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mREITs Q1 Earnings to Watch on May 9: STWD, IVR, CLNY

While majority of the real estate investment trusts (“REITs”) have already reported their earnings for the Jan-Mar quarter, a number of mortgage REITs are yet to come up with their quarterly numbers.

Unlike other categories of REITs, mortgage REITs or mREITs – the name that investors are most familiar with –  do not actually own commercial properties, office buildings, residential complexes, shopping malls or premium outlets. Instead, they either loan money to property owners, or simply purchase existing mortgages and/or mortgage-backed securities (MBSs). These companies borrow money at a very low rate of interest, and in turn, use it to purchase MBSs.

So, a low interest rate environment serves as a boon for the mREIT industry. However, during the Jan-Mar quarter, the possibility of a rate hike due to a better job report, higher consumer spending and improved inflation data kept the mREIT industry on tenterhooks.

Notably, two important companies American Capital Agency Corp. AGNC and Annaly Capital Management, Inc. NLY missed earnings estimates during the quarter.

Let’s see how things are shaping up for the three mREIT stocks that are scheduled to release results on May 9.

Starwood Property Trust, Inc. STWD has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). Our proven model does not conclusively show that Starwood Property Trust is likely to beat earnings this quarter. This is because the company lacks the right combination of two key ingredients – a positive Earnings ESP (the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3.



Invesco Mortgage Capital Inc. IVR has an Earnings ESP of -5.00% and a Zacks Rank #3. The combination of Invesco Mortgage Capital’s Zacks Rank #3 and negative ESP makes surprise prediction difficult.

Colony Capital, Inc. CLNY has an Earnings ESP of 0.00% and a Zacks Rank #3. So, Colony Capital too does not fit the bill of a positive surprise.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
STARWOOD PROPRT (STWD): Free Stock Analysis Report
 
AMER CAP AGENCY (AGNC): Free Stock Analysis Report
 
COLONY CAPITAL (CLNY): Free Stock Analysis Report
 
ANNALY CAP MGMT (NLY): Free Stock Analysis Report
 
INVESCO MORTGAG (IVR): Free Stock Analysis Report
 
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