Dynex Capital (NYSE:DX) closed at $10.85 on October 13 and has returned -18.2% over the last six months. The company, worth about $2.91 billion, buys government-backed mortgage bonds and borrows against them. Its trailing earnings multiple is 3.93, the lowest among the mortgage companies in the article's list, while the forward multiple is 7.88, implying analysts expect earnings to fall by roughly half. With price-to-book at 0.99 and return on equity at 18.23%, the article argues book value is the more reliable anchor, since the bonds are priced daily in a liquid market, while trailing earnings can be flattered or hurt by gains and losses on the portfolio.
Summary written by Upside AI from the original article. Read the source for full details.
Original headline: Dynex Capital (DX) Trades at 4 Times Last Year’s Earnings and 8 Times Next Year’s. Which is Right?
Read the original on Yahoo Finance ↗
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