What the Lender Specialized template measures
Card and instalment lenders, mortgage originators and mortgage REITs make money the way a bank does, by earning more on what they lend than they pay for the money they lend, but they do not take deposits. They borrow in the debt markets instead: securitisations, warehouse lines, repo and bonds, money that has to be refinanced and repriced as rates move. The Lender template scores what decides whether such a business lasts: how well its returns hold up as funding costs change, what it lends against, how much equity stands behind the book, and whether it has been pricing credit honestly.
Funding & Return Stability
22% of the moat score
A lender without deposits buys all of its funding, so its first test is whether the business still earns a decent return when that funding gets dearer. Lenders with a real edge, such as a trusted securitisation shelf, committed facilities or a borrower base that tolerates repricing, keep their return on equity through a rate cycle. Weaker ones see returns swing or collapse when the market for their paper tightens. This defense reads the level and steadiness of those returns.
Lending Advantage
18% of the moat score
Outside banking, a lending advantage usually comes from origination: a channel or a data edge that finds good borrowers more cheaply than rivals, or a niche such as subprime auto, student loans or agency mortgages where experience in underwriting and servicing is hard to copy. It shows up as a spread that stays above peers without the lender having to accept worse credit to keep its volumes.
Capital Strength
20% of the moat score
Without deposit insurance or a central-bank backstop, equity is what keeps a lender in business when its lenders get nervous. Thin capital means margin calls on repo, covenant trips on warehouse lines, and forced asset sales at the bottom of the cycle. Lenders that run with more equity relative to their borrowings can keep originating, and buy assets, while others are shrinking.
Cost Discipline
16% of the moat score
Origination, servicing and collections are largely fixed-cost operations, so scale and automation decide how much of the spread survives to the bottom line. A lean lender can price loans more keenly and still earn its return, and it has more room to absorb a weak credit year or a slowdown in originations without cutting into capital.
Revenue Diversification
14% of the moat score
A lender that earns only on the spread of one product is exposed to that product's cycle and to the market that funds it. Servicing fees, gain-on-sale income, insurance and other fee lines earn money on different drivers and need less capital. Lenders with several sources show revenue that grows more evenly through the cycle, which is what this defense reads.
Risk Management
10% of the moat score
Credit losses at a non-bank lender arrive late and all at once, and with borrowed funding they can turn into a liquidity problem in weeks. Good risk management shows up as results that did not need a large write-down or a rescue financing when credit turned, so the score looks at the shape of returns over several years rather than at any single one.
Moat scoring in Mortgage REITs
Which Mortgage REITs companies have the widest moats?
AGNC Investment Corp. - Deposit (AGNCO), AGNC Investment Corp. - Deposit (AGNCN), AGNC Investment Corp. (AGNC) currently hold the widest moats of the 67 companies in the group, led by AGNC Investment Corp. - Deposit at 73 out of 100. The full ranking is on this page, and each company links through to the six defenses behind its score.
How is a moat measured for Mortgage REITs?
Card and instalment lenders, mortgage originators and mortgage REITs make money the way a bank does, by earning more on what they lend than they pay for the money they lend, but they do not take deposits. They borrow in the debt markets instead: securitisations, warehouse lines, repo and bonds, money that has to be refinanced and repriced as rates move. The Lender template scores what decides whether such a business lasts: how well its returns hold up as funding costs change, what it lends against, how much equity stands behind the book, and whether it has been pricing credit honestly.
Which competitive defenses does the Lender Specialized template score?
It scores 6 defenses: Funding & Return Stability, Lending Advantage, Capital Strength, Cost Discipline, Revenue Diversification, Risk Management. Each is measured independently and then weighted, so a company can be strong on one and weak on another. The weights differ from other templates because the defenses that decide who wins in Mortgage REITs are not the ones that decide it elsewhere.
What is a good moat score for a Mortgage REITs company?
Across the 67 companies in this group the median moat score is 50, with the middle half falling between 41 and 61. A score above the upper quartile puts a company in the strongest quarter of its industry. Because scores are percentile-based, roughly half of any industry sits below its own median by construction.