Get Paid Monthly By Dynex Capital Inc
For the most part, real estate investment trusts (REITs) like Dynex Capital Inc (NYSE:DX) have performed well over the last year. That doesn’t mean there haven’t been some turbulent times.
REITs fell out of favor for a period on concerns about how higher interest rates in 2024 and 2025 would weight on borrowing costs and property values. The broader markets also took a hit after President Trump announced his global tariffs back in April 2025 and the U.S. began shelling Iran in late February. The stock market rebounded on both occasions.
More recently though, interest rates have been coming down and have been in a range of 3.5% to 3.75% for two consecutive meetings. Policymakers except the Federal Reserve to lower its overnight lending rate, which impacts interest rates, one more time this year and again in 2027.
Lower interest rates make it less expensive to borrow and service debt. Moreover, the U.S. housing market remains solid and the average 30-year fixed mortgage rates remains above six percent.
All of those tailwinds are great for Dynex Capital Inc.
Virginia-based Dynex Capital, Inc is a mREIT that invests primarily in residential mortgage-backed securities (RMBSs), commercial mortgage-backed securities (CMBS), and CMBS interest-only (IO) securities. The company’s current portfolio is 95% agency RMBS. (Source: “First Quarter 2026 Earnings Presentation,” Dynex Capital Inc, April 20, 2026.)
This high concentration of RMBS investments helps provide it with balanced income generation and capital preservation. This is due in part to the fact that RMBS securities are backed by government-sponsored entities, which provides it with a level of security and stability.
After an “outstanding” 2025, the company’s momentum carried into the first quarter of 2026. Though at first blush it might not appear that way. It reported total economic return of a loss of $0.34 per share, or a loss of 2.5% of book valued. Book value per share as of March 31, 2026 was $12.60. (Source: “Dynex Capital, Inc. Announces First Quarter 2026 Results,” Dynex Capital, Inc., October 20, 2025.)
During the quarter it raised equity capital of $442 million and purchased $6.0 billion in investments.
Management noted that interest income continues to increase as higher yielding assets have been added to its portfolio. On top of that, financing costs continue to trend lower and hedges continue to be supportive of portfolio returns.
Commenting on the results, Smriti Popenoe, Co-CEO and President, said, “Dynex entered 2026 from a position of strength, building on the momentum of an outstanding 2025 through disciplined execution and rigorous risk management.”
“Navigating periods like the first quarter with discipline remains a core strength of the Dynex team. Current asset returns continue to support healthy long-term performance, and we believe our growing scale and consistent execution position us to deliver durable value for our shareholders.”
Declares Monthly Dividend of $0.17/Share
As a mREIT, Dynex has to legally distribute at least 90% of its taxable earnings to shareholders as dividends. Better still, unlike the vast majority of dividend stocks, Dynex distributes its payouts monthly. And that payout has been on the rise of late.
In November 2024 it increased its monthly distribution from $0.13 per share to $0.15 per share. For March 2025, the company’s Board increased the monthly distribution again to $0.17 per share. It has held it there since then. This works out to an annual distribution of $2.04 per share, for a massive dividend yield of 14.87%. (Source: “Dynex Capital, Inc. Declares Monthly Common Stock Dividend of $0.17,” Dynex Capital, Inc. April 13, 2026.)
That ultra-high dividend yield isn’t a result of a lower share price. The company’s trailing annual dividend yield is 14.87% and the 5-year average dividend yield is 12.11%.
DX Shares Thumping The Broader Market
The S&P 500 has been having a pretty solid year. Trading at record levels, the index is up nine percent over the last month, 3.5% year to date and 37% on an annual basis. Great numbers, but not as good as DX.
As of this April 21, writing, DX shares are up:
- 13% over the last month
- 3.6% year to date
- 41% over the last 12 months
Chart courtesy of StockCharts.com
The Lowdown on Dynex Capital Inc.
Listed on the NYSE in 1989, DX is the longest tenured mREIT on Wall Street. Over the years it has provided investors with solid capital appreciation. On the dividend and stock fronts, the company’s disciplined investment process has allowed Dynex to outperform the S&P 500 Financials and iShares Mortgage Real Estate ETF.
Outperforming the markets is what shareholders and institutional investors are looking for. Currently, 327 institutions hold 37.56% of all outstanding shares. The three biggest holders are Blackrock Inc., Vanguard Group Inc, and Geode Capital Management, LLC.