American Capital Ltd. (ACAS) Earnings: An Early Look

One of American Capital’s most exciting opportunities in recent years has come from its management of mortgage REITs, with American Capital Agency Corp. (NASDAQ:AGNC) long sporting double-digit dividend yields from selling agency-backed securities, while the newer American Capital Mortgage Investment Crp (NASDAQ:MTGE) also invests in other types of mortgage securities. Yet as the Fed’s intervention in mortgage-backed securities markets has raised concerns about the sustainability of the mortgage-REIT business model, the fact that American Capital also acts partially like a private equity firm and partially as a pure business development company arguably gives shareholders greater diversification.

In its quarterly report, look for American Capital to give useful updates on where it’s investing capital and where it sees its best opportunities going forward. As hard as it is to parse out American Capital’s diverse business activity, it’s a useful gauge for what’s happening both in the mortgage-credit markets, as well as smaller-business financing.

The article American Capital Earnings: An Early Look originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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