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MFA Financial Inc (MFA)
NYSE:MFA
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MFA Financial
(NYSE:MFA)
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Rating:61Neutral
Price Target:
$10.00
▼(-0.50% Downside)
The score is driven mainly by improved profitability and cash generation, tempered by materially higher balance-sheet leverage (a key risk for mortgage REITs). Technicals are mildly supportive with price above major averages and neutral momentum. Valuation is helped by a moderate P/E and very high dividend yield, while the latest earnings call was mixed due to weaker distributable earnings from credit losses despite operational initiatives and book value disclosures.
Positive Factors
Asset Growth
The increase in assets reflects MFA's ability to expand its portfolio, enhancing its capacity to generate income and improve long-term financial stability.
Successful Securitizations
Successful securitizations demonstrate MFA's effective capital management and ability to leverage its assets, supporting liquidity and financial performance.
Dividend Stability
Stable dividends indicate a commitment to returning value to shareholders, enhancing investor confidence and supporting long-term investment appeal.
Negative Factors
Economic Book Value Decline
A decline in economic book value suggests potential challenges in asset valuation and profitability, impacting the company's financial health and investor perception.
Increased Delinquencies
Rising delinquencies can signal deteriorating asset quality, potentially leading to higher credit losses and affecting long-term financial performance.
Challenges in Loan Origination
Lower-than-expected loan origination may indicate operational challenges, limiting growth opportunities and affecting revenue generation in the long term.
MFA Financial (MFA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.03B
Dividend Yield14.9%
Average Volume (3M)1.40M
Price to Earnings (P/E)7.8
Beta (1Y)0.50
Revenue Growth5.52%
EPS Growth-47.72%
CountryUS
Employees348
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.27
Shares Outstanding102,195,700
10 Day Avg. Volume1,207,445
30 Day Avg. Volume1,395,946
Financial Highlights & Ratios
PEG Ratio0.11
Price to Book (P/B)0.57
Price to Sales (P/S)3.77
P/FCF Ratio5.27
Enterprise Value/Market Cap0.79
Enterprise Value/Revenue2.19
Enterprise Value/Gross Profit1.86
Enterprise Value/Ebitda2.39
Forecast
1Y Price Target
$10.00Price Target Upside-0.50% Downside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
MFA Financial Business Overview & Revenue Model
Company DescriptionMFA Financial, Inc., together with its subsidiaries, operates as a real estate investment trust (REIT) in the United States. The company invests in residential mortgage assets, including non-agency mortgage-backed securities (MBS), agency MBS, and credit risk transfer securities; residential whole loans, including purchased performing loans, purchased credit deteriorated, and non-performing loans; and mortgage servicing rights related assets. The company has elected to be taxed as a REIT and would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. MFA Financial, Inc. was incorporated in 1997 and is headquartered in New York, New York.
How the Company Makes MoneyMFA Financial makes money by investing in residential mortgage assets and earning income from these investments. The company's revenue model centers around acquiring and managing a portfolio of residential whole loans and mortgage-backed securities, which generate interest income. MFA leverages its expertise in managing mortgage credit risk to maximize returns. The company also benefits from the capital appreciation of its real estate assets. Additionally, MFA Financial engages in securitization and other financial transactions to enhance its liquidity and financial performance. Key revenue streams include interest income from mortgage investments, gains from the sale of mortgage-backed securities, and income generated from securitization activities. Significant partnerships with financial institutions and access to capital markets further contribute to its earnings and operational efficiency.
MFA Financial Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call balanced clear operational progress and constructive market tailwinds against lingering legacy credit issues and timing uncertainty. Management reported solid returns (3.1% Q4 TER, 9% FY TER), meaningful asset redeployments ($1.9B in Q4), significant cost reductions (~9.5% FY G&A decline), and multiple strategic initiatives at Lima One and across securitizations that should unlock capital and improve ROE. Headwinds include a Q4 uptick in delinquency driven by legacy multifamily defaults (portfolio held at a $42M discount), modest near‑term proceeds from preferred issuance, and temporary NII and credit volatility. Overall, the positives — improved market backdrop, active capital deployment, expense discipline and tangible near‑term liquidity levers — outweigh the remaining legacy credit and timing drawbacks.Q4-2025 Updates
Positive Updates
Strong Total Economic and Shareholder Returns
Total economic return (TER) of 3.1% in Q4 2025 and 9% for the full year; total shareholder return for 2025 of 6%. Management expects DE to reconverge with the dividend by back half of 2026.
Material Q4 Asset Deployment
Deployed $1.9 billion of loans and securities in Q4 2025, including $1.2 billion of Agency securities, $443 million of non‑QM loans, and $226 million of business purpose loans originated by Lima One to reduce cash drag and boost yield.
Agency Portfolio Expansion
Agency book grew by over 50% in the quarter to $3.3 billion; portfolio primarily ~5.5% coupons purchased at par or slight discount, giving potential low double‑digit ROE on levered agency investments.
Non‑QM Portfolio Scale and Acquisitions
Non‑QM whole loan portfolio remains largest asset class at $5.3 billion. Acquired $443 million of new non‑QM loans in Q4 with average coupon ~7.3% and average LTV just under 69%.
Progress and Growth Initiatives at Lima One
Lima One originated $226 million in Q4 (including $83M construction, $48M rehab, $25M bridge, $70M rental term), produced $5.7 million of mortgage banking income, sold $45M of term loans generating $1.4M gain; hired 45 new salespeople, launched wholesale channel, and plans to relaunch multifamily lending — positioning for material back‑half 2026 growth.
Expense Reductions and Improved Efficiency
Full‑year G&A fell to $119.4 million from $131.9 million in 2024 (approximately ‑9.5%). Quarterly G&A improved to $27 million in Q4 from ~$29 million in Q3 (≈‑6.9%). Management expects further run‑rate reductions in 2026.
Capital Actions to Enhance Common Returns
Used an ATM to sell preferred shares (Series C and B) and deployed proceeds to repurchase ~540,000 common shares at a weighted average ~33% discount to economic book value; buyback program reauthorized by Board to continue when windows open.
Securitization and Liquidity Opportunities
Completed 21st non‑QM securitization in December ($424 million bonds at average cost 5.26%). Management has $2.3 billion of currently callable securitized debt and expects calling/re‑issuing to unlock liquidity — management cited potential to free $50M–$100M of capital in coming quarters to redeploy at mid‑teen ROEs.
Book Value and Post‑Quarter Improvement
GAAP book value of $13.20 and economic book value of $13.75 at December 31; management estimates economic book value up ~3% since year‑end.
Favorable Macro Environment for Mortgages
2025 saw lower rates and volatility and a positively sloped yield curve: Fed cuts late 2024 and into 2025, 2‑year yields down ~77 bps, 10‑year yields down ~39 bps, 2‑10 spread (210) steepened from 32 bps to 70 bps, and MOVE index declined to under 64 — all supportive tailwinds for the mortgage market.
Negative Updates
Credit and Delinquency Pressure in Legacy Multifamily
Overall loan delinquency ended 2025 just over 7% (down from 7.5% a year earlier) but increased ~30 basis points in Q4 driven by defaults in the legacy multifamily transitional portfolio; that legacy book is accounted for at a $42 million discount to par, with remaining timing and losses uncertain.
Net Interest Income Decline
Net interest income in Q4 was $55.5 million, a modest decline from $56.8 million in Q3 (≈‑2.3%), primarily due to lower yields on legacy RPL/NPL loans and interest reversals tied to increased nonaccrual loans in the multifamily transitional portfolio.
Credit‑Related Charges and Nonaccruals Impacting Distributable Earnings
Distributable earnings (DE) were $0.27 per share in Q4 (up from $0.20 in Q3), helped by $0.09 lower credit‑related charges versus prior quarter, but ongoing credit realizations and timing remain a headwind and introduce earnings variability until runoff completes.
Lima One Seasonality and Timing of Growth Benefits
Lima origination volumes were seasonally lower in Q4 and many growth initiatives (wholesale channel, multifamily relaunch, technology investments) were just coming online; management noted results from these investments will take quarters to fully show in financials, with most upside expected in back half of 2026.
Limited Preferred Issuance Proceeds to Date
Preferred issuance in Q4 generated only ~ $5 million of proceeds (sold ~163k Series C and ~53k Series B) — accretive strategy but modest in scale so far, limiting near‑term magnitude of repurchases.
Tightening Agency Spreads and Policy Effects
Purchases of agency securities slowed after late‑2025 spread tightening (and with GSE purchase programs announced), reducing near‑term agency deployment opportunities despite attractive low double‑digit ROE potential when available.
Potential One‑Time Costs Related to Expense Cuts
Management noted that some G&A reductions may involve severance or timing issues and therefore realization of full run‑rate benefits could be offset by one‑time charges depending on timing.
Company Guidance
Management guided that they expect distributable earnings (DE) to reconverge with the $1.44 annual common dividend (about a 10.5% dividend on book value) in the back half of 2026, with DE running from roughly 8–9% in 2025 toward about 10–11% by late‑2026 and redeployed capital targeted to earn mid‑teens ROEs; they highlighted tangible near‑term liquidity and capital actions (over $100M of excess cash already deployed, $1.9B of Q4 purchases including $1.2B agencies, $443M non‑QM, Lima One originations of $226M) and said calling/re‑securitizing several deals (about $2.3B of currently callable securitized debt) could unlock $50–100M of capital this year, noting they resolved >$150M of delinquent loans in Q4 that can be redeployed at mid‑teen ROEs; operational targets include further G&A reductions (2025 G&A $119.4M vs $131.9M in 2024, ~9.5% decline), continued Lima One growth (Q4 mortgage banking income $5.7M) and ongoing preferred issuances (sold ~163k Series C / ~53k Series B for ~$5M) to fund accretive common buybacks (~540k shares repurchased at a ~33% discount to economic book value).MFA Financial Financial Statement Overview
Summary
Income and cash flow show a clear recovery (TTM net income ~$128M; TTM FCF ~$150M with ~1.0x conversion), but results have been volatile across years. The biggest constraint is the balance sheet: leverage is high and rising (TTM debt-to-equity ~5.4x), increasing sensitivity to funding costs and asset-value swings for a mortgage REIT.Income Statement
Profitability improved meaningfully after the 2022 loss, with TTM (Trailing-Twelve-Months) net income of ~$128M and strong revenue growth (~69.5% TTM). Margins appear very strong in the most recent period, but results have been volatile across years (including negative revenue/profits in 2022 and 2020), which reduces confidence in the earnings trajectory and stability.62
Positive
Balance Sheet
Leverage is high and rising, with TTM (Trailing-Twelve-Months) debt-to-equity around ~5.4x (up from ~2.6x in 2023), which increases sensitivity to funding costs and asset-value swings—an important risk for a mortgage REIT. Equity has been relatively steady (~$1.8–2.5B range) and recent return on equity is positive (~7% TTM), but the capital structure is still meaningfully debt-heavy versus prior years.44
Neutral
Cash Flow
Cash generation looks supportive: operating cash flow is positive in every period shown, and TTM (Trailing-Twelve-Months) free cash flow is ~$150M with free cash flow matching net income (conversion ~1.0x). However, operating cash flow is down versus 2024 (~$200M) and cash flow growth has been choppy year-to-year, signaling variability in underlying cash generation.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 371.82M | 279.61M | 234.05M | -67.62M | 337.22M | -555.87M |
| Gross Profit | 438.10M | 244.30M | 199.91M | -110.52M | 299.75M | -555.87M |
| EBITDA | 341.50M | 0.00 | 0.00 | 0.00 | 433.02M | 0.00 |
| Net Income | 128.17M | 119.25M | 80.16M | -231.58M | 328.87M | -679.39M |
Balance Sheet | ||||||
| Total Assets | 12.10B | 11.41B | 10.77B | 9.11B | 9.14B | 6.93B |
| Cash, Cash Equivalents and Short-Term Investments | 305.17M | 338.93M | 318.00M | 334.18M | 304.70M | 814.35M |
| Total Debt | 6.60B | 9.20B | 5.00B | 6.86B | 3.15B | 1.84B |
| Total Liabilities | 10.28B | 9.57B | 8.87B | 7.12B | 6.60B | 4.41B |
| Stockholders Equity | 1.82B | 1.84B | 1.90B | 1.99B | 2.54B | 2.52B |
Cash Flow | ||||||
| Free Cash Flow | 150.07M | 200.12M | 108.74M | 365.78M | 108.25M | 33.53M |
| Operating Cash Flow | 150.07M | 200.12M | 108.74M | 366.08M | 120.29M | 38.40M |
| Investing Cash Flow | -795.83M | -424.60M | -1.55B | -1.13B | -2.17B | 6.38B |
| Financing Cash Flow | 679.82M | 337.58M | 1.43B | 850.21M | 1.63B | -5.74B |
MFA Financial Technical Analysis
Positive
10.05
Price Trends
9.73
Positive
9.47
Positive
9.30
Positive
Market Momentum
0.06
Negative
59.51
Neutral
74.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MFA, the sentiment is Positive. The current price of 10.05 is above the 20-day moving average (MA) of 9.84, above the 50-day MA of 9.73, and above the 200-day MA of 9.30, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 59.51 is Neutral, neither overbought nor oversold. The STOCH value of 74.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MFA.
MFA Financial Risk Analysis
MFA Financial disclosed 66 risk factors in its most recent earnings report. MFA Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MFA Financial Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
63 Neutral | $1.14B | 6.08 | 15.59% | 20.03% | 72.30% | -54.02% | |
61 Neutral | $1.03B | 7.75 | 9.60% | 14.90% | 5.52% | -47.72% | |
61 Neutral | $708.35M | 13.56 | 5.25% | 13.31% | -0.93% | -1.92% | |
55 Neutral | $1.08B | 12.61 | 6.67% | 12.69% | -15.48% | -36.45% | |
53 Neutral | $1.15B | 8.01 | 9.04% | 11.40% | 9.46% | -111.44% | |
45 Neutral | $1.18B | ― | -23.25% | 14.29% | 22.48% | 50.49% |
* Real Estate Sector Average
MFA
MFA Financial
10.05
0.84
9.06%
CIM
Chimera Investment
13.59
0.93
7.33%
TWO
Two Harbors
11.16
-0.82
-6.84%
PMT
PennyMac Mortgage
12.35
-0.04
-0.29%
ORC
Orchid Island Capital
7.49
0.16
2.18%
FBRT
Franklin BSP Realty Trust
8.88
-3.05
-25.58%
MFA Financial Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
MFA Financial Reports Q3 2025 Financial Results
Neutral
Nov 6, 2025
MFA Financial, Inc. announced its financial results for the third quarter ended September 30, 2025, reporting a GAAP net income of $37.3 million and distributable earnings of $21.0 million. The company made significant progress by acquiring $1.2 billion in residential mortgage assets and securitizing $721 million of Non-QM loans. Despite credit losses from legacy loans, MFA is implementing strategies to improve future returns, including cost reductions and share repurchases.
The most recent analyst rating on (MFA) stock is a Buy with a $10.50 price target. To see the full list of analyst forecasts on MFA Financial stock, see the MFA Stock Forecast page.
Delistings and Listing ChangesRegulatory Filings and Compliance
MFA Financial Announces Stock Trading Blackout Period
Neutral
Oct 30, 2025
On October 30, 2025, MFA Financial, Inc. announced a blackout period for its directors and executive officers, restricting trading of the company’s common stock and Series B Preferred Stock from December 1 to December 5, 2025. This blackout period is due to the removal of these stocks as investment options under the company’s 401(k) Savings Plan, in compliance with the Sarbanes-Oxley Act and SEC regulations, impacting the ability of plan participants to manage their investments during this time.
The most recent analyst rating on (MFA) stock is a Buy with a $10.50 price target. To see the full list of analyst forecasts on MFA Financial stock, see the MFA Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.