On December 26, 2019, I bought 53 shares of New Residential Investment Corp (NRZ ) at $16.625 per share. With its quarterly dividend payout of 0.5 dollars per share, this latest buy has a dividend yield of 12.03% (before tax) and will pay us an additional $26.5 (before tax) every quarter. Awesome!
NRZ has been in our dividend income portfolio since August 2018, when I originally bought 27 shares paying $18.47 per share. The second time I bought 100 shares of NRZ in June 2019. In November I took some loss from my options trades and I was forced to sell off some of my stocks (including NRZ), with this latest buy I'm repairing loses done to the dividend income portfolio.
There are three simple reasons I like this stock - it has a nice dividend yield of more than 10%, it has increased the dividend payout for the past 5 consecutive years. Last, but not least, on NRZ we can trade both put and call options. Also, NRZ has dividend payments in January, April, July, and October.
When speaking about selling options on NRZ, that's what I actually did, just shortly I bought 53 shares I sold a May 15, 2020 expiry put on NRZ stock with strike price 16 and got premium $75
By now NRZ takes 12.80% from our US stock portfolio, and also is one of the biggest dividend payers in the portfolio by now.
In total, we now have 153 shares of NRZ, and we are looking to get about $260 in dividend income in 2020.
I haven't yet defined our dividend goal for 2020, but I believe it will be set at around $3.600. With that in mind, this latest buy will contribute about 2.5% of the dividend income. In total NRZ promises to generate about 7.2% from that goal. Good.
Depending on the results with the put option in May, I would love to increase our share with NRZ so it would help us generate a dollar per day or $365 in dividend income yearly. It total I would ask to increase our share count to 214. Most probably we will get there in 2020
About New Residential Investment Corp. (NYSE: NRZ)
New Residential Investment Corp. (NYSE: NRZ) is a publicly traded real estate investment trust (“REIT”) that focuses on investing in, and actively managing, investments primarily related to residential real estate.
We aim to drive strong risk-adjusted returns primarily through investments in (i) Excess Mortgage Servicing Rights ("MSRs"), (ii) Servicer Advances, (iii) non-Agency residential mortgage backed securities ("RMBS") and associated call rights.
Our objective is to leverage our proven investment expertise to deliver attractive returns that will help drive strong and growing dividends to our shareholders. We target assets that generate stable long term cash flows and employ conservative capital structures to generate returns throughout different interest rate environments.
Over the last few decades the complexity of the market for residential mortgage loans in the U.S. has dramatically increased. We believe that unfolding developments in the approximately $21 trillion U.S. residential housing market are generating significant investment opportunities. For example, in the aftermath of the U.S. financial crisis, the residential mortgage industry is undergoing major structural changes that are transforming the way mortgages are originated, owned and serviced. These changes are creating a compelling set of investment opportunities. We believe that New Residential is one of only a select number of market participants that have the combination of capital, industry experience and key business relationships we think are necessary to take advantage of this opportunity.