Today’s dividend: New Residential Investment Corp

Considering most of my dividends fall into the less-than-a-buck bucket, it’s always nice when it comes time for New Residential Investment Corp. (NRZ) to pay up. Today, the mortgage REIT was nice enough to toss a $10 dividend my way.

Unlike most of the companies in my Dividend Farm, NRZ isn’t a growth stock … not even a little bit. The share price and dividend pretty much stay parked right where they’re at.

That’s not necessarily a bad thing, though. You see, when dividend growers make up a big part of your portfolio – as is the case with mine – it’s always nice to have a few high-yield stocks to keep that cash flow, well, flowin’. Most growers – the ones that raise their dividends by 10, 20 and even 30% each and every year – have pretty low yields.

NRZ, a company I own 20 shares of, doesn’t have that problem.

A tale of two dividends

I own NRZ for a very specific reason. One of the best ways to show you that reason is to compare it to another stock in my portfolio.

One of my favorite dividend-growth stocks is UnitedHealth (UNH). It took a bit of a hit today, but stocks tend to do that from time to time. Everyone, as expected, overreacted when Amazon, Berkshire Hathaway and Chase announced a joint venture to drive down healthcare costs. It’ll bounce back, though. It’s a shining example of the type of company I like to invest in. The financials are super solid and it’s invested heavily in technology in an effort to stay competitive in the future.

UNH was trading at $236.65 a share at today’s close. It pays a $3 annualized dividend, which represents a 1.21% yield. It’s also boosted its dividend for eight straight years – a track record which includes a 29.25% growth rate over the course of the last five. It doesn’t get much better than that, folks. Throw in the fact my one share is up $74.39 (45.75%) in the one year I’ve held it and you have a real winner.

The problem, though, is it’s super expensive for a small-time investor like myself. I don’t have $2,300 to pick up 10 shares of UNH. I just don’t.

NRZ, meanwhile, is an entirely different stock. Trading at just north of $17 a share, you can scoop up 10 shares for less than $200. It’s only been paying a dividend for four years and, while it did boost its payment each of the last couple, it only raised it by $0.02. The thing is, though, it doesn’t need to boost its dividend. It already has a ridiculous 11.40% yield.

I don’t need any raises to keep me happy … just more of the same from NRZ.

So, what’s the point?

I guess the point I’m trying to make is, while dividend-growth stocks are where it’s at, I’m a fan of having a few high-yield stocks in my portfolio as well. In my far-from-expert opinion, you can’t go wrong buying a share of UNH if you have a extra $240 laying around. It’s a great stock even though that $240 will only earn you $3 in dividend income per year.

At the same time, I see nothing wrong with throwing that same $240 at NRZ. You’ll get nearly 14 shares for that amount of cash – shares that will produce $28 of income thanks to the company’s $2 annualized dividend. Don’t count on growth, but if cash is your thing, NRZ might be for you. I’m no math wiz, but I know $28 is a lot more than $3 … and it could turn out to be an even bigger gap when reinvested.

Today marked the seventh straight day the market was open in which I either earned a dividend or made a purchase. The $10 dividend from NRZ brought my January total to $34.70.

Here’s Monday’s post just in case you missed it.

Until tomorrow, March on!

4 Responses to “Today’s dividend: New Residential Investment Corp

  • dollabuzz
    3 weeks ago

    i opened a Roth and a good portion of it is reits.. 5 true reits and MNR..i dont have exposure to reits in my 401k so overall this is a very small position but I like high yields offered…my 401k has F, BAC, AAPL..F is juicy as it approaches $11 and hopefully BAC and AAPL increase their divys this year..

    • Nice, man. I’ve been bulking up my Ford position recently. It’s cheap and the 5% yield is icing on the cake. I like BAC and AAPL, too. Last couple days added an opportunity to add to AAPL, but I didn’t take advantage. Keep up the good work.

  • Love NRZ it’s my highest payout for now at about 106.
    Of course that will continue to grow and grow. Of course the other companies are good also as they give you the raises that also help get you close to fire. Keep

Leave a Reply

%d bloggers like this: