Analyst Profile - JR Research is recognized as a Top Analyst by TipRanks and Seeking Alpha, specializing in Technology, Software, Internet, Growth, and GARP [1] - The analyst focuses on identifying growth investing opportunities with attractive risk/reward upside potential, combining price action analysis with fundamentals [1] - The approach avoids overhyped and overvalued stocks, targeting battered stocks with significant recovery potential [1] Investment Strategy - The analyst runs the Ultimate Growth Investing group, which identifies high-potential opportunities across various sectors with an 18 to 24 month outlook [2] - The group targets growth stocks with robust fundamentals, buying momentum, and turnaround plays at highly attractive valuations [2] - The strategy emphasizes contrarian plays with strong growth potential and well-beaten stocks [2]

Core Viewpoint - AGNC Investment is a high-yield dividend stock, currently offering a monthly dividend with a yield exceeding 14%, significantly higher than the S&P 500's yield of 1.3% [1] Group 1: Dividend Stability - AGNC Investment has maintained its substantial dividend for 55 consecutive months, demonstrating resilience despite challenging market conditions [1][5] - The REIT has successfully covered its dividend payments for the past four and a half years, even during a period of rising interest rates that increased borrowing costs and narrowed investment spreads [2][5] Group 2: Investment Strategy - The company primarily invests in agency mortgage-backed securities (MBS), which are low-risk due to government backing, allowing for stable returns [2] - AGNC Investment employs leverage to enhance returns, profiting from the spread between borrowing costs and MBS yields [2] Group 3: Market Conditions - Recent shifts in Federal Reserve policy towards lower interest rates are expected to improve conditions in the agency MBS market, leading to more favorable spreads [4] - The management anticipates that MBS spreads will stabilize at historically favorable levels over the next one to two years, supporting the sustainability of the high-yield dividend [4] Group 4: Future Outlook - The REIT's management expresses confidence in aligning with its dividend policy and the economic performance of its portfolio, provided there are no significant unforeseen market volatilities [4][5] - As market conditions are projected to improve, AGNC Investment is well-positioned to maintain its current dividend level in the near future [5]

Core Viewpoint - AGNC Investment offers a high dividend yield of 14.5%, significantly above the S&P 500's yield of approximately 1.2%, but this alone is not a sufficient reason to invest in the stock [1]. Company Overview - AGNC Investment operates as a mortgage real estate investment trust (REIT), which means it invests in mortgage securities rather than physical properties, and it must distribute at least 90% of its taxable earnings as dividends to maintain its REIT status [2]. - The company utilizes both its capital and borrowed funds to purchase mortgage securities, earning income from the difference between its costs and the interest earned on these securities [2]. Financial Performance Factors - AGNC's financial performance is influenced by various factors including interest rate changes, housing market conditions, mortgage repayment rates, and the age of the mortgage securities [3]. - The complexity of the mortgage market makes it challenging for investors to track AGNC's portfolio performance effectively [3]. Dividend History and Trends - Historically, AGNC has maintained a high dividend yield, often exceeding 10%, but the current yield is considered average compared to its historical performance since its IPO [4]. - The actual dividend payments have shown volatility and a downward trend over the past decade, which indicates that investors may have experienced a shrinking income stream despite the high yield [5][6]. Yield vs. Dividend Payment - The high yield can be misleading as it is calculated based on the annualized dividend payment divided by the share price; thus, a falling dividend alongside a declining share price can maintain a high yield [6]. - Investors who relied on AGNC's yield for income may have ended up with reduced capital and income, especially if they did not reinvest dividends [6][7]. Investment Suitability - AGNC Investment is not primarily an income stock; it is better suited for total-return investors who plan to reinvest dividends rather than spend them [8]. - For those seeking exposure to the mortgage market and willing to reinvest dividends, AGNC could be a valuable addition to a diversified investment portfolio [8].

Core Viewpoint - The market environment is improving for AGNC Investment, a mortgage REIT, which has seen a 20% increase in stock price and offers a forward yield of almost 14% through its monthly dividend [1] Group 1: Financial Performance - AGNC's book value (TBV) has increased by 5% or $0.42 to $8.82 in the third quarter, marking the third rise in four quarters from a low of $8.08 a year ago [3] - The average net interest spread for AGNC fell to 2.21%, down from 3.03% a year ago and 2.69% in the second quarter [4] - The constant prepayment rate (CPR) increased to 7.3% from 7.1% in the third quarter, indicating a rise in prepayments expected to continue [4] Group 2: Market Conditions - The yield curve is showing signs of normalizing, which is beneficial for AGNC as it typically borrows short-term to invest in long-term securities [3] - The spread between Treasury and mortgage rates has narrowed from historically high levels of over 3% to approximately 2.25%, which could positively impact AGNC's TBV [5] Group 3: Future Outlook - AGNC's TBV could increase by more than 11% with a 25 basis point narrowing of spreads and more than 22% with a 50 basis point narrowing [5] - The company is in a solid position with the Federal Reserve beginning to lower interest rates, and its dividend is well covered by earnings [5][6]

Core Insights - AGNC Investment Corporation is a mortgage real estate investment trust that is expected to benefit from the central bank's recent rate cut [1] - The company's third quarter profit exceeded expectations, with a 5% quarter-over-quarter increase in book value [1]

I have been an investor for several decades enduring the 87 crash, 2000 crash, and 08 crash. I do use trading systems developed with TradeStation. I have enjoyed the rewards from both buy and hold and trading. My professional experiences includes several decades as a process control engineer. I hold a JD from an eastern law school.Analyst’s Disclosure: I/we have a beneficial long position in the shares of AGNC either through stock ownership, options, or other derivatives. I wrote this article myself, and it ...

Changes in market conditions can impact the REIT's big-time dividend.AGNC Investment (AGNC -3.56%) is a leader in investing in the Agency residential mortgage-backed securities (MBS) market (i.e., MBS protected from credit losses by government agencies like Fannie Mae). The company has a massive MBS portfolio (over $71.8 billion). It also has extensive experience navigating the MBS market and can tell when changes are in the air. It sees the Federal Reserve's recent rate cut as a catalyst for a big change i ...

Both offer high dividend yields. Here's what you need to know before you buy.If you're looking for stocks that pay you to hold them, now is a great time to look at the telecommunications and specialty finance industries.Shares of Verizon (VZ -5.03%) offer an attention-getting 6.5% dividend yield at recent prices. AGNC Investment Corp. (AGNC -3.56%), a real estate investment trust (REIT) with a huge portfolio of mortgages, offers a giant 14.0% yield.If all you look at are dividend yields, AGNC seems like the ...

AGNC Investment Corp.’s (AGNC) third-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 43 cents missed the Zacks Consensus Estimate of 47 cents. Also, the bottom line declined from the 65 cents reported in the previous quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Adjusted net interest and dollar roll income of $420 million moved down 12.9% from the previous quarter.The company reported a third- ...

Financial Data and Key Metrics Changes - AGNC reported total comprehensive income of $0.63 per share for Q3 2024, with an economic return on tangible common equity of 9.3%, consisting of $0.36 in dividends and a $0.42 increase in tangible net book value, representing a 5% increase [11] - The tangible net book value per common share decreased by about 3% in October, approximately 3.5% after accounting for monthly dividend accrual [11] - Leverage decreased to 7.2 times tangible equity from 7.4 times in Q2 [11] Business Line Data and Key Metrics Changes - The average projected life CPR for the portfolio increased by 4% to 13.2%, while actual CPRs averaged 7.3%, up from 7.1% in Q2 [12] - Net spread and dollar roll income declined by $0.10 to $0.43 per common share, driven by a reduction in the net interest-rate spread, which narrowed by approximately 50 basis points to just above 220 basis points [12] Market Data and Key Metrics Changes - The yield curve ended the quarter with a positive slope for the first time in two years, with two-year and 10-year treasury yields declining significantly [6][14] - Agency MBS spreads remained in a relatively narrow trading range, which is favorable compared to the highly volatile spread environment during the Fed's aggressive tightening [7][15] Company Strategy and Development Direction - The company anticipates that Agency MBS spreads will remain in the current trading range, supported by balanced supply and demand dynamics [9] - AGNC is focusing on longer-term treasury-based hedges, reducing swap-based hedges, to better position for expected yield curve steepening [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the mortgage market outlook, citing improved economic conditions and a favorable monetary policy environment [10] - The company expects increased demand for high-quality fixed-income assets as the Fed reduces short-term interest rates [9] Other Important Information - AGNC issued $781 million of common equity through its at-the-market offering program, which contributed to book-value accretion [13] - The company added about $5 billion in Agency MBS during the third quarter, increasing its investment portfolio to $72.1 billion [16] Q&A Session Summary Question: Changes to hedges and curve steepening - Management confirmed that the shift towards longer-dated hedges positions the company better for curve steepening, with a hedge ratio reduced to 72% from 98% [20] Question: Core earnings and economic returns - Management indicated that core earnings should converge with economic returns, with expectations of a 17% return on equity [22] Question: Return expectations in Agency MBS - Management feels confident about the current dividend level, with expectations that Agency MBS spreads will remain stable [26] Question: Impact of recent market volatility - Management acknowledged a 3.5% decline in book value due to recent treasury rate increases but remains optimistic about the mortgage market outlook post-election [32][34] Question: Delta hedging and leverage management - Management plans to be more active in delta hedging but does not anticipate changes to leverage levels [35] Question: Prepayment environment and servicing capacity - Management noted that the prepayment response has been slower than during COVID, with current capacity not being an issue [48] Question: MBS spread sensitivity and performance - Management explained that MBS spread sensitivity is measured by shocking each coupon and assessing performance against a hedged benchmark [50][51] Question: Future coupon trends - Management expects an upward trend in average coupon rates as the portfolio reallocates towards higher coupons [56]