Benefiting from a special tax structure, mREITs are able to avoid burdensome taxes by distributing 90% of corporate profits to shareholders in the form of dividends. These high dividend-yielding stocks, ranging from around 6% to 18% distribution rate have proven to be extremely attractive to investors. Many mREITs like MFA financial (MFA) and Invesco Mortage Capital Inc (IVR) have dividend rates of 10%  and 13% as well as 1 year stock growths of 23% and 30% respectively. Stockholders’ compounding of dividends combined with generally speaking attractive yields may result in continuous stock growth despite moments of economic uncertainty.

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it. – Albert Einstein

So it does seem as though mREITs are high-yielding investments. But one must wonder what are the risks? mREITs are able to turn profits by borrowing money at a certain rate, say 1%, and then lending it out at a higher rate, say 1.3%. These loans (mortgages) are backed by real estate securities, which allows them to leverage the amount borrowed by more than 5 times the amount of cash they have on hand. This means that a 0.1% increase in interest rates in the economy would lead to shrinking profit margins of many percentage points for leveraged mREITs. mREITs are profitable while interest rates are stable but can be extremely affected for the worst if interest rates rise or decline by too much. Profit losses for mREITs directly result in a cut in dividend yields, which is usually a SELL sign to investors.

One must therefore be wary of mREITs and keep in mind economic factors that may directly affect interest rates and therefore company performance. The Treasury’s recent quantitative easing policy is one to keep in mind…!

Microsoft executives say the recent release of tablet-friendly software Windows 8 is the beginning of a new generation of products. Since its release, new computers and computer designs have been becoming increasingly popular. For example, just last week Lenovo released its new laptop, the Ideapad Yoga 13, a 1.7Ghz ultrabook with an hd touch-capable screen that can be manipulated around 360 degrees. The idea behind these new laptop designs  is that they are as portable as macbook airs, one of apple’s best-selling computers, while integrating user-adored tablet features. This chimera of a laptop, like a blend between a macbook air and an ipad, bridges many consumers’ need for a piece of technology that is portable, fun, and even more importantly useful. Windows 8 is the bridge between work and fun, between gadget and productive capital.

Since the vast majority of pc makers rely on improvements in Microsoft software, windows 8 will most surely have a huge impact on the pc market. Considering pc makers are now designing and producing laptops with the same techspecs as Apple laptops except with high-quality touch screens and that Apple doesn’t have a touch screen laptop, could it be that for once Microsoft has the upper-edge?
In any case, there is no doubt touch screen laptops are the near future of the technology industry: would it be wise to consider investing in companies such as Lenovo ?

Since the 2010 oil spill BP’s stock has been staggering around $37-$45 despite posting outstanding third quarter profits and raising dividend by 14% to 5% a year. Most recently after their ex-dividend date BP’s stock dropped from $43 to under $40, or by more than 2.3%. The last time BP’s stock dropped below $40 was in August 2012, and shortly after it bumped up to $42.5 a share as its ex-date was approaching. BP, like most oil companies, can count on revenue well over $300 billion per year with increasing demand for oil through-out the world.

Although BP seems to be an ideal candidate for a long-term dividend investment with growth prospects, how much can the company’s stock actually grow? Like many other extremely profitable companies that are seen by investors as being toxic for the environment or for people (like RJR in the 1970s), BP’s stock may never reach price levels of $60-$70 like before the oil spill.

Sandstorm Gold’s market capitalisation broke $1 billion last week as the company’s stock price has been rocketing since early september. The company’s stock price has nearly tripled since it’s 52 week low of $5.32, reaching $14.99 on October 5th.

Sandstorm Gold is a gold streaming company, meaning they seek to provide financing to mining projects in exchange for a share of gold production delivered at a pre-determined and constant rate. Although this business model presents significant risks, such as investing in a project that may produce very little or no gold, it also presenst significant advantages: gold streaming has the potential to reap extraordinary revenues. For example, when Sandstorm Gold invests in a successful mining project, they are able to buy gold for a set rate of $450/oz (for example) and re-sell it on the global market for $1775/oz.

And yes, investors agree with you; this does sound like an effective method to generate profits! This is why the company’s stock has risen nearly 50% in the last month.

However, the quesiton is: is it too late to buy Sandstorm Gold’s stock?

Currently, the company is trading at 62.28 times earnings, which is significantly higher than companies with similar business models like Silver Wheaton Corp. (SLW), Goldcorp Inc. (GG), and Barrick Gold Corporation who have respective P/Es of 24.85, 28.12, and 10.10.

On the up-side, Sandstorm’s high P/E ratio and market capitalisation of $1 billion dollars signifies that they have the capital they need to invest more in potentially fruitful projects, thus bringing-in more earnings for investors. On the down-side, one must decide whether $14.35 a share at 62.28 P/E is a good deal; maybe Sandstorm Gold’s stock is overpriced and its growth prospects are limited.

Is it possible for Sandstorm gold to reach 18$ or $20 a share in the future? At current earnings levels, this would signify a stock price of around 80 times earnings, which seems expensive to say the least. In the long run, however, Sandstorm Gold’s stock growth will ultimately depend on how they generate profits with their new soaring market capitalization. If Nolan Watson can increase earnings by continuing to shake hands on sound mining projects, he will help drive down the P/E ratio which will make Sandstorm gold seem like a more affordable investment.

Last week HP’s stock (HPQ) hit the lowest point since october 2002, finally reaching $14.3 a share after a year of constant pitfalls. The drop occurred after news that HP CEO Margaret Whitman projected a drop in next year’s profit. Since last year, HP’s stock has decreased nearly 50%, and investors’ outlook seems to be getting worse by the minute.

Is HP in the same category as companies like Dell and RIM, who are suffering from increasing competition and a lack of innovation for outstanding products? The answer seems to be a glowing YES. HP offers acceptable printers and computers, but in the computer industry, being 2nd is as good as being last!

So how can HP turn around it’s strongly downward trend? Their current strategy seems sound; investing in R&D in order to make more captivating products at a competitive price.  Whitman expects the benefits of such investments to surface by 2016, at which point HP ‘should’ be as innovative as its competitors Apple and Lenovo.

HP is currently valued at $28.6 Billiion, so it seems quite likely they will survive the diminishing returns in the short run. The real question is whether HP will survive in the long run. If you take Whitman’s word on it, investing in HP may be worthwhile if they manage to regain their competitive edge. The stock traded upwards of $25 a share just 6 months ago, and it could very well reach it’s traditional highs of $50 a share. In the mean time, HP is offering a healthy 3.58 dividend yield, which may make your wait even more worthwhile.