Core Viewpoint - The mortgage-backed security (MBS) market remains challenging due to ongoing tariff issues and tensions between President Trump and Federal Reserve Chair Jerome Powell, impacting AGNC Investment's performance despite a high dividend yield of over 15% [1] Market Environment - AGNC primarily holds MBS backed by government-sponsored agencies like Fannie Mae and Freddie Mac, which are generally considered low-risk due to their government backing [2] - Interest rates significantly affect MBS values, with yields trading at a spread to U.S. Treasury yields, which are viewed as safe [3] - Regulatory tightening has led banks to avoid longer-duration assets like MBS, contributing to market pressure [3] Company Performance - AGNC reported a 5% decline in tangible book value (TBV) to $7.81 per share at the end of Q2, down from $8.25 per share at the end of Q1, but noted a 1% increase in July after accounting for dividends [6] - The average net interest spread for AGNC was 2.01%, down from 2.69% a year ago and 2.12% in Q1, attributed to reduced benefits from hedges and increased hedge costs [7] - AGNC generated $0.38 per share in net spread and income from dollar rolls, resulting in a negative 1% economic return on tangible common equity [8] Leverage and Capital Deployment - The company ended the quarter with a leverage ratio of 7.6 times tangible net book value, slightly up from 7.5 at the end of Q1 [9] - AGNC raised $800 million in equity through its ATM program at a premium to TBV, with plans to invest the proceeds gradually [10] Future Outlook - AGNC expects net spread and dollar roll income to remain in the mid- to high-$0.30 to low- to mid-$0.40 range, which should support its dividend [12] - The company requires tighter MBS spreads for TBV improvement, as current wide spreads can be beneficial for investment returns but need to narrow for stock appreciation [13] - With MBS spreads near historical highs, the stock may be attractive for risk-tolerant, income-oriented investors, although the current price reflects some of this potential [14]

Core Viewpoint - The mortgage market faced challenges in the second quarter due to interest rate volatility and negative investor sentiment, but AGNC Investment managed to navigate these issues effectively while maintaining its high dividend yield [4][5][11]. Company Performance - AGNC Investment reported an economic return of negative 1% for the quarter and a comprehensive loss of $0.13 per share, primarily due to underperformance in agency mortgage-backed securities (MBSes) [4][2]. - Despite the negative headline numbers, the company maintained a robust risk management strategy and strong liquidity, allowing it to preserve its portfolio and sustain its 15%-yielding monthly dividend [5][11]. Market Outlook - The CEO of AGNC Investment expressed a favorable outlook for levered and hedged Agency MBS investments, noting that mortgage spreads remain elevated by historical standards, creating a favorable return environment [6][7]. - The supply of MBSes is balanced with demand, and anticipated regulatory changes may allow banks to increase their MBS investments, further strengthening the market [7][8]. Investment Strategy - AGNC continues to earn a return on equity of around 19%, which aligns well with its cost of capital, suggesting the company can maintain its current dividend level [9]. - The company raised $799 million by selling 92.6 million shares during the second quarter, using about half of that capital to invest opportunistically in MBSes, which is expected to boost returns and support the dividend [10]. Risk and Reward - AGNC Investment offers a high-risk, high-reward passive income stream with its substantial monthly dividend, which remains secure despite market turbulence [11][12]. - The investment may not be suitable for all investors due to its higher risk profile, but it presents significant potential rewards for those with a higher risk tolerance [12].

Core Insights - JR Research is recognized as a top analyst by TipRanks and Seeking Alpha, focusing on technology, software, and internet sectors, as well as growth and GARP strategies [1][2] - The investment strategy emphasizes identifying attractive risk/reward opportunities with robust price action to generate alpha above the S&P 500 [1][2] - The approach combines price action analysis with fundamental investing, avoiding overhyped stocks while targeting battered stocks with recovery potential [2] Investment Strategy - The investing group Ultimate Growth Investing specializes in high-potential opportunities across various sectors, focusing on strong growth potential and contrarian plays [3] - The investment thesis typically has an 18 to 24 month outlook for realization, targeting growth stocks with robust fundamentals and attractive valuations [3] - The group aims to capitalize on buying momentum and turnaround plays, appealing to investors seeking growth stocks [3]

Core Insights - AGNC Investment Corp. reported a tangible net book value (TNBV) decline of 7.0% and net spread earnings that fell short of expectations, with non-GAAP earnings per share at $0.38, below the $0.41 analyst estimate [1][2] - Revenue for the quarter was $830 million, lower than the estimated $862.75 million, although it represented a 19.4% increase year-over-year [2][6] - The company faces ongoing pressure on margins and capital, with a narrowing buffer between earnings and dividend obligations [1][10] Financial Performance - Non-GAAP EPS decreased from $0.53 in Q2 2024 to $0.38 in Q2 2025, reflecting a year-over-year decline of 28.3% [2] - TNBV per share fell from $8.40 to $7.81, a 7.0% decrease year-over-year [2][6] - Net income per share (diluted) reported a loss of $0.17, compared to a loss of $0.11 in the previous year, marking a 54.5% decline [2] Business Overview - AGNC operates as a mortgage REIT, primarily investing in securities backed by U.S. government agencies [3] - The company's strategy focuses on profiting from the spread between yields on mortgage-backed securities and borrowing costs [3] Market Conditions - The company faced significant spread widening due to interest rate swings and negative sentiment towards Agency MBS, leading to margin compression [5][9] - The annualized net interest spread declined to 2.01% from 2.12% in the prior quarter, with average asset yields at 4.83% and funding costs at 2.86% [5] Risk Management - AGNC's risk management strategy includes using interest rate swaps and short positions in U.S. Treasuries to hedge funding costs, with a notional swap hedge of $45.1 billion [9] - The company maintained a leverage ratio of 7.6 times at quarter-end, with a robust liquidity position of $6.4 billion in unencumbered cash and Agency MBS [7][9] Dividend and Future Outlook - The declared dividend remained unchanged at $0.36 per share, reflecting the company's REIT status requirement [10] - Management expressed a favorable outlook for levered and hedged Agency MBS investments, citing high mortgage spreads and potential regulatory changes [11]

Group 1 - The Conservative Income Portfolio aims to target the best value stocks with high margins of safety while reducing volatility through well-priced options [1] - The Enhanced Equity Income Solutions Portfolio is designed to generate yields of 7-9% while minimizing volatility [1] - AGNC Investment Corp. has been highlighted for its poor returns for income investors, with expectations that improvements are unlikely in the near future [2] Group 2 - Trapping Value consists of a team of analysts with over 40 years of combined experience in generating options income and focusing on capital preservation [3] - The Conservative Income Portfolio operates in partnership with Preferred Stock Trader, featuring two income-generating portfolios and a bond ladder [3]

Core Insights - AGNC Investment Corp. reported a second-quarter 2025 net spread and dollar roll income per common share of 38 cents, missing the Zacks Consensus Estimate of 42 cents and declining from 53 cents in the same quarter last year [2][10] - The company experienced a comprehensive loss per common share of 13 cents, remaining relatively flat compared to the previous year, impacted by a decline in tangible net book value per share and net interest spread, although average asset yield increased [3][12] - The average asset yield on AGNC's portfolio rose to 4.87% in Q2 2025, up from 4.69% in Q2 2024, while the combined weighted average cost of funds increased to 2.86% from 2% year-over-year [4][10] Financial Performance - Net interest income was reported at $162 million, missing the Zacks Consensus Estimate by 36.2%, with net interest expenses of $3 million in the prior-year quarter [4] - The average net interest spread, excluding estimated "catch-up" premium amortization benefits, decreased to 2.01% from 2.69% in the year-ago quarter [5] - As of June 30, 2025, tangible net book value per share was $7.81, down 7% year-over-year, with an economic return on tangible common equity of negative 1% compared to negative 0.9% in the previous year [6][10] Investment Portfolio - AGNC's investment portfolio totaled $82.3 billion, consisting of $73.3 billion in Agency mortgage-backed securities, $8.3 billion in net forward purchases/sales of Agency MBS, and $0.7 billion in CRT and non-Agency securities [7] - The average actual constant prepayment rate for the investment portfolio was 7.8%, down from 9.2% in the year-ago quarter [5] Cash Position - As of June 30, 2025, AGNC's cash and cash equivalents amounted to $656 million, reflecting a 44.2% decrease from the prior quarter [8] Dividend Information - AGNC declared a dividend of 36 cents per share for the second quarter, with total dividends of $14.7 billion or $49.36 per share since its IPO in May 2008 through Q2 2025 [11]

AGNC Investment (AGNC) Q2 2025 Earnings Call July 22, 2025 08:30 AM ET Company ParticipantsPeter Federico - Director, President, CEO & Chief Investment OfficerBernice Bell - EVP & CFOCrispin Love - DirectorTrevor Cranston - MD - Mortgage Finance Equity ResearchBose George - Managing DirectorJason Weaver - MD - Head Specialty Finance & Real Estate ResearchJason Stewart - Director - Mortgage FinanceEric Hagen - Managing DirectorConference Call ParticipantsKatherine Turlington - IR AnalystDouglas Harter - Equi ...

Financial Data and Key Metrics Changes - AGNC reported a comprehensive loss of $0.13 per common share for Q2 2025, with an economic return on tangible common equity of negative 1% [14] - The tangible net book value per share declined by $0.44, while dividends declared per common share were $0.36 [14] - As of the end of July, the tangible net book value per common share increased by about 1% after accounting for monthly dividend accrual [14] - Quarter-end leverage increased slightly to 7.6x tangible equity from 7.5x at the end of Q1, with average leverage rising to 7.5x from 7.3x in the prior quarter [14][15] Business Line Data and Key Metrics Changes - The asset portfolio totaled $82 billion at quarter-end, up approximately $3.5 billion from the prior quarter, with a focus on higher coupon specified pools [19] - The weighted average coupon of the asset portfolio increased to 5.13% during the quarter [19] - The net spread and dollar roll income declined to $0.38 per common share, primarily due to the timing of capital deployment and higher swap costs [17] Market Data and Key Metrics Changes - Agency mortgage-backed securities (MBS) underperformed relative to benchmark interest rates, with spreads to treasury and swap rates widening [5][7] - The current coupon spread to a blend of treasury and swap benchmarks ended the quarter wider by 7 and 14 basis points, respectively [7] - The expected net supply of new MBS for the year is about $200 billion, at the low end of most forecasts [9] Company Strategy and Development Direction - AGNC's strategy focuses on maintaining sufficient liquidity to navigate financial market volatility and taking advantage of wider MBS spreads [6][9] - The company aims to deploy capital opportunistically in attractively priced assets while managing leverage [26][27] - The favorable outlook for agency MBS is supported by anticipated regulatory changes and a commitment from key policymakers to maintain implicit guarantees for agency MBS [9][12] Management's Comments on Operating Environment and Future Outlook - Management noted that the financial market stress in April led to a reassessment of macroeconomic and monetary policy outlooks, but most markets recovered by the end of the quarter [4][6] - The company expects bank and foreign demand for agency MBS to grow, with improved seasonal supply patterns for MBS issuance anticipated in Q3 [8][9] - Management expressed confidence in the stability of the mortgage market and the potential for tighter mortgage spreads over time due to supportive government policies [12][21] Other Important Information - The liquidity position totaled $6.4 billion in cash and unencumbered agency MBS, representing 65% of tangible equity, an increase from 63% in the prior quarter [15] - The average projected life CPR of the portfolio declined to 7.8% from 8.3% in Q1, while actual CPRs averaged 8.7% for the quarter, up from 7% in the prior quarter [17] Q&A Session Summary Question: Insights on the attractive environment and capital raising - Management indicated a favorable outlook for agency MBS and the potential for raising additional capital or increasing leverage as opportunities arise [23][26][27] Question: Core earnings trajectory and dividend levels - Management discussed the alignment of net spread and dollar roll income with portfolio economics, suggesting a return on equity in the high teens range [32][36] Question: Capital deployment status and opportunities - Management confirmed that approximately $1 billion worth of mortgages were purchased recently, with a focus on higher coupon specified pools [43][44] Question: Optimal size of the company and capital issuance - Management emphasized growth driven by accretive capital raising, highlighting the benefits of scale and liquidity for shareholders [50][53] Question: Balance between swap hedges and treasury futures - Management noted a preference for a balanced mix of swaps and treasuries, with a current overweight in swaps due to market conditions [58][60] Question: Impact of government budget deficit on the repo market - Management expressed confidence that treasury issuance would not materially impact the repo market, citing ample liquidity [90][92] Question: Changes in credit scoring and prepayment environment - Management acknowledged potential impacts from changes in credit scoring but deemed them not significantly impactful from an investor perspective [100][104] Question: Risks associated with prepayment protection - Management recognized the risk of increased prepayment speeds due to market efficiency but noted that significant rate drops would be necessary for widespread refinancing [106][112]

Financial Performance - The company's market capitalization is $96 billion[5] - Total dividends paid since IPO reached $147 billion[5] - The dividend yield is 157%[5] - Tangible net book value per share was $781[9] - Comprehensive loss per share was $(013)[9] - Net spread and dollar roll income per share was $038[9] Portfolio Composition - As of June 30, 2025, the investment portfolio totaled $82242 billion[30] - 30-Year MBS accounted for 86% of the investment securities, with a fair market value of $70544 billion[30] - Fixed Rate Agency MBS and TBA securities had a weighted average coupon of 513%[32] Funding and Hedging - Average repo cost for Q2 2025 was 444%[33] - The hedge portfolio totaled $65694 billion, covering 89% of funding liabilities[37,39]

Core Viewpoint - AGNC Investment reported quarterly earnings of $0.38 per share, missing the Zacks Consensus Estimate of $0.42 per share, and showing a decline from $0.53 per share a year ago, indicating an earnings surprise of -9.52% [1][2] Financial Performance - The company posted revenues of $162 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 36.15%, compared to revenues of -$3 million a year ago [2] - Over the last four quarters, AGNC Investment has surpassed consensus EPS estimates only once [2] Stock Performance - AGNC Investment shares have increased by approximately 0.4% since the beginning of the year, while the S&P 500 has gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.39 on revenues of $276.48 million, and for the current fiscal year, it is $1.67 on revenues of $949.53 million [7] Industry Outlook - The REIT and Equity Trust industry, to which AGNC Investment belongs, is currently in the bottom 20% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the company's stock performance may be influenced by these revisions [5][6]