Dynex Capital, Inc. (NYSE:DX)

CAPS Rating: 5 out of 5

The Company with its subsidiaries is a specialty finance company organized as a mortgage real estate investment trust that invests in loans and fixed income securities consisting of single-family residential and commercial mortgage loans.

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Member Avatar GearCat (26.36) Submitted: 4/13/2014 3:45:11 PM : Outperform Start Price: $8.62 DX Score: -1.16

Good ROE, priced fairly, growing population in the united states will always need a place to live, despite interest rates. Great dividend.

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Member Avatar PayMeDivs (51.57) Submitted: 3/12/2014 6:58:48 PM : Outperform Start Price: $8.51 DX Score: +2.81

Beautiful dividend

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Member Avatar tgrshark13 (< 20) Submitted: 1/5/2014 6:43:42 PM : Outperform Start Price: $7.81 DX Score: +9.52

Strong dividend. When market is confident it is secure, stock price may rise substantially. High risk, but potential high reward.

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Member Avatar dunloggin (78.11) Submitted: 12/26/2013 10:35:00 PM : Outperform Start Price: $7.92 DX Score: +8.25

buying for dividend.

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Member Avatar poxriddengerm (31.19) Submitted: 9/20/2013 2:38:58 AM : Outperform Start Price: $8.08 DX Score: -0.73

Dividend yield

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Member Avatar 42asdf (47.82) Submitted: 3/19/2013 9:32:18 PM : Outperform Start Price: $9.48 DX Score: -27.89

excellent growth, and very undervalued. The one thing that worries me is its debt/equity is huge, but with 60% margins and spectacular cash flow that will not be a problem for long

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Member Avatar adfishow (21.79) Submitted: 3/16/2013 10:08:42 PM : Outperform Start Price: $9.49 DX Score: -28.96

Another pick from my Value screen

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Member Avatar fooluser17 (42.34) Submitted: 10/6/2012 11:01:55 PM : Outperform Start Price: $8.62 DX Score: -27.01

Probably not buying for real portfolio due to high payout ratio and already having so much in the sector.

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Member Avatar SgtFriday (< 20) Submitted: 4/18/2012 2:12:23 PM : Outperform Start Price: $7.37 DX Score: -29.26

Better than bonds.

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Member Avatar stockstar69 (44.30) Submitted: 4/5/2012 7:02:18 PM : Outperform Start Price: $7.22 DX Score: -14.67

The interest rate will be going up soon. I really believe it. DX may be a better bet than NLY and I own shares in both stocks. This concern, DX, seems to be the "Widows and Orphans" stock of REITS.

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Member Avatar stpatrick31782 (70.18) Submitted: 1/17/2012 8:00:32 PM : Outperform Start Price: $7.14 DX Score: -21.69

All high yield stocks with promising valuations.

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Member Avatar TSIF (99.96) Submitted: 9/12/2011 3:02:53 PM : Outperform Start Price: $6.14 DX Score: -20.43

Reentering on CAPS at nearer my RL $8.40 buy-in.

Update: I reentered this also at 8.90 and it dropped another $0.40. I used some of Anchak's notes for DD (referenced below), but he cautioned last week that even at $8.40 he's backing off due to unknowns from a Fed Operation Twist that could pull down interest rates on the high end of the curve, affect mREIT's. Anchak preferred "TWO" and "MFA". I'm also a fan of TWO.

Updated "Old" PITCH:

Dynex Capital, Inc and the rest of it's Mortgage based REIT's continue to get hit hard by the fear that low interest rates will cause their lucrative mortgages to be refinanced at a lower rate. A higher interest rate will lower their borrowing/loan ratio/leverage. The government may change reporting rules and this caused some confusion. Overall, my $7.40 entry offers decent upside and and a 12.0% dividend, with two more dividends scheduled for the balance of this year. (Sept and December). Between the two, I should get a good CAPS dividend reinstment price if the market doesn't sell off post dividend in expectations of a lower dividend moving forward.

The dividend looks stable for now. The REIT's can and do crash if the market crashes, but if the fears of government intervention wane or are catagorized farily then I don't see much downside for Dynex Capital. I don't expect much out of the markets the next year, although we may see varying degrees of relief/sucker rally's, so a strong Dividend payer should dividend reinvest for me nicely. A dividend payer rarely beats the S&P when it's on a tear, so doesn't always make a good caps play, but I'm comfortable with one that has a stable dividend and has show upside potential on the core equity share price. Dynex Capital has an "easy" 8-10% upside share price potential from here if things stabilize, could drop with the markets if things don't but should deliver about 6% in dividends between the Sept and Dec payouts before the dividend gets reassessed.

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REIT's come in several flavors, they could have rental property, industrial, commerical, residential, etc. There are several that operate around Mortgage Loans. While this is "what got the country in trouble" there is some opportunity here.

Adding Dynex Capital, Inc to my long term REIT Dividend plays. Several got hit hard in this last debt crisis correction. There are many that are Mortgage Investment Trusts that rely on the gap between low cost borrowing and mortgage rates and hope that a majority of the mortgages in their portfolio pay off. Currently many are backed by the governement, but this could change. In the meantime this 52 week low gives me 12%, (not guaranteed, but seems solid for now), and a low entry point. Exactly what you want for a dividend payer. All of these Mortgage REIT's have their pros and cons depending on leverage, backing, interest rates spread, US credit rating etc. Long term, I think they have a good chance of beating the S&P with dividend reinvestment. Beating the S&P in Q3-2009 - Q1 -2011 with a divend payer was not likely, but I think it can be over a year or two's time period.

See also JakilaTheHun's recent blog on DV and three other Mortgage REIT's.
http://caps.fool.com/Blogs/four-mortgage-reits-with/622057

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Member Avatar jackofficer (< 20) Submitted: 9/12/2011 1:19:16 PM : Outperform Start Price: $6.16 DX Score: -21.20

Stable at the moment

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Member Avatar amungiol (< 20) Submitted: 5/2/2011 11:08:44 PM : Outperform Start Price: $6.99 DX Score: -12.65

Since Dynex Capital is a REIT it must distribute at least 90% of its taxable income to its shareholders. This is an IRS regulation and one sees it in the hefty $1.08 annual dividend per share.

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Member Avatar ColbyK (49.20) Submitted: 12/17/2010 6:40:59 PM : Outperform Start Price: $7.14 DX Score: -27.66

Read about them in Kiplinger in the end of 09, that was when they were at $9 or so. Still love them!

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Member Avatar loganhurst (< 20) Submitted: 6/21/2010 10:06:00 PM : Outperform Start Price: $6.22 DX Score: -27.40

Winner, given comparisons to industry ratios and Statements (via msn.com/money), company seems to be headed in the right direction.

Also, what a dividend.

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Member Avatar dantefromsomm (< 20) Submitted: 1/25/2010 1:10:52 PM : Outperform Start Price: $5.61 DX Score: -14.47

I dont like the debt but everything else is awesome

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Member Avatar gmdraves (< 20) Submitted: 1/13/2010 8:35:01 PM : Outperform Start Price: $5.66 DX Score: -9.17

I believe real estate will eventually bounce back. I'm buying this one more as an income generator; Dynex has a very attractive dividend.

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Member Avatar MarketBottom (29.45) Submitted: 6/3/2008 5:37:24 PM : Underperform Start Price: $4.69 DX Score: -44.19

Banks, morgage companies, and financials in general will surely find the enviroment going forward challenging. The consumer is struggling, and all forms of credit are seeing rising loses. Thumbs down for this sector for the forseeable future. Additional capital will be required by regulators, and the appetite for risk has decreased dramatically over the last year. The FDIC is calling retired former employees back to deal with the potential collapse of 300 to 1000 banks in the coming year or two. In this decending cycle it will become more and more difficult to grow profits and expland while actual consolidation of the industry is taking place.

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Member Avatar deuspecuniae (96.41) Submitted: 5/1/2008 1:31:34 PM : Underperform Start Price: $4.61 DX Score: -50.49

The credit crises and morgage meltdown in the U.S. isn't going anywhere this summer and is likely to only get worse. If Bear Sterns couldn't survive what hope is their for the rest of the financial sector. Yes, the financial sector seems to be jumping back and key reversals seem to be lifting bullish investors, but this ray of hope will end once investors understand how bad this looming recession is going to be. Even the hopeful and growing few in the financial sector are going to suffer from the troubles of the many.

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