Invesco Mortgage Capital Shifts to Monthly Dividend Payouts

Invesco Mortgage Capital Inc. is fundamentally altering its approach to shareholder returns. The real estate investment trust (REIT) has announced a significant change in its distribution policy, moving from a quarterly to a monthly dividend schedule while simultaneously reducing the payout amount. This strategic pivot raises important questions regarding the income stability and future direction of the mortgage finance specialist.

The newly declared monthly dividend is set at $0.12 per common share. Shareholders of record as of January 26 will receive this payment on February 13. This action implements a plan unveiled in December to provide investors with "more timely and consistent income."

However, this shift to a monthly frequency comes with a substantial cut. The last quarterly dividend paid was $0.36. While the new $0.12 monthly rate annualizes to a similar quarterly figure of $0.36, it represents a $0.24 reduction compared to the previous quarterly distribution. Based on a recent share price of approximately $9.09, the annualized dividend yield stands near 15.5%.

This recalibration follows the company's mixed financial performance in the third quarter of 2025. During that period, Invesco Mortgage Capital surpassed earnings expectations but fell notably short of revenue forecasts. Assessments of the payout's sustainability vary widely among sources, with cited payout ratios ranging from 69% to over 280%.

Should investors sell immediately? Or is it worth buying Invesco Mortgage Capital?

Wall Street's Diverging Perspectives

Market analysts present a divided view on the REIT's prospects. The average price target currently sits at $8.25, accompanied by a consensus "Hold" recommendation. In December 2025, Compass Point initiated coverage with a "Buy" rating, while Zacks Research upgraded its stance to "Strong-Buy."

Concurrently, several institutional investors have been increasing their stakes. Wolverine Asset Management boosted its position by 23.5% last quarter, accumulating over 1.1 million shares. Goldman Sachs and Cetera Investment Advisers also meaningfully expanded their holdings in earlier quarters.

The stock is currently trading near the top of its 52-week range, which spans from $5.86 to $9.32. The market's ongoing reaction to this new dividend strategy, coupled with developments in the mortgage-backed securities environment, will be crucial determinants of future share performance. The next key date for investors is the ex-dividend date on January 26.