Compass Point Provides Mortgage REIT Update; Reiterates Ratings

Compass Point Research & Trading is out with a research report today providing an update on the mortgage REIT industry, as well as reiterating its ratings on companies in the industry.

In the report, Compass Point reiterated its ratings on Annaly Capital (NYSE: NLY) (Neutral, $18.50 price target), Anworth Mortgage (NYSE: ANH) (Buy, $8 price target), and Arlington Asset Investment (NYSE: AI) (Buy, $34 price target).

In the report, Compass Point referred to Arlington Asset Investment, stating, "AI is structured as a C-Corp and not a REIT, although we believe mortgage REITs are the best comparable business models for valuation purposes. Importantly, we see several benefits to AI's structure - a large deferred tax asset that will allow the company to organically grow book value and a qualified dividend stream (lower tax rate) - that afford the company increased flexibility and are expected to lead to additional value creation."

In the report, Compass Point stated that its bottom line of the SEC's request for comment on the mortgage REIT industry is an "attractive entry point for the sector."