Hatteras Financial (NYSE:HTS)

CAPS Rating: 4 out of 5


Player Avatar TSIF (99.96) Submitted: 9/23/2009 12:49:34 PM : Outperform Start Price: $18.70 HTS Score: -73.85

Hatteras Financial is an interesting REIT that was founded in 2007. This would seem to be the peak of the bubble, but Hatteras doesn't seem to be affected. Although they deal in residential mortgages they are in the form of pass-through securities guaranteed or issued by a United States Government agency or sponsored agency. They are at a 52 week high. The dividend is holding at an impressive 13%. ON Caps you only credited a portion of the dividends, so overall you can come up short on CAPS playing pure dividend stocks. In this case Hatteras is also appreciating in price while paying the dividends. It seems hard to believe that we can have a successful REIT in this climate or count on dividends holding, but so far Hatteras is showing the money. Margins are hard to calculate on REIT's, but even if skewwed, the 88% margins, 113% quarterly earning growth look tempting. The debt is rising, but no doubt securing additional mortgages. Looks like an interesting play.

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