FBR Capital maintained an Outperform rating on New Residential Investment (NYSE: NRZ), and cut the price target to $15.50 (from $21.00), following the company's 4Q. Management made it clear that capital preservation is a priority over an increased dividend and share repurchases, at least in the near term. FBR sees this as a smart decision, despite likely investor disappointment. New Residential Investment Corp. remains one of FBR's top picks.

Analyst Jessica Ribner commented, "New Residential Investment Corp. remains one of our favorite names, with 4Q15 results and commentary reinforcing that viewpoint. Management made it clear that capital preservation is a priority over an increased dividend and share repurchases, at least in the near term. This likely disappointed some investors but is the smart decision, in our opinion. Considering its over $1 billion of excess liquidity, NRZ should be well positioned to take advantage of any distressed opportunities that could pop up, given today's turbulent market, like it did with the HLSS asset acquisition. We believe that NRZ should be rewarded for this position, as it may lead to long-term earnings growth that is higher yielding than buybacks would likely be. In addition, with our forecast of quarterly core EPS of $0.49 to $0.51 for 2016, we believe NRZ should be able to easily earn its dividend, putting it ahead of peers who have cut their dividend in recent quarters. We reiterate our Outperform rating, but we adjust our price target to $15.50 from $21, given lower overall valuations in the mREIT space. Our updated price target represents ~1.3x 4Q15 BV of $12.13 per share, which implies a forward dividend yield of ~12%."

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Shares of New Residential Investment closed at $11.58 yesterday.