FBR Capital Starts New York Mortgage Trust (NYMT) at Market Perform
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FBR Capital initiates coverage on New York Mortgage Trust (NASDAQ: NYMT) with a Market Perform rating and a price target of $6.25.
Analyst Jessica Levi-Ribner commented, "Once more of an agency play with a lot of earnings noise, New York Mortgage Trust, Inc. (NYMT) is transitioning toward being a more streamlined, creditsensitive REIT that should be able to weather interest rate and credit storms well. In particular, management is targeting a 50/50 split between multifamily and distressed residential credit. As it is, the company has been able to earn aboveaverage economic returns, especially compared to peers, through a combination of relative book value stability and a high dividend payout. However, shares have long traded at a discount to peers on a dividend yield basis given earnings volatility and related concerns over dividend sustainability. While the company's move toward a more credit-sensitive and stable earnings portfolio is likely to pay off over time, we believe that the combination of continued earnings noise and the execution risk inherent in the portfolio transition has shares fully valued around book value. As such, we are initiating coverage of New York Mortgage Trust with a Market Perform rating and price target of $6.25 per share. Our price target is just under 1.0x 2Q16 book value of $6.43 and implies a 15.3% dividend yield based on the current annual dividend."
Shares of New York Mortgage Trust closed at $5.71 yesterday.
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