1. New Residential Investment Corp.
New Residential Investment Corp. (NYSE: NRZ) invests primarily in mortgage-servicing products, such as mortgage servicing rights, as well as residential mortgage-backed securities. As of June 2019, the REIT has $37 billion in assets. Their focus is on long-term, stable cash flow.
The corporation recently bought shares of Guardian Asset Management, a field services and property management company for government agencies, financial services, and asset management. This brings hope for continued growth.
It's important to note that this is a volatile stock. While it produces a high dividend, it's best for those who have a higher risk threshold.
2. New York Mortgage Trust
New York Mortgage Trust (NYSE: NYMT) invests in and manages mezzanine securities and mortgage loans secured by residential and commercial assets. Most of their assets are from the distressed market.
To date, their annualized return is 17.7%. Just over 50% of New York Mortgage Trust is owned by institutional investors such as hedge funds. This gives many investors confidence in the company’s holdings and potential growth.
Their leverage ratio is 1.8 to 1, far below March 2018's median leverage ratio of 3.6.
3. Ready Capital Corp.
Ready Capital Corporation (NYSE: RC) acquires, originates, manages, and finances commercial real estate loans and real-estate-related securities. It has performed well in the past and shows growth potential for the future.
In Q2 2019, Ready Capital Corp acquired $835 million worth of small-balance commercial loans. This acquisition resulted in a 15% portfolio growth, and there's more in the Q3 pipeline. The return on stockholders' equity increased 80 basis points in Q2 2019 to 8.8%. This is closer to the corporation's goal of 10% return on equity (ROE). Its gross leverage ratio is higher than the industry average at 3.9 to one, which poses a concern for some.
When considering these top three mortgage REITs, make sure you review each company and determine if the volatility or risk potential involved makes sense for you. Changes in economic conditions and increases in interest rates can affect any of these companies at any moment.
Always conduct your own due diligence and make sure your investments align with your risk tolerance.