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FBR Capital Maintains a 'Market Perform' on Anworth Mortgage Asset (ANH); First Leg of Earnings Trajectory Evidenced

May 6, 2011 8:28 AM EDT
Get Alerts ANH Hot Sheet
Price: $2.98 --0%

Rating Summary:
    3 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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FBR Capital maintains a 'Market Perform' on Anworth Mortgage Asset (NYSE: ANH), PT increased from $7 to $7.25.

FBR analyst says, "More importantly, we believe that the positive EPS delta from 4Q10 to 1Q11 evidences that the ANH portfolio is beginning to settle into a consistent state that may evidence further earnings growth. To this point, we have increased our forward earnings run-rate to $0.26 from $0.24 for 2H11 as we expect portfolio spread to push incrementally higher as ANH's legacy swaps roll-off. However, with several peers currently offering higher dividend run-rates, we do not believe shares warrant trading at a material premium to book value until higher earnings power is evidenced. We believe that this may occur should management push leverage towards 8.0x from 7.1x at March 31. At our new $7.25 price target, ANH would trade at a 5% premium to last reported book value of $6.92 and yield 14.3% based on our 2Q11 quarterly run-rate dividend estimate of $0.26."

For more ratings news on Anworth Mortgage Asset click here and for the rating history of Anworth Mortgage Asset click here.

Shares of Anworth Mortgage Asset closed at $7.25 yesterday.


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