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52 weeks
52 weeks

Mkt Cap 5.07B

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New Residential: Buy The Correction


The sell-off in New Residential's stock is a major chance for opportunistic income investors to pick up a cash cow.

New Residential hiked its dividend twice this year, and a total 31% Y/Y on a recurring dividend basis.

New Residential has attractive total return potential.

NRZ yields 14.2%.

Few REITs excite me as much as New Residential Investment Corp. (NYSE:NRZ). The REIT invests in mortgage assets like excess mortgage servicing rights, non-agency residential mortgage-backed securities, and call rights. New Residential is an unconventional REIT and is often unfairly compared to more traditional mortgage REITs like Annaly Capital Management, Inc. (NYSE:NLY) and its peers.

I started covering New Residential Investment at the beginning of the year, and quickly decided to give this alternative mortgage REIT a shot in my $100,000 high-yield income portfolio because the company convinced me with a promising investment portfolio, robust book value and earnings growth, and retained valuation upside from rising interest rates.

So far so good. But New Residential's stock languished in the second and third quarters, even though the real estate investment trust reported respectable Q2-15 results with record core earnings of...