"MFA's dividend is not covered by current earnings. The company reported $0.20 per share in distributable earnings for Q3 2025 while paying out $0.36 per share in dividends. That's a payout ratio of 180%. Over the trailing twelve months, earnings totaled $1.12 per share against dividends of $1.44, yielding a payout ratio of 128.6%. Full-year 2024 showed improvement, with operating cash flow of $200.1 million covering the $176.7 million dividend obligation at 1.13x."
"MFA's balance sheet shows elevated leverage. As of Q3 2025, the company carried $6.60 billion in total debt against $1.82 billion in equity, producing a debt-to-equity ratio of 3.62x. That's down from 4.99x at year-end 2024, but still elevated for a mortgage REIT. Cash on hand totaled just $305 million, covering only 4.6% of total debt. The company's retained earnings remain deeply negative at -$1.88 billion, indicating cumulative losses exceed profits over time."
MFA Financial is a specialty finance REIT investing in residential mortgage loans and securities. The company has paid over $5 billion in dividends since its 1998 IPO and currently yields nearly 15%. Dividend payments have exceeded distributable earnings, with Q3 2025 distributable earnings of $0.20 per share versus $0.36 in dividends, a 180% payout. Trailing twelve-month earnings of $1.12 per share covered $1.44 in dividends, a 128.6% payout. Full-year 2024 operating cash flow covered dividends at 1.13x, but the first nine months of 2025 showed only 0.27x coverage. Balance-sheet leverage remains elevated, retained earnings are deeply negative, and cash is limited, creating elevated dividend risk.
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