Dynex Capital‘s (NYSE: DX) 19.4% forward dividend yield is one of the highest among mortgage real estate investment trusts (REITs). It also makes monthly rather than quarterly payouts.
Does this make it one of the best monthly dividend stocks?
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I wouldn’t go that far. Given its payout ratio exceeding 100% and a declining book value, I wouldn’t bank on Dynex as a “set-and-forget” way to generate double-digit returns.
How much in monthly dividend income can a $10,000 Dynex position generate?
Based on Dynex’s recent $10.50-per-share stock price, $10,000 buys you around 952 shares. Based on its current monthly dividend of $0.17 per share, this position would generate $161.84 in monthly income, or $1,942.08 annually.
Dynex has paid a monthly dividend of $0.17 per share for over a year; not only that, the mortgage REIT raised its dividend twice in a little over two years, from $0.13 to $0.17 per share. That said, look far enough back, and you’ll see a steady history of dividend cuts, book value erosion, and stock price declines.
Is Dynex’s dividend dependable?
As with other REITs specializing in mortgage-backed securities, the rising-rate environment has negatively affected Dynex’s performance. For Q3 2026, Dynex reported a negative total economic return, losing $1.48 per share, or 11.5% of its beginning book value, during the quarter. Although these losses were due to net changes in the fair value of Dynex’s portfolio, back these out and you’ll see that its adjusted earnings per share (earnings available for distribution (EAD)) of $0.38 last quarter were not enough to cover the $0.51 in per-share dividends paid.
That’s not to say that dividend cuts are imminent. Dynex has realized gains from tax hedges, not included in EAD. These total around $98 million for the current fiscal year. These could be used to help cover the shortfall.
However, if rates keep climbing and further devalue Dynex’s portfolio, poor performance may persist. Considering these caveats, skipping Dynex and its nearly 20% forward yield seems like the better move.
Should you buy stock in Dynex Capital right now?
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