Investors that are looking for a secure investment that yields higher than government bonds, yet has the potential for large increases, look to mortgage stocks. At this time, mortgage stocks have been outperforming any other stock of its type on the market. The S&P has increased 3.6 percent this year which has been a significant jump. However, many of the mortgage stocks listed have jumped 12 or more percent during this same period.
The Appeal of Mortgage Stocks
Mortgage backed bonds offer the same type of security that a government bond offers. These bods are generally backed by a federal agency, such as Ginnie Mae, and have the potential to increase in value rapidly as the housing market improves. Additionally, these stocks can be quickly sold, unlike a regular bond, allowing investors to move about their money to meet market demands.
At this time, there are five mortgage stocks that investors are encouraged to evaluate for their own personal gain. These stocks have shown to have significant potential in 2013, and are currently top rated performers.
1. Radian Group (NYSE:RDN) Founded in 1977, Radian Group is a U.S. company based in Pennsylvania. Radian’s main line of business is offering private mortgage insurance products, followed by risk-management services to mortgage lenders. Radian also bundles mortgages that is insures and sells them on the secondary market. Since January 1, 2013, Radian has seen a 13 percent increase in their stock. They have been rated as a BUY because the potential for even greater increases during the remainder of the year is great.
2. Home Bancorp (NASDAQ:HBCP) Home Bancorp is a federally charted bank that operates within Louisiana. The company offers a full line of savings and loans products, and has increased its mortgage offerings. Since the beginning of the year, Home Bancorp has seen their stocks rise over 12 percent. Due to their stability and opportunity for growth, this mortgage based stock is rated as a BUY.
3. WSFS Financial (NASDAQ: WSFS) WSFS is a thrift holding company for Wilmington Savings Fund Society which was founded in 1832 in the Mid-Atlantic region. This financial company operates as a full-service bank, offering many different financial products. The company has 52 offices and 430 ATM machines. They have continued to outperform their financial goals and have seen significant growth in their stock value since the beginning of 2013.
4. Berkshire Hills Bancorp (NYSE: BHLB) this stock has outperformed others in this category for the last 2 years. In the last quarter, this stock rose 17.6 percent. It did not make the number one recommended stock simply because a new Board of Directors was placed in charge in late March. Investors are watching this stock closely.
5. Hingham Institution Savings (NASDAQ: HIFS) Hingham Institution has continually performed above average and has increased their dividend rate over the last year. At this time, the stock has increased 11.9 percent since January 1, 2013.