SOURCE: Paragon Financial Limited

Paragon Financial Limited

December 05, 2011 08:16 ET

High Yielding Invesco Mortgage and Capstead Mortgage See Credit Spreads Tighten

The Paragon Report Provides Equity Research on Invesco Mortgage Capital & Capstead Mortgage

NEW YORK, NY--(Marketwire - Dec 5, 2011) - While the US residential market continues to struggle, possible new government regulations are making the short-term outlook challenging for high yielding companies in the Mortgage Investment industry such as Invesco Mortgage Capital and Capstead Mortgage. With a significant amount of homeowners struggling to make payments on underwater mortgages, there is talk that the US government may craft a large scale refinance program for many home loans. The Paragon Report examines the outlook for the Mortgage Investment industry and provides equity research on Invesco Mortgage Capital Inc. (NYSE: IVR) and Capstead Mortgage Corporation (NYSE: CMO). Access to the full company reports can be found at:

Interest rates set by the federal government always dominate the mortgage investment landscape. The companies in the sector take out short-term loans and use them to buy mortgage backed securities in order to profit on the rate spread, making their profits -- and in turn dividends -- highly dependent on rate levels.

Last week Fitch ratings released a report noting that credit spreads have tightened moderately since 2011 year-to-date peak spreads in early October. "After a new issuance drought during much of August through October, several large-capitalization REITs across various property sectors priced unsecured bond offerings in November, spanning the credit rating spectrum," Fitch adds.

The Paragon Report provide investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the Mortgage Investment industry register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

Capstead Mortgage Corporation invests in a leveraged portfolio of residential mortgage pass-through securities consisting primarily of adjustable-rate mortgage securities issued and guaranteed by government-sponsored enterprises. The company must distribute at least 90% of its annual taxable income to its stockholders. Presently Capstead pays an annual dividend of $1.76 per share for a hefty yield of around 14.1 percent. Yields on the Company's interest-earning assets averaged 2.12% during the third quarter of 2011, a decline of 22 basis points from yields reported for the second quarter of 2011.

Invesco Mortgage Capital Inc. is a real estate investment trust that focuses on financing and managing residential and commercial mortgage-backed securities and mortgage loans. Presently the company pays an annual dividend of $3.20 per share for a massive yield in excess of 20 percent.

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