Mortgage REITs are posed to post returns as much as 20% this year, according to Michael Widner, a REIT analyst at KBW Bank. Mortgage REITs in general are attractive to investors now due to their high dividend yields. They are also trading at 20% discounts to the book value of the underlying bond portfolio, Widner says. The stock market, by contrast, may not perform at a similar rate this year. "I have a difficult time seeing the broader market replicating its 2013 returns in 2014," he says.
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