Earlier this week I wrote about four dividend-paying stocks that I felt were good stocks to own. After the Fed announced that it sees two interest rate hikes before the end of 2023, a number of high-yielding stocks saw significant drops as investors considered the alternatives and the possibility of getting higher yields elsewhere. I looked at a specific list of stocks that a reporter had sent me to determine which stocks I felt offered the best combination of yield and capital appreciation.

After looking through those stocks, I started looking at some stocks that have been on my radar because they have great fundamental indicators. One stock that jumped out at me was Arbor Realty Trust (ABR). The stock is a Real Estate Investment Trust (REIT) and it definitely pays a nice dividend. But that wasn't what first got my attention. I was scanning the charts of a list I build each month where I know the companies have strong fundamentals and the consistency of Arbor really jumped out at me.

Looking at the weekly chart we see that the 13-week moving average is almost a perfectly straight line that has been moving up at a 45-degree angle. Seeing the moving average rise in a straight line tells you how consistent the climb has been. The stock hasn't closed below the 13-week since May 2020 and it appears to be using the trend line as a key support level. Arbor did drop last week when the Fed made its announcement, but it remained above the moving average.

We see that the stock is hovering near overbought territory based on the 10-week RSI and the weekly stochastic indicators. Last week's decline did bring the RSI down below 60 and that is about as low as it has been since moving above that level last August. The stochastic indicators haven't been below the 7o level since last July.

While the technical picture is impressive, the fundamentals are strong as well, and I haven't even mentioned the yield yet.

Arbor's Profit Margin and Revenue Growth Are Well Above Average

One of the things I look for in a stock is growth—be it earnings growth or revenue growth. Even when I am looking at high yield stocks, I want to see that company is growing earnings, revenue, or both. If the dividend is high, the company needs to see growth to keep up the payments. Arbor's earnings have been declining by an average of 5% per year over the last three years, but the EPS jumped by 68% in the most recent quarterly report.

The company has fared better on its revenue growth with an average growth rate of 17% per year over the last three years. Revenue jumped 87% in the most recent quarterly report. Revenue is expected to increase by 28.2% for 2021.

The overall growth picture for Arbor is pretty good for a REIT and it also has a profit margin that is well above average at 35.7%. The return on equity is 13.5% and that is decent compared to the industry average.

Looking at Tickeron's Fundament Screener, Arbor scores well in three categories and it scores poorly in two areas. The company gets high marks in its Valuation Rating, the Profit vs. Risk Rating, and the SMR Rating. The two areas of concern are the Outlook Rating and the P/E Growth Rating.

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The stock's trailing P/E is really low at 9.41 and the forward P/E is only 11.03. Both of those figures are below the industry averages.

This brings me to the dividend and yield for Arbor. The company pays a quarterly dividend that's at $0.34 currently. This makes the annual payments $1.36 and at the current stock price, it gives us a yield of 7.41%. If you read my article from earlier this week, the four stocks I highlighted were yielding between 1.5% and 2.1%, so Arbor's yield is considerably higher than those four stocks.

Arbor is a mortgage REIT and it loans money against commercial and multifamily properties. Obviously, the current economic environment is providing an uncertain future for commercial real estate and multifamily properties as well. The pandemic has created a major shift in the market. The supply and demand numbers have changed and will likely continue changing for a number of years. The single-family home market is going strong, but that could create a greater demand in the multi-family market moving forward. Prices are rising so rapidly that many people may not be able to afford the single-family home they desire.

The commercial real estate market is a bigger concern because we are seeing massive shifts in office space demands as well as retail space. Traditional mall operators were already struggling and the pandemic has only accelerated the problems. Office space is a "yet-to-determined" status. Many companies have changed corporate policy and are now allowing more employees to work from home. As more people telecommute, the demand for office space is likely to decline.

These changing markets could have an impact on Arbor's future, but it will take several years for everything to sort out. For now, Arbor's future looks pretty strong from a technical perspective as well as its fundamentals. The yield is extremely attractive and I don't see the yield changing drastically in the next few years. Arbor's financials suggest the dividend is safe and isn't likely to be cut anytime soon. That should help the stock continue higher.