Dynex Capital, Inc. (DX) is a mortgage Real Estate Investment Trust (REIT), investing in mortgage-backed securities (MBS) in the US. The REIT’s portfolio consists of high-quality borrowers with only 2% of its MBS holdings yielding above 6%, highlights Nancy Zambell, editor-in-chief of Cabot Money Club.
The real estate industry is seeing its fundamentals improving, including rising home inventory, stabilizing housing prices, and declining mortgage rates. The 30-year fixed mortgage rate was around 6.17% in late 2025, down almost a percentage point for the full year.
For its third quarter, Dynex saw significant earnings growth, up 120.9% over the past year, an impressive improvement from its five-year average decline of 26.8% per year. Additionally, the REIT’s net profit margin jumped to 76.1%.
The REIT is trading at a below-industry P/E, 11.5x, and its investors enjoy a very attractive dividend yield, recently 14.9%. That’s fantastic cash flow, in addition to potential share appreciation.
