changes in the interest rate environment or the housing situation for the next six months, what factors would make $NRZ do better?
- Q2 has been great for pretty much all such mREITs as the lower rates increased their unrealized gains and book values. I don't see how $NRZ stands out from the rest of the pack here (compare to $NYMT or $WMC or $MTGE).
- $NYMT fared extremely well during rising rates of 2013, unlike the rest of the pack. $NRZ got spun off in the middle of 2013, and seems to have done well since (without the wild fluctuations of the rest of the mREITs during that period). $NCT, the spinner company also seems to have done well during that time. So, I'd give $NYMT and $NRZ/$NCT a tie here.
I still have a poor appreciation for hedging strategies at $NRZ. These seem to differentiate poor mREIT performers from the better ones, and $NRZ just does not seem to have enough history to demonstrate savvy here.
SSK, you mentioned that you expect $NRZ to do well when rates rise. Do you feel their hedges will more than offset asset decay? Do you see other factors at play? I'd also appreciate your take on $NYMT and potentially $MTGE as counterpoints to investing in $NRZ.
Thanks!
