Rithm Capital preferred shares RITM-D currently offer a trailing dividend yield of about 7%. A scheduled rate reset could lift the estimated yield to 10.84%, based on recent five-year U.S. Treasury rates, with the new rate expected to take effect in the first quarter of 2027. The estimate is not a company-confirmed dividend rate, and the shares could be redeemed, both of which leave the timing and realized return uncertain.
Investor reports a holding of 11,034 shares
The author says they began buying RITM-D on Sept. 16, 2021, and hold the shares across two accounts. The disclosed position totals 11,034 shares, valued at about $276,070.68 using a price of $25.02 per share. The author describes it as the largest position in their portfolio and substantially larger than their other investments in this type of security.
Greater investor attention to the reset could support RITM-D’s price, the author argues. But the new rate is not due to take effect until the first quarter of 2027, and Rithm is expected to announce the dividend after that quarter begins. It remains unclear when the market will reflect the change in its pricing, although some investors may trade on the expectation ahead of the announcement.
Reset estimate tops yields on Rithm’s other preferreds
RITM-D’s dividend will reset against the five-year U.S. Treasury rate. Applying recent Treasury yields produces an estimated post-reset yield of 10.84%, 54.5% above the current relevant level. This is a calculation based on prevailing rates, not a final dividend announced by the company.
For comparison, using recent three-month SOFR to estimate resets for Rithm Capital’s other floating-rate preferred shares gives ex-accrued-dividend yields of about 10.28% for RITM-A, 10.25% for RITM-B and 10.24% for RITM-C. At an unchanged share price, the estimated RITM-D yield would be higher than those figures. Price movements can alter yields, while the actual dividend will depend on the formal reset terms and company announcement.
Positive yield to call, but no assured return
RITM-D’s current yield to call is still positive, at about 6.4% annualized. For someone buying at the current price and holding until redemption, the result would depend on the redemption price and timing. The author says a 6.4% annualized yield does not automatically imply a loss, even if the shares have not risen to a price that would produce a negative yield to call. The calculation is not a guarantee of return.
As market comparisons, the author cites approximate yields to call of negative 3.9% for Annaly Capital Management’s NLY-F, negative 17.7% for Dynex Capital’s DX-C and negative 2.9% for AGNC Investment’s AGNCN. Preferred shares trading above their redemption price can incur a loss if called; a negative yield to call does not represent the cash dividends received while holding the shares. These figures are estimates from around the article’s publication and may have changed.
Earliest potential call shifts into December
RITM-D could originally have been called on Nov. 15, 2026, but redemption requires 30 days’ advance notice. On that basis, the author concludes that the earliest potential call date has moved to early December. If the shares are redeemed, investors might receive dividends briefly at the old 7% rate; what follows depends on whether the shares remain outstanding and on the new rate terms.
The key uncertainties extend beyond the estimated dividend: whether Rithm calls the shares, when the market prices in the reset and how the market price compares with the redemption price. The author says they continue to trade actively in the sector and that their holdings may change at any time. Their position and views do not indicate how RITM-D will perform.
Charts cover mortgage REITs and BDCs
The article also compares common shares, preferred shares and baby bonds issued by mortgage real estate investment trusts (mREITs) and business development companies (BDCs). The metrics include dividend yields, earnings, book value or net asset value, bond yields to maturity and years remaining to maturity. Companies covered include AGNC, Annaly, Dynex, Rithm, Ellington Financial, MFA Financial, PennyMac Mortgage Investment Trust, Main Street Capital and Ares Capital.
A separate chart compares mREIT book values through the third quarter of 2026; data are left blank for companies that had not yet reported results. Other charts continue to use second-quarter 2026 book values. Among preferred shares, fixed-to-floating (FTF) securities move from a fixed rate to a floating rate based on SOFR. Fixed-to-reset (FTR) securities reset against the five-year U.S. Treasury rate plus a contractual spread, typically every five years thereafter. The article notes that PMT-A and PMT-B began accruing floating-rate dividends on March 15 and June 15, 2024, respectively, but the dividends actually paid did not change.