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REIT Q2 Earnings: ETFs in Focus

REIT Annaly Capital Management NLY reported second-quarter 2017 net interest income of $315 million, reflecting an increase of more than 3.6% from $304 million a year ago. It reported core earnings per share (excluding premium amortization adjustment of $0.07 per share) of $0.30, in line with the Zacks Consensus Estimate of $0.30.


Moreover, it reported high variability in Other Income (Loss) data, with a gain of $30.865 million in the quarter against a loss of $9.930 million in the year-ago quarter. It had also reported a gain of $31.646 million in the previous quarter.


Comprehensive income came in at $289.95 million compared with $400.31 million in the previous quarter. The company had registered a gain of $198.56 million in the year-ago quarter. Moreover, the company declared a dividend of $0.30 per share for the quarter.


The company reported book value per share of $11.19, declining 0.35% from $11.23 in the previous quarter. Its book value per share was $11.50 in the year-ago quarter.  


Shares of NLY declined around 0.6% in afterhours trading on August 2, 2017.


REIT AGNC Investment Corporation AGNC reported second-quarter 2017 net spread and dollar roll income (excluding $0.04 per share catch up premium) of $0.67/ share, beating the Zacks Consensus Estimate of $0.59. It reported net interest income of $181 million for the quarter in discussion, declining roughly 16.6% from $217 million a year ago. Moreover, net interest income declined roughly 8.6% from $198 million in the previous quarter.


Moreover, it reported high variability in Other Income (Loss) data, with loss of $141 million in the quarter against a loss of $312 million in the year-ago quarter. It had also reported a loss of $105 million in the previous quarter.


Comprehensive income came in at $138 million compared with $115 million in the previous quarter. The company had registered a gain of $240 million in the year-ago quarter. Moreover, the company declared a dividend of $0.54 per share for the quarter.


The company reported net book value per share of $20.80, declining 0.9% from $20.98 in the previous quarter. Its tangible net book value per share also decreased to $19.25 from $19.31 in the previous quarter.


Shares of AGNC were relatively flat at market close on July 27, 2017.


Let us discuss the ETFs that have a relatively high exposure to the two companies (read: Why to Buy REIT ETFs in 2017?).


iShares Mortgage Real Estate Capped ETF REM


This fund offers exposure to the U.S. residential and commercial real estate space. It has AUM of $1.34 billion and charges a fee of 48 basis points a year. It has 17.12% exposure to Annaly and 9.94% to AGNC (as of August 1, 2017). The fund has returned 11.15% year to date and 9.23% in the last one year (as of August 2, 2017). The fund currently has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: Rate Sensitive ETFs in Focus as Fed Meets).


VanEck Vectors Mortgage REIT Income ETF MORT


This fund seeks to provide exposure to the U.S. mortgage REIT space. It has AUM of $144.8 million and charges a fee of 41 basis points a year. It has a 13.96% exposure to Annaly and 8.47% to AGNC (as of August 2, 2017). The fund has returned 12.48% year to date and 10.91% in the last one year (as of August 2, 2017). The fund currently has a Zacks ETF Rank #3 with a Medium risk outlook.


Below is a year-to-date chart comparing the performance of the funds and the two companies.


 
Source: Yahoo Finance


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REITS/MORTGAGE (REM): ETF Research Reports
 
VANECK-MTG REIT (MORT): ETF Research Reports
 
American Capital Agency Corp. (AGNC): Free Stock Analysis Report
 
Annaly Capital Management Inc (NLY): Free Stock Analysis Report
 
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