Back to top

Image: Bigstock

Key Factors to Impact MFA Financial's (MFA) Q4 Earnings

Read MoreHide Full Article

MFA Financial, Inc. (MFA - Free Report) is scheduled to report fourth-quarter and full-year 2019 results on Feb 20, before the opening bell. The company’s earnings are likely to reflect a year-over-year increase, while revenues might display a marginal decline.

In the last reported quarter, this mortgage real estate investment trust (REIT) posted core earnings of 20 cents per share, delivering a positive earnings surprise of 11.1%. Results were backed by growing contributions from the company’s whole loan portfolio.

Over the last four quarters, the company’s earnings beat the Zacks Consensus Estimate on two occasions for as many misses, the average negative surprise being 1.72%. The graph below depicts this surprise history:

MFA Financial, Inc. Price and EPS Surprise
 

MFA Financial, Inc. Price and EPS Surprise

MFA Financial, Inc. price-eps-surprise | MFA Financial, Inc. Quote

Let’s see how things are shaping up prior to this announcement.

In the fourth quarter, the company is expected to have increased investments in purchased performing loans, specially Non-QM, fix and flip and single-family rental. The company is likely to have continued execution of strategic sales of legacy Non-Agency MBS during this period.

Further, the company is expected to have opted for the use of additional leverage including securitization. Notably, it focuses on credit risk over interest rate risk and the company’s funding costs are expected to have benefited from falling short-term rates. However, market conditions were challenging, which might have clipped top-line growth.

Amid these, the Zacks Consensus Estimate for the quarterly earnings is currently pinned at 20 cents, indicating an increase from the 13 cents reported in the year-ago period and no change sequentially.

Moreover, the Zacks Consensus Estimate for the October-December quarter net interest income is currently pinned at $61.1 million, suggesting a 7.2% sequential increase but down 1.1% year on year.

However, MFA Financial’s activities during the December-end quarter were inadequate to gain analyst confidence. The Zacks Consensus Estimate for the fourth-quarter earnings remained unchanged at 20 cents in a month’s time.

Here is what our quantitative model predicts:

Our proven model does not conclusively predict an earnings beat for MFA Financial this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which is not the case here as you will see below.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MFA Financial currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of +3.28%.

Stocks That Warrant a Look:

Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:

Ventas, Inc. (VTR - Free Report) , slated to report fourth-quarter results on Feb 20, has an Earnings ESP of +0.81% and holds a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Jernigan Capital, Inc. , scheduled to release earnings on Feb 26, has an Earnings ESP of +4.35% and currently carries a Zacks Rank of 3.

Urstadt Biddle Properties Inc. , expected to release quarterly numbers around Mar 13, has an Earnings ESP of +1.41% and carries a Zacks Rank of 3, currently.

Free: Zacks’ Single Best Stock Set to Double

Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.

See 5 Stocks Set to Double>>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Ventas, Inc. (VTR) - $25 value - yours FREE >>

MFA Financial, Inc. (MFA) - $25 value - yours FREE >>

Published in