With income investors looking to invest in high dividend-yielding mortgage REITs amid the near-zero interest rate environment, both Annaly Capital Management (NYSE:NLY) and Granite Point (GPMT) could attract significant attention. But which of these stocks is a better buy now? Read more to find out.Mortgage real estate investment trust (REIT) Annaly Capital Management, Inc. (NLY) invests in various types of agency mortgage-backed securities, non-agency residential mortgage assets, and residential mortgage loans. In comparison, Granite Point Mortgage Trust Inc . (NYSE:GPMT) is an internally managed real estate finance company. It originates, invests in, and manages senior floating-rate commercial mortgage loans and other debt and debt-like commercial real estate investments in the United States.
With key interest rates held at near zero, income investors' interest in mortgage REITs has been growing because they distribute most of their profits as dividends. Furthermore, mortgage REITs are expected to be even more in focus because U.S. Treasury yields fell yesterday, following poor consumer sentiment. According to a CNBC report, the University of Michigan’s consumer sentiment index fell to 70.2 in its preliminary August reading, its lowest level since 2011. As a result, NLY and GPMT could witness increased investor attention in the near term.
NLY has gained 14.5% over the past year, while GPMT has returned 78.8%. Also, GPMT’s 50.3% gains over the past nine months are significantly higher than NLY’s 11.2% returns. And, in terms of their past six months’ performance, GPMT is the clear winner with 25.1% gains versus NLY’s 0.6% returns.