MFA Financial, Inc. ( MFA - Snapshot Report ) a real estate investment trust (REIT), recently hiked its quarterly cash dividend by $0.235 to $0.25 per share.This reflects a 6.4% increase from the company’s prior dividend payout. The increased dividend will be paid on July 29, 2011, to stockholders of record as of June 14, 2011.This increase in quarterly dividend takes the annual dividend yield, as of July 5, 2011, to 12.2%.

At the end of first quarter 2011, MFA Financial cash balance stood at $629.4 million. We believe the company has enough cash and cash equivalents to provide optimum shareholder value.

During the first quarter of 2011, MFA Financial generated net income of $80.8 million, or 27 cents per share compared with $80.6 million or 29 cents per share.

MFA Financial primarily invests in portfolios of both Agency and non-Agency residential mortgage-backed securities.The company’s residential mortgage backed securities (RMBS) portfolio consists of hybrid adjustable-rate, adjustable-rate and fixed-rate residential mortgage-backed securities issued or guaranteed by US. Government-chartered entities. The company expects that approximately 60% of its core earnings will be generated through Non-Agency mortgage backed securities in the second quarter of 2011.

MFA Financial currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Capstead Mortgage Corp. ( CMO - Snapshot Report ) currently retains a Zacks #3 Rank.