It’s been a while since I last covered MFA Financial (NYSE: MFA). Back in July 2019, I said there wasn’t much to like about the prospects of the company’s $0.20 per share quarterly dividend. I rated it an “F,” expecting a dividend cut in the near future due to falling net interest income and recent dividend cuts.

Less than a year later, MFA Financial eliminated its dividend entirely. The mortgage real estate investment trust (REIT) reinstated the dividend in September of 2020 at $0.05 per share – 75% below where it had been in 2019.

Since then, MFA Financial has raised the dividend three times to where it currently stands at $0.11 per share, which is still 45% below the 2019 level.

Can the company maintain even that lower payout?

In 2021, net interest income, the measure of cash flow we use for mortgage REITs, is expected to come in at $204.2 million. MFA Financial is forecast to have paid out $169.8 million in dividends for a payout ratio of 83%, which is fine for a REIT.

However, excluding 2020, net interest income is at its lowest level since the mortgage meltdown in 2008.

So we have a company that can’t get its net interest income moving in the right direction. MFA Financial also has a history that includes not only cutting the dividend but eliminating it entirely less than a year and a half ago.

Unless net interest income starts moving in the right direction, expect another dividend cut in the not-too-distant future.

Dividend Safety Rating: F