3 Mortgage REIT Stocks With High Yields as Treasury Demand Shifts

When a US$2.3t giant like Norway’s sovereign wealth fund signals it may trim tens of billions from US Treasuries, it reminds investors that even so called risk free assets can shift under your feet. That potential move in global bond demand could reshape yields, funding costs, and sentiment. This article walks through three US mortgage REIT stocks that are closely exposed to this news and explains how each might react if conditions evolve.

The three stocks covered below are just a sample, and the full screen picked up 30 more US agency MBS and mortgage REIT companies with similarly detailed stories that are not included here. To go deeper into this income corner of the market, analyze and filter the US Agency MBS and Mortgage REITs screener.

Dynex Capital (DX)

Overview: Dynex Capital is a US mortgage REIT that invests in residential and commercial mortgage backed securities, with a core focus on agency MBS tied to issuers such as Fannie Mae and Freddie Mac. This structure can give investors direct exposure to the income and pricing of these bond like assets.

Operations: Dynex Capital generates all of its US$502 million in revenue from mortgage REIT activities in the United States.

Market Cap: US$3.2b

Dynex Capital offers pure exposure to the agency MBS theme at the heart of this screener, at a time when global bond demand is being questioned by moves such as Norway’s proposed pullback from US Treasuries. The stock currently shows a low P/E of 7.5x, a very high dividend yield near 16%, and strong recent earnings growth, which together may appear attractive for income focused investors who prefer mortgage backed income over Treasuries. At the same time, dividends are not well covered by cash flow, funding relies entirely on external borrowing, and shareholders have recently been diluted. For investors evaluating the trade off between yield and balance sheet risk, Dynex is a company that may warrant closer review.

Dynex Capital’s low P/E, very high yield, and pure agency MBS focus could be masking a far bigger story about funding and payout resilience. Review the 4 key rewards and 3 important warning signs (2 are major!)

Invesco Mortgage Capital (IVR)

Overview: Invesco Mortgage Capital is a US mortgage REIT that invests, finances, and manages portfolios of residential and commercial mortgage backed securities, including both government agency backed and non agency bonds, giving shareholders targeted access to income streams tied to US mortgage and securitized credit markets.

Operations: Invesco Mortgage Capital generates US$139 million in revenue from mortgage REIT activities in the United States.

Market Cap: US$775 million

Invesco Mortgage Capital gives you focused exposure to agency mortgage income at a time when large allocators like Norway’s sovereign fund are rethinking traditional government bond holdings. The company has been reshaping its capital structure and hedge mix, including greater use of US Treasury futures, to steady earnings from its agency RMBS and CMBS portfolio. Recent results show a shift from loss to profit, and analysts see scope for earnings growth, yet today’s dividend is not fully covered by earnings or cash flow and past dilution highlights funding pressure. If you are weighing higher mortgage backed yields against leverage, dividend and governance risks, Invesco Mortgage Capital is a stock that may deserve a closer look in this screener.

Invesco Mortgage Capital’s shift from loss to profit and its use of US Treasury futures could be masking a very different earnings path than the headline yield suggests. Weigh that income against leverage and dilution in the 4 key rewards and 3 important warning signs (3 are major!)

Orchid Island Capital (ORC)

Overview: Orchid Island Capital is a US mortgage REIT that invests exclusively in agency residential mortgage backed securities, giving you focused exposure to income streams from single family home loans packaged into RMBS. Its portfolio mixes traditional pass through certificates with more complex interest only, inverse interest only and principal only securities that can respond differently as interest rates and mortgage prepayments move.

Operations: Orchid Island Capital generates all of its US$270 million in revenue from mortgage REIT activities in the United States.

Market Cap: US$1.3b

Orchid Island Capital provides direct access to US agency RMBS income at a time when big investors like Norway’s sovereign fund are questioning government bonds and looking toward higher yielding credit. The stock combines a very high dividend yield with a low P/E and recently strong profitability, yet that payout is not fully covered by earnings or cash flow and the REIT relies entirely on external borrowing. Recent buybacks and a run of monthly dividend declarations through mid 2026 indicate management’s confidence, but the business is highly sensitive to funding costs, spread moves and hedging decisions. For investors who want targeted mortgage income and are comfortable weighing payout appeal against balance sheet and volatility risks, Orchid Island Capital may merit closer consideration.

Orchid Island Capital’s high yield and low P/E could be masking a very different risk reward profile than headline income suggests. Map out how its payout, leverage and rate sensitivity really stack up in the 4 key rewards and 3 important warning signs (3 are major!)

Seeking Alternatives Beyond Mortgage REITs

Fresh ideas can move fast. Some stocks are already building momentum while others are still under the radar for now. Instead of watching from the sidelines, consider exploring new opportunities.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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