MFA Financial (MFA)

What Moves the Stock

1. 01Net interest margin expansion/compression driven by yield curve shape and repo funding costs
2. 02Book value per share changes from mark-to-market adjustments on MBS portfolio and hedge effectiveness
3. 03Dividend sustainability and coverage ratio (operating earnings vs. distributions)
4. 04Prepayment speeds on mortgage portfolios affecting asset reinvestment rates
5. 05Credit performance of non-agency legacy RMBS holdings
6. 06Net interest income from agency MBS portfolio (estimated 60-70% of earnings)
7. 07Net interest income from non-agency residential whole loans and securities (estimated 20-30%)
8. 08Realized gains/losses on asset sales and hedging activities

MFA Chart

My Notes

• dividend - Mortgage REITs attract income-focused investors seeking high current yields (typically 8-12% dividend yields).
• Extreme sensitivity to both rate levels and curve shape.
• Watch on earnings: 10-year Treasury yield and 2-year Treasury yield (funding cost proxy and curve shape), 30-year fixed mortgage rate (affects prepayment speeds and refinancing activity), SOFR and Fed Funds rate (direct impact on repo borrowing costs).