A long-standing tenet of investing holds that the greater the risk, the greater the reward. But every investor has a different tolerance for accepting risk. One measure of a stock’s risk is its beta, or how it compares with the entire stock market. A beta of 1.0 is said to be on par with the general market. A beta above 1.0 carries a higher risk, while anything below 1.0 is a lower risk.
Mortgage REITs, also known as mREITs, are among the highest-yielding dividend stocks on Wall Street but often have high beta levels. Even the more well-known mREITs, such as Annaly Capital Management Inc. (NYSE:NLY), has a beta of 1.21, meaning its risk level is significantly higher than the general market.
