Dynex Series C: On My Watchlist, But The Price Level Isn't Right Just Yet

Pearl Gray Equity and Research4.79K FollowersFollow5ShareSavePlay(9min)CommentsSummaryDynex Capital, Inc. 6.9% Series C Preferred is on my watchlist, as I believe its floating-rate reset adds appeal to investors interested in moving up the capital structure.DX’s underlying operations are robust, with a 1.17x assets/liabilities ratio, $2.49 net income per share, and a sustainable net interest margin of ~21.43%.I expect investors to move up the capital structure toward preferreds when credit risk normalizes, but I will wait for a material discount before engaging.RMBS market risks, rising delinquencies, and complacent credit spreads warrant caution, suggesting better entry points may emerge in DX.PR.C after cyclical normalization.stanciuc/iStock via Getty Images This article discusses Dynex Capital, Inc. 6.9% SER C PFD (DX.PR.C), which is a preferred share issuance, by Dynex Capital (DX), a mortgage REIT whose ordinary shares I've applauded for quite some time. I think weThis article was written byPearl Gray Equity and Research4.79K FollowersFollowPearl Gray is a proprietary investment fund and independent market research firm. We primarily focus on Fixed-Income and Capital Flows. However, our Seeking Alpha readers can expect a cross-asset blend, extending to analysis of equity REITs (including Preferred Shares), Investment Fund Appraisal, and Bank Risk Analysis.Kindly note that our published content is dispensed as Independent Analysis and Doesn't Constitute Financial Advice. For any content-related concerns, contact Steve Booyens, CFA, FRM on LinkedIn or leave a message in the comments section.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Kindly note that our content on Seeking Alpha and other platforms doesn't constitute financial advice. Instead, we set the tone for a discussion panel among subscribers. As such, we encourage you to consult a registered financial advisor before committing capital to financial instruments.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.