Core Viewpoint - AGNC Investment Inc. has experienced an 11.6% decline in share price over the past three months, which is more significant than the industry's decline of 8.5%, reflecting broader challenges in the mortgage market due to rate volatility [1][4]. Price Performance - AGNC's peers, Annaly Capital Management and Arbor Realty Trust, have also seen declines of 5% and 21.4%, respectively, in the same period [1]. - Despite recent price drops, AGNC offers attractive long-term returns with a high dividend yield, which may attract investors [4]. Interest Rate Environment - AGNC's performance is heavily influenced by the interest rate environment, particularly decisions made by the Federal Reserve [5]. - The company's net interest income (NII) fell dramatically from $965 million in 2022 to just $18 million in 2024 due to rising borrowing costs [6]. - A reduction in interest rates by 100 basis points in 2024 positively impacted AGNC's NII, which rose to $159 million in Q1 2025 from a negative $30 million in the same quarter the previous year [7]. Mortgage Rates and Activity - Recent trends show a slight decline in mortgage rates, with the average 30-year fixed-rate mortgage at 6.76% as of May 8, 2025, down from 7.09% a year prior [7]. - Lower mortgage rates are expected to boost origination and refinancing activities, which could enhance AGNC's NII and portfolio value [8][21]. Dividend Yield - AGNC's current dividend yield stands at 16.38%, significantly higher than the industry average of 12.03%, making it an attractive option for income-seeking investors [10]. - The company has a payout ratio of 81% and is engaged in a stock repurchase plan, authorizing up to $1 billion in buybacks through December 31, 2026 [11]. Agency MBS Outlook - AGNC focuses on agency mortgage-backed securities (RMBS), which are backed by U.S. government guarantees, positioning it well in this market segment [12]. - The outlook for agency MBS has improved, although market volatility has increased following recent tariff announcements [13]. - AGNC generated a positive economic return of 2.4% in Q1 2025, supported by its dividend strategy [14]. Valuation - AGNC is currently trading at a forward 12-month price-to-earnings (P/E) multiple of 5.36X, below the industry average of 7.74X, indicating it may be undervalued [22]. - Compared to peers, AGNC's P/E is lower than Annaly Capital Management's 6.66X and Arbor Realty Trust's 8.44X [22]. Investment Consideration - Given the strong fundamentals, high dividend yield, and potential for growth in a declining rate environment, AGNC stock may be a worthwhile addition to investment portfolios [24].

Company Overview - AGNC Investment is a mortgage real estate investment trust (REIT) that focuses on buying pooled mortgage securities rather than owning physical properties [2][4] - The company aims to profit from the difference between its cost of capital and the interest earned from its mortgage securities [4] Dividend and Total Return - AGNC Investment offers a high dividend yield of 16%, but its primary goal is total return rather than income generation [5][12] - The company encourages investors to reinvest dividends for better long-term outcomes, as relying solely on dividends may lead to reduced income and capital [5][7] Transparency and Valuation - AGNC Investment is transparent about its operations, stating its objective of favorable long-term stockholder returns with a substantial yield component [7] - The tangible net book value (NAV) of AGNC Investment was reported at $8.25 per share, down from $8.41, yet investors are willing to pay above this value, indicating a premium of nearly 25% [9][10] Investment Considerations - Investors should be cautious about paying more than the tangible net book value for AGNC Investment shares, as this could indicate overvaluation [10][12] - The company has historically achieved its total return goal, but potential investors should ensure they are buying for the right reasons and at a reasonable price [13]

Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Stock Ratings and Analyst Insights - Horizon Technology Finance Corporation (HRZN) has a dividend yield of 17.89%. Analyst Paul Johnson from Keefe, Bruyette & Woods maintained an Underperform rating and reduced the price target from $8 to $7.5, with an accuracy rate of 63%. Analyst Casey Alexander from Compass Point upgraded the stock from Sell to Neutral with a price target of $8.25, having an accuracy rate of 68% [7] - Ellington Credit Company (EARN) has a dividend yield of 17.78%. UBS analyst Douglas Harter maintained a Neutral rating and lowered the price target from $6.5 to $5.25, with an accuracy rate of 68%. JMP Securities analyst Mikhail Goberman reiterated a Market Perform rating, holding an accuracy rate of 67% [7] - AGNC Investment Corp. (AGNC) has a dividend yield of 16.38%. RBC Capital analyst Kenneth Lee maintained an Outperform rating and cut the price target from $11 to $10, with an accuracy rate of 62%. Wells Fargo analyst Donald Fandetti maintained an Overweight rating and reduced the price target from $11 to $10, having an accuracy rate of 71% [7] Group 2: Recent News and Financial Performance - Horizon Technology Finance reported first-quarter financial results, missing net and total investment income estimates [7] - Ellington Credit Company's Board of Trustees declared a monthly common dividend of $0.08 per share [7] - AGNC Investment posted positive quarterly earnings [7]

Group 1 - The article emphasizes the uncertainty inherent in war, stating that three-quarters of the factors influencing actions in war are shrouded in varying degrees of uncertainty [1] Group 2 - The company promotes a portfolio strategy that generates income without the need for selling assets, aiming to alleviate the stress of retirement investing [3] - The Income Method is highlighted as a way to achieve strong returns, targeting a yield of 9-10% [3] - A month-long paid trial is offered at $49, with an additional 5% discount as an incentive for potential investors [3]

Financial Performance - AGNC reported total comprehensive income of $0.12 per common share for Q1 2025, with an economic return on tangible common equity of 2.4%[130]. - Net income available to common stockholders decreased to $15 million for the three months ended March 31, 2025, compared to $412 million in the same period of 2024, indicating a decline of 96.4%[164]. - Comprehensive income available to common stockholders was $108 million in Q1 2025, down from $335 million in Q1 2024[188]. - Economic return on tangible common equity for Q1 2025 was 2.4%, a decrease from 5.7% in Q1 2024[164]. - Interest income for the three months ended March 31, 2025, was $846 million, up from $642 million in the same period of 2024, reflecting a year-over-year increase of 32%[164]. - Economic interest income for Q1 2025 was $952 million, a 33% increase from $716 million in Q1 2024, with a yield of 4.87% compared to 4.56%[171]. - Operating expenses for the three months ended March 31, 2025, were $28 million, up from $24 million in the same period of 2024, representing a 16.7% increase[164]. - Total gain on investment securities was $1,031 million in Q1 2025, compared to a loss of $639 million in Q1 2024[190]. - Total gain (loss) on derivative instruments and other securities was a loss of $1,019 million in Q1 2025, compared to a gain of $1,059 million in Q1 2024[193]. Investment Portfolio - The investment portfolio increased by approximately $5 billion to $78.9 billion at quarter-end, with a weighted average coupon of just over 5.0%[137]. - As of March 31, 2025, the investment portfolio totaled $78.9 billion, up from $73.3 billion as of December 31, 2024, representing a growth of approximately 7.6%[146]. - The fair value of Agency RMBS increased to $70.5 billion as of March 31, 2025, compared to $65.5 billion at the end of 2024, reflecting a growth of about 7.6%[146]. - The total investment securities reached $80.58 billion with a fair value of $78.80 billion, yielding 5.06% as of March 31, 2025[146]. - The average investment portfolio increased by 24% to $61.7 billion in Q1 2025, primarily due to an increase in the capital base[175]. - The total fixed rate Agency RMBS and TBA securities amounted to $79.73 billion with a fair value of $77.93 billion as of March 31, 2025, maintaining a yield of 5.02%[151]. - The average coupon for 30-year RMBS was 5.05% as of March 31, 2025, slightly up from 5.04% at the end of 2024[151]. - The total fair value of non-Agency RMBS was $15 million as of March 31, 2025, with a yield of 5.28%[151]. - The total CMBS was valued at $235 million with a fair value of $212 million, yielding 6.82% as of March 31, 2025[151]. Liabilities and Equity - Total liabilities increased to $85,847 million as of March 31, 2025, compared to $78,253 million as of December 31, 2024, reflecting a rise of 9.8%[163]. - Total stockholders' equity as of March 31, 2025, was $10,042 million, up from $9,762 million as of December 31, 2024, representing a growth of 2.9%[163]. - The company's net book value per common share decreased to $8.80 as of March 31, 2025, down from $9.00 as of December 31, 2024[163]. - The weighted average number of common shares outstanding increased to 918.3 million in Q1 2025 from 702.2 million in Q1 2024[164]. Interest Rates and Economic Factors - The 30-year fixed-rate mortgage rate as of March 31, 2025, was 6.60%, slightly down from 6.74% a year earlier[171]. - The average interest rate on mortgage borrowings decreased by 100 basis points in Q1 2025, attributed to lower short-term interest rates[184]. - The 10-year Treasury yield fluctuated by more than 100 basis points in early April, reflecting heightened market volatility[131]. - The 30-year Agency current coupon yield decreased to 5.51%, down 32 basis points from the previous quarter[144]. - The 30-year Agency RMBS current coupon spread to the blended 5- and 10-year Treasury rate widened to 160 basis points, the top of its five-quarter trading range[134]. Risk Management and Liquidity - The company manages counterparty risk by diversifying funding across multiple counterparties and regions[209]. - The company's liquidity management strategy includes maintaining excess liquidity through unencumbered liquid assets to satisfy collateral requirements[208]. - The maximum amount at risk with any repurchase agreement counterparties was less than 2% of tangible stockholders' equity as of March 31, 2025, with the top five repo counterparties representing 5% of tangible stockholders' equity[210]. - The company aims to maintain excess liquidity by holding unencumbered liquid assets to satisfy collateral requirements and support additional borrowings[208]. - The company does not maintain relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements as of March 31, 2025[213]. Stock Repurchase and Capital Raising - The company has authorized a stock repurchase plan with an aggregate repurchase price of $1.0 billion remaining for repurchase through December 31, 2026[212]. - The company has established a new At-the-Market Offering Program in April 2025 to raise additional equity capital[212]. - The equity capital markets are a source of capital for business growth, dependent on market conditions and investor demand[212].

Company Overview - AGNC Investment is a mortgage REIT that buys pooled mortgages and uses leverage to enhance returns, differing from property-owning REITs that lease buildings to tenants [2][5] - The company reports its tangible net book value quarterly, akin to the net asset value of a mutual fund, and assesses long-term performance through total return, which includes dividend reinvestment [4][8] Dividend and Performance - AGNC Investment aims for favorable long-term stockholder returns with a substantial yield component, reflected in its approximately 16% dividend yield [5][6] - Over the past three years, the dividend has remained flat while the share price has declined, but total return has stayed positive due to dividend reinvestment [8] - The tangible net book value per share decreased from $13.12 at the end of Q1 2022 to $8.25 at the end of Q1 2025, indicating a decline in the actual value of the portfolio [9] Future Outlook - The trend of declining tangible net book value is expected to continue, as the large dividend payments effectively return capital to investors while diminishing portfolio value [10] - Interest rates play a crucial role in the value of AGNC Investment's bond portfolio; falling rates could increase bond values, but the substantial dividend may still offset these gains [11] - The business model is less favorable for dividend-focused investors, with total return investors being the primary target market for the stock [12]

Core Insights - AGNC (NASDAQ: AGNC) operates a leveraged model that invests in mortgage-backed securities, enhancing returns by utilizing funding from lower interest rate entities [1] - The company employs hedging strategies, including interest rate swaps and US-based securities, to protect its investments from significant volatility [1] Company Overview - AGNC focuses on mortgage-backed securities, which are financial instruments backed by mortgage loans [1] - The company’s investment strategy is designed to capitalize on lower interest rates to maximize returns [1] Investment Strategy - The use of leverage in AGNC's model allows for increased potential returns, but also introduces additional risk [1] - Hedging techniques are critical for mitigating risks associated with interest rate fluctuations and market volatility [1]

Core Viewpoint - AGNC Investment Corp is a real estate investment trust (REIT) primarily investing in agency-backed mortgage securities, categorized as an mREIT, and has faced criticism regarding its investment appeal [1]. Company Overview - AGNC Investment Corp operates in the real estate sector, focusing on agency-backed mortgage securities, which are a significant part of its investment strategy [1]. Analyst Background - The author has a background in history, political science, and an MBA with a specialization in Finance and Economics, indicating a strong analytical foundation for evaluating investment opportunities [1]. Investment Focus - The company emphasizes income investing through various financial instruments, including common shares, preferred shares, and bonds, reflecting a strategy aimed at generating consistent returns [1].

Core Viewpoint - AGNC Investment, a prominent mortgage REIT, has experienced a notable decline in its share price in April due to market apprehensions regarding the long-term effects of tariffs on the U.S. economy, despite reporting satisfactory results [1]. Company Summary - AGNC Investment is classified as a leading mortgage REIT [1]. - The company has faced a significant drop in share price during April [1]. - Market concerns are primarily focused on the long-term impact of tariffs on the U.S. economy [1]. - Despite the share price decline, AGNC Investment reported decent financial results [1].

Core Viewpoint - AGNC Investment Corp. and Annaly Capital Management are leading players in the mortgage real estate investment trusts (mREITs) industry, both offering attractive long-term returns and high dividend yields, but Annaly is currently viewed as the better investment opportunity due to its diversified strategy and stable dividend payouts [1][28]. Group 1: Business Model & Portfolio Diversification - AGNC focuses exclusively on agency mortgage-backed securities (MBS), leveraging investments in Agency RMBS, which are guaranteed by U.S. Government agencies [2]. - NLY employs a diversified capital allocation strategy, investing in residential credit, mortgage servicing rights (MSR), and agency MBS, aiming to reduce volatility and enhance risk-adjusted returns [4][5]. Group 2: Capital Distribution & Dividend Yield - AGNC has a dividend yield of 16.27%, significantly higher than the industry average of 11.3%, with a payout ratio of 81% [6]. - NLY announced a cash dividend of $0.70 per share for Q1 2025, a 7.7% increase from the previous payout, resulting in a dividend yield of 14.58% and a payout ratio of 96% [7]. Group 3: Interest Rate Sensitivity - AGNC's performance is heavily influenced by interest rate changes due to its concentrated agency MBS exposure, leading to increased borrowing costs and profit margin pressures [12][13]. - NLY's diversified portfolio allows it to better withstand interest rate volatility, with lower increases in borrowing costs compared to AGNC during periods of rising rates [15][16]. Group 4: Earnings Estimates - The Zacks Consensus Estimate for AGNC indicates year-over-year earnings declines of 11.2% for 2025 and 3.9% for 2026 [17]. - In contrast, NLY's earnings estimates suggest year-over-year increases of 5.6% for 2025 and 1.2% for 2026, indicating stronger growth potential [20]. Group 5: Price Performance & Valuations - Over the past year, AGNC has gained 11.2% and NLY has risen 16.6%, outperforming the industry, which declined by 0.2% [22]. - AGNC trades at a forward price-to-tangible book (P/TB) multiple of 1.07X, while NLY trades at 0.98X, both above the industry average of 0.90X, with NLY appearing more attractive in terms of valuation [25]. Group 6: Investment Recommendation - Given the stability of NLY's recent dividend payouts and its diversified strategy, it is recommended for investors seeking long-term stability and higher dividend yields [28][30].