New Century Financial Corp. on Monday boosted its dividend outlook for 2005 by 5%.
The real estate investment trust said it expects to pay $6.50 per share in dividends this year, up from a prior forecast of $6.20 per share.
Shares of New Century were up 2% to $54 midday Monday.
Subprime lenders such as New Century make loans to people with less-than-perfect credit histories or who have a hard time getting a traditional mortgage for other reasons.
Subprime lending has boomed along with the housing market in the past few years.
Rising interest rates could make it tougher for New Century to hit its profit goal this year.
“Interest rates continue to rise, which we expect will result in lower net operating margins in 2005 compared with 2004,” said Patti Dodge, New Century’s chief financial officer, in a recent statement.
Another factor is competition, which “remains challenging,” according to Dodge.
