Hatteras Financial (HTS) Drops Over 6%

Shares of Hatteras Financial (HTS) plummeted Tuesday as the company on news that the company is issuing 6.5 million shares. Hatteras Financial is a REIT that pays an incredibly generous dividend yield over 14%. The company makes its money by buying government sponsored mortgages. The stock was down 6.2% today to close the day at $28.76. Investors sold shares amidst fears that the common stock issuance will dilute existing shareholders. Although existing shareholders will face dilution, the selloff appears overdone. Hatteras is one of the most reliable REIT's in the industry. The company was able to maintain its hefty dividend during the market selloff of 2009.