Companies Investing Right Along With You
18.05.12
But don't forget, Fools -- a company isn't obligated to repurchase shares just because it announced its intention to do so. So don't use this list as a reason to buy by itself, rather use it as a launching pad for additional research.
Shining a light on growth
I've remarked before the Federal Reserve's Operation Twist program, which artificially keeps interest rates low, hurts a large number of financial institutions because it encourages borrowers to refinance at lower rates. It clears the books of banks and mortgage lenders of higher-interest loans and replaces them with others that have far less favorable terms .
Invesco Mortgage Capital was the victim of the Fed's policy as it experienced higher prepayment rates on loans backed by agency-backed securities (such as those underwritten by Fannie Mae or Freddie Mac), which resulted in lower asset yields. Moreover, it had to reduce the risk it faced from the European sovereign debt crisis, which led the mortgage REIT to cut its dividend for the second straight quarter, from $0.80 to $0.65.
Source: Motley Fool