Over the past five years, the share prices of Annaly Capital Management and American Capital Agency haven't been huge movers. However, taking into account dividends, AGNC's total return has been over 260%, compared to 70% for Annaly shareholders. It has undoubtedly been a good time to be a shareholder of these mREITs -- but is the party coming to an end?

Investors are now focusing on the how these firms will be negatively affected if interest rates tick higher and balance sheet holdings drastically decline in value.

In this video, Motley Fool financial analysts David Hanson and Matt Koppenheffer discuss the industry and how long-term investors should view their holdings.

There's no question Annaly Capital's double-digit dividend is eye-catching. But can investors count on that payout sticking around? In The Motley Fool's premium research report on Annaly, senior analysts Ilan Moscovitz and Matt Koppenheffer uncover the key challenges the company faces and divulge three reasons investors may consider buying it. Simply click here now to claim your copy today!

Editor's Note: A previous version of this article misstated the returns of the two companies. The Fool regrets the error.


The article The Dark and Dangerous Side of mREITs originally appeared on Fool.com.

David Hanson has no position in any stocks mentioned. Matt Koppenheffer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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