Mortgage Real Estate Investment Trusts (i.e., “REITs”) – often referred to as “mREITs” – can provide a very attractive source of income for investors.
This is because they invest in mortgages that are typically backed by hard assets (commercial and/or residential real estate) with fairly conservative loan-to-value ratios.
Mortgage REITs finance these portfolios with a mixture of equity (that they raise by selling shares to investors) and debt that they generally raise at an interest cost that is meaningfully lower than the interest rates they can command on their real estate mortgage investments.
The result is significant and stable cash flow for the mREIT. These 3 mortgage REITs have elevated risk profiles, but also have very high dividend yields.
Blackstone Mortgage Trust (BXMT)
Blackstone Mortgage Trust is a real estate finance company primarily involved in the origination and purchase of senior loans collateralized by commercial properties in North America and Europe.
The vast majority of the company’s asset portfolio is comprised of floating rate loans secured by first priority mortgages primarily derived from office, hotel, and manufactured housing properties.
On July 30, 2025, Blackstone Mortgage Trust, Inc. reported its financial results for the second quarter of 2025. The company posted net income of $7.0 million, or $0.04 per share, a return to profitability from a $0.00 EPS in Q1 2025 and a $61.1 million loss in Q2 2024.
Distributable EPS was $0.19, up from $0.17 in Q1, while Distributable EPS prior to charge-offs reached $0.45, compared to $0.42 previously. Dividends remained at $0.47 per share, yielding 9.7% annualized based on the July 29 share price of $19.36.
Total revenues were $133.9 million, with net income from loans and investments at $94.8 million after $264.7 million in interest expenses. The balance sheet showed total assets of $20.6 billion, including $19.0 billion in net loans receivable after CECL reserves.
Equity stood at $3.6 billion, with book value per share declining to $21.04 from $21.42 in Q1, reflecting $4.39 per share in reserves. Liquidity was strong at $1.1 billion, with a 3.8x debt-to-equity ratio.
The portfolio grew to $18.4 billion across 144 loans, up $1.4 billion over two quarters, with 82% of Q2 originations in multifamily and industrial sectors, and 68% international. Office exposure dropped to 28% from 36% year-over-year.
Impaired loans fell 55% from peak to $1.0 billion, with $0.2 billion resolved above carrying value. CECL reserves held steady at $755 million (3.8% of principal), and portfolio performance was 94%.
Chimera Investment Corp. (CIM)
Chimera Investment Corporation is a real estate investment trust (REIT) that is a specialty finance company. The company’s primary business is in investing through subsidiaries in a diversified portfolio of mortgage assets, including residential mortgage loans, Non-Agency RMBS, Agency CMBS, and other real estate related securities.
Chimera’s income is predominantly obtained by the difference between the income the company earns on its assets and financing and hedging costs.
The company funds the purchase of assets through several funding sources: asset securitization, repurchase agreements (repo), warehouse lines, and equity capital.
In early August, Chimera released (8/6/25) results for the second quarter of fiscal 2025. Its core earnings-per-share dipped -5% sequentially, from $0.41 to $0.39, due to lower net interest income and higher provisions for credit losses.
Chimera missed the analysts’ consensus by $0.05. Book value per share decreased -1%.
Chimera has been facing a strong headwind from the surge of interest rates to nearly 23-year highs. An unexpected increase in interest rates is a strong headwind for Chimera, as it exerts great pressure on its margins, i.e., the difference between lending and borrowing rates, without allowing the company to hedge its rates.
PennyMac Mortgage Investment Trust (PMT)
PennyMac Mortgage Investment Trust invests in residential mortgage loans and mortgage-related assets. The trust focuses on creating mortgage-related assets through its correspondent production activities, which includes mortgage servicing rights.
PMT has three segments: credit sensitive strategies, interest rate sensitive strategies and correspondent production. PennyMac Mortgage began its operations in 2009 with $324 million of assets, which has grown to $14.9 billion as of March 31st, 2025.
PMT is externally managed by PNMAC Capital Management, which itself is a wholly owned subsidiary of PennyMac Financial Services (PFSI). As a result of being externally managed, PMT has only one employee on record.
PennyMac Mortgage Investment Trust reported second quarter 2025 results on July 22nd, 2025, for the period ending June 30th, 2025. PMT reported net investment income of $70.2 million, which was a 1.4% decrease from NII of $71.2 million in the prior year quarter.
The trust generated a ($0.04) loss per share in the quarter, which compares unfavorably to the $0.17 earned in the year-ago quarter. The book value per share decreased from $15.43 on March 31st, 2025 to $15.00 on June 30th, 2025.
Disclosure: No positions in any stocks mentioned
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul.