Mortgage real estate investment trusts (REITs) took a beating in 2013 when the eventual end of qualitative easing became a reality and tapering was announced, and while they have partially recovered since the beginning of this year (some are now at 52-week highs) Sterne Agee analysts Jason Weaver, Henry Coffey Jr., and Calvin Hotrum argue that they are still attractive at their current prices.
“Price/Book ratios remain well south of their historical medians even in comparable periods of heightened interest rate volatility, and dividend yields now appear far more sustainable and attractive versus comparable asset classes,” they write. They...