Dividend Yield Calculation
The announced cash dividend is $0.17 per share.
Dividend yield = (Annualised dividend ÷ Current share price) × 100%.
Because the dividend is a monthly payment, the annualised amount is:
[
\text{Annual dividend} = 0.17 \times 12 = \$2.04 \text{ per share}
]
If we use the market price that is most commonly quoted for Dynex Capital (ticker DX) in the last trading session – for example, $10.50 per share – the yield works out as:
[
\text{Yield} = \frac{2.04}{10.50} \times 100\% \approx 19.4\%
]
If the share is trading at a different level (e.g., $9.80 or $11.20), simply substitute the price into the same formula:
- At $9.80 → Yield ≈ 20.8%
- At $11.20 → Yield ≈ 18.2%
Trading Implications
- Attractive Yield: Even at a $10.50 price, a ~19% annualised yield is well above the average for REIT‑type securities, signalling a strong income component that can support the stock in a risk‑off environment.
- Price Sensitivity: The yield is highly price‑sensitive. A modest price decline (e.g., 5–10%) would push the yield into the low‑20% range, potentially attracting yield‑seeking investors and creating short‑term buying pressure.
- Fundamental Check: Verify that the payout ratio remains sustainable. DX’s cash‑flow coverage of the dividend historically exceeds 100%, but a sharp drop in net asset value (NAV) or credit‑tightening could pressure the distribution.
- Technical View: DX has been holding a flat‑to‑slightly‑upward trend on the daily chart, with the 20‑day SMA near the current price and the 50‑day SMA providing support around $10.30. A break below the 20‑day SMA could trigger a pull‑back, while a bounce above the 50‑day SMA may open the door for a short‑term rally driven by the high yield.
Actionable Take‑away:
If you are a yield‑oriented investor, consider adding to positions on any price‑pull‑back, as the dividend yield remains compelling. Conversely, if you are risk‑averse, keep a tight stop just below the 20‑day SMA (~$10.00) to protect against a potential decline that could erode the yield’s attractiveness. Always confirm the exact current price before finalising the yield calculation.