Welcome to the third issue of The Big Dividend Report!
For new readers, in this series my aim is to check under the hood of the biggest dividends in the market and to keep you updated on the latest and greatest. We will limit ourselves to the biggest 20 dividends coming from companies with at least $2 billion in market cap.
Today, we'll look at recent news that affects some of those same 20 companies.
American Capital Agency (NAS: AGNC)
Chimera (NYS: CIM)
Hatteras Financial (NYS: HTS)
Annaly Capital (NYS: NLY)
MFA Financial (NYS: MFA)
Cheniere Energy Partners LP
Frontier Communications (NYS: FTR)
BP Prudhoe Bay Royalty Trust
Terra Nitrogen LP
Hospitality Properties Trust (NYS: HPT)
Sources: Yahoo! Finance, and Capital IQ, a division of Standard & Poor's.
The most interesting (read: potentially alarming) news regards the mortgage REITS here (the first five names on this list are mortgage REITs that make money investing in mortgage-backed securities; Hospitality Properties Trust is a REIT, but not a mortgage REIT ... in other words it owns actual properties, not securities).
Per a blog post by Ben Levisohn of The Wall Street Journal:
On Aug. 31, the U.S. regulator sought comment on whether mortgage REITs should lose their tax exemption or their ability to use leverage. The plan seems to be to force them to choose one of two options: become a regular corporation—and get taxed like one—but keep the leverage or lose the leverage and keep the tax exemption.
Here's the SEC release.
Investment bank Sterne Agee has already come out saying that SEC actions are unlikely to materially damage mortgage REITs. Its basis is that whole pools of mortgage-backed securities are exempt and that the SEC will merely change some of the practices of mortgage REITs.
We shall see. Any curbing of leverage or tax exemption is very bad news for the sector, so I plan to monitor this situation as more news and details come out.
Outside of the mortgage REIT industry, I'd like to highlight an excellent article written by one of my fellow Fools. Eric Bleeker looks into the sustainability of Frontier Communications' dividend. He provides some interesting thoughts on how Frontier is doing vis a vis its large Verizon asset acquisition. Complete with a 14-slice pie chart!
This ends our third issue of The Big Dividend Report. To keep track of all our analysis on any of these companies, including future issues of The Big Dividend Report, click here to add them to My Watchlist. Or for some more dividend ideas, check out our free report: "13 High-Yielding Stocks to Buy Today."
At the time thisarticle was published Anand Chokkaveluowns shares of Frontier Communications.The Motley Fool owns shares of Veolia Environnement, Annaly Capital Management, and Chimera Investment.Motley Fool newsletter serviceshave recommended buying shares of Cellcom Israel. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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