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1. Company Snapshot

1.a. Company Description

MFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust (REIT) in the United States.The company invests in residential mortgage assets, including non-agency mortgage-backed securities (MBS), agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets.The company has elected to be taxed as a REIT and would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders.


MFA Financial, Inc.was incorporated in 1997 and is headquartered in New York, New York.

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1.b. Last Insights on MFA

MFA Financial's recent performance was negatively impacted by a net loss in Q4 2024, despite distributable earnings covering the dividend. The company's GAAP net income to common stockholders and participating securities was $(2.3) million, or $(0.02) per basic and diluted common share. Additionally, the company's Q4 2024 earnings fell short of the prior year's earnings of $0.49 per share.

1.c. Company Highlights

2. MFA Financial's Q3 2025 Earnings: A Mixed Bag

MFA Financial reported distributable earnings of $0.20 per share, missing estimates of $0.2744. The company's GAAP book value was $13.13 per share, and economic book value was $13.69 per share, both effectively unchanged from the end of June. Quarterly G&A expenses totaled $29 million, a $900,000 decline from last quarter, reflecting the company's ongoing expense reduction initiatives.

Publication Date: Nov -23

📋 Highlights
  • Economic Return:: Delivered 2.6% total economic return to shareholders, driven by strategic capital deployment and asset class reallocation.
  • Excess Capital Deployment:: Plan to invest $100 million in target assets, including $500 million in Agency MBS during Q3, aiming for mid-teens ROE.
  • Loan Origination Growth:: Lima One originated $260 million in business purpose loans (Q3), a 20% QoQ increase, with $200 million in high-yield single-family transitional loans.
  • Nonperforming Loan Resolution:: Reduced delinquent loans from $86M to $47M YTD 2025, generating $15M in gains from resolutions.
  • Expense Management:: Achieved 11% YTD decline in G&A expenses ($92.4M vs. $103.9M), with $29M in Q3 expenses, reflecting cost optimization efforts.

Business Segment Performance

Lima One, MFA's origination platform, reported strong originations of $260 million during the quarter, a 20% increase from the second quarter. This included $200 million of single-family transitional loans with an average coupon of over 10% and over $60 million of new rental loans with an average coupon of 7%. As Bryan Wulfsohn noted, "margins are healthy, with origination fees of 1-2 points and servicing strips on the back end."

Capital Deployment and Investment Strategy

MFA plans to invest its excess cash into target assets, including Agency MBS. The company acquired $1.2 billion of loans and securities in its target asset classes during the third quarter, and subsequently acquired an additional $900 million of Agency securities post-quarter end. With a leverage of around ±8% on its Agency MBS portfolio, MFA is using cleared swaps and SOFR futures to hedge the portfolio, allowing for redeployment of capital into higher-yielding assets.

Valuation and Outlook

With a P/B Ratio of 0.52 and an ROE of 7.0%, MFA Financial's valuation appears reasonable. Analysts estimate revenue growth of 8.5% next year. Considering the company's plans to deploy excess capital into target assets, potentially generating mid-teens ROE, and its efforts to resolve nonperforming loans, there may be upside to current valuations. However, the near-term pressure on distributable earnings and the challenges associated with resolving delinquent loans should be monitored.

3. NewsRoom

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October Readers Identified 10 Ideal "Safer" Dividends In 39 Dogs

Nov -19

Source: seekingalpha.com

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Bailard Inc. Raises Stock Position in MFA Financial, Inc. $MFA

Nov -15

Source: defenseworld.net

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MFA Financial, Inc. (MFA) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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MFA Financial, Inc. Announces Third Quarter 2025 Financial Results

Nov -06

Source: businesswire.com

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MFA Wealth Services Has $2.50 Million Stock Holdings in Microsoft Corporation $MSFT

Nov -03

Source: defenseworld.net

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14% Dividend Yield Is Not Enough

Oct -31

Source: seekingalpha.com

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MFA Wealth Services Increases Holdings in NVIDIA Corporation $NVDA

Oct -31

Source: defenseworld.net

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Amazon.com, Inc. $AMZN Shares Sold by MFA Wealth Services

Oct -29

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.36%)

6. Segments

Mortgage-Related Assets

Expected Growth: 7.03%

MFA Financial, Inc.'s 7.03% growth in Mortgage-Related Assets is driven by increasing demand for mortgage loans, low interest rates, and government-backed securities. Additionally, the company's diversified portfolio, efficient risk management, and strategic acquisitions have contributed to its growth.

Lima One

Expected Growth: 10.27%

Lima One's 10.27% growth is driven by increasing demand for business-purpose loans, expansion into new markets, and strategic partnerships. Additionally, MFA Financial's strong brand reputation, efficient operations, and favorable interest rate environment contribute to Lima One's growth momentum.

Corporate

Expected Growth: 7.4%

MFA Financial, Inc.'s 7.4% growth is driven by its diversified investment portfolio, strong risk management, and efficient capital allocation. The company's focus on residential whole loans and mortgage-backed securities has enabled it to capitalize on the growing demand for housing credit. Additionally, its disciplined approach to asset selection and hedging has helped to mitigate risks and enhance returns.

7. Detailed Products

Residential Whole Loans

MFA Financial, Inc. invests in residential whole loans, which are mortgage loans that are not securitized and are held in the company's portfolio.

Residential Mortgage-Backed Securities (RMBS)

MFA Financial, Inc. invests in RMBS, which are securities backed by pools of residential mortgage loans.

Non-Agency RMBS

MFA Financial, Inc. invests in non-agency RMBS, which are securities backed by pools of residential mortgage loans that are not guaranteed by government-sponsored entities.

Credit Risk Transfer (CRT) Securities

MFA Financial, Inc. invests in CRT securities, which are securities issued by government-sponsored entities to transfer credit risk to private investors.

8. MFA Financial, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MFA Financial, Inc. is medium due to the availability of alternative investment options for investors.

Bargaining Power Of Customers

The bargaining power of customers for MFA Financial, Inc. is low due to the company's diversified investor base and lack of concentration of ownership.

Bargaining Power Of Suppliers

The bargaining power of suppliers for MFA Financial, Inc. is low due to the company's ability to source mortgage-backed securities from a diverse range of suppliers.

Threat Of New Entrants

The threat of new entrants for MFA Financial, Inc. is high due to the relatively low barriers to entry in the mortgage REIT industry.

Intensity Of Rivalry

The intensity of rivalry for MFA Financial, Inc. is medium due to the presence of several established players in the mortgage REIT industry, but the company's diversified investment portfolio and strong management team help to mitigate this threat.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 72.48%
Debt Cost 8.15%
Equity Weight 27.52%
Equity Cost 14.56%
WACC 9.91%
Leverage 263.35%

11. Quality Control: MFA Financial, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
MFA Financial

A-Score: 6.5/10

Value: 7.8

Growth: 2.3

Quality: 7.9

Yield: 10.0

Momentum: 2.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
KKR Real Estate Finance Trust

A-Score: 6.3/10

Value: 8.1

Growth: 3.9

Quality: 6.2

Yield: 10.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Dynex Capital

A-Score: 6.0/10

Value: 2.7

Growth: 3.1

Quality: 5.8

Yield: 10.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Redwood Trust

A-Score: 6.0/10

Value: 6.8

Growth: 4.0

Quality: 6.0

Yield: 10.0

Momentum: 2.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Ellington Residential Mortgage REIT

A-Score: 5.7/10

Value: 4.5

Growth: 2.8

Quality: 5.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Cherry Hill Mortgage

A-Score: 5.5/10

Value: 8.9

Growth: 3.1

Quality: 4.5

Yield: 10.0

Momentum: 0.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.61$

Current Price

9.61$

Potential

-0.00%

Expected Cash-Flows