Historical data shows that a consistent $500 monthly investment into MFA Financial, Inc. 8.875% Senior Notes (MFAN) starting in 2020 would have turned a total investment of $24K into $29K today. This represents a total return of 19.8% over the 6-year period, compounding through dividend reinvestment and market growth.
The Impact of Dividend Reinvestment (DRIP)
MFA Financial, Inc. 8.875% Senior Notes pays a dividend (currently yielding ~0.07%). By utilizing a Dividend Reinvestment Plan (DRIP), generated dividends automatically purchase fractional shares. Over this 6-year period, regular dividend payments totaled $4K. Reinvesting these dividends continuously compounded your returns, accelerating the portfolio's growth far beyond simple price appreciation.
MFAN vs. S&P 500 (SPY) Benchmark
When comparing this dollar cost averaging strategy against a broad market index,MFAN underperformed the S&P 500 ETF (SPY). The same $500 monthly contributions into SPY would have grown to $33K, compared to MFAN's $29K.