Core Viewpoint - AGNC Investment is primarily recognized for its high dividend yield of 14%, attracting dividend investors, but its focus is on total returns rather than consistent income generation [1][3]. Company Overview - AGNC Investment operates as a mortgage real estate investment trust (REIT), which involves buying mortgages pooled into bond-like securities, making it more complex than traditional property-owning REITs [2][3]. - The company employs leverage to enhance returns, which is backed by the value of its mortgage securities portfolio [2]. Financial Performance - Since its inception, AGNC Investment has averaged a total return of about 10% per year, aligning with broader market expectations [4]. - In 2024, AGNC paid out $1.44 per share in dividends while generating $1.88 in net spread and dollar roll income per common share, resulting in a payout ratio of approximately 77%, indicating a reasonable level of dividend safety for the near term [5]. Dividend History and Strategy - The dividend has experienced fluctuations, including a spike post-IPO followed by a reduction, which negatively impacted both income and capital for those relying on dividends for living expenses [6]. - Reinvesting dividends has proven beneficial for total returns, contrasting with the experience of those who spent their dividends [6]. Investment Considerations - For short-term investors seeking dividend income, AGNC Investment may be a viable option in the upcoming year [7]. - Long-term investors focused on total returns may find AGNC Investment a solid choice, but it may not suit long-term dividend investors looking for reliable income [7].

Core Insights - AGNC Investment Corp. has announced a leadership change, with Peter Federico becoming both President and CEO, and Chief Investment Officer, while Christopher Kuehl transitions to Head of Investment Research and Strategy [1][2] - The company aims to adapt to the evolving macroeconomic environment and leverage advancements in financial technology and data analysis to enhance investment decision-making and portfolio management [2][3] Company Overview - AGNC Investment Corp. is a prominent investor in Agency residential mortgage-backed securities (Agency MBS), which are backed by guarantees from Fannie Mae, Freddie Mac, or Ginnie Mae [3] - The company employs a leveraged investment strategy, primarily financing its Agency MBS assets through repurchase agreements, and utilizes dynamic risk management strategies to mitigate interest rate and market risks [3][4] Financial Performance - AGNC has a strong track record of delivering long-term returns to shareholders, having paid over $14 billion in common stock dividends since its inception [4]

Core Insights - Agency mortgage REITs are currently experiencing high price-to-book ratios, with Orchid Island Capital (ORC) also showing a premium to estimated current book value [1][5] - The REIT Forum provides weekly estimates for these REITs, allowing for more timely insights compared to quarterly updates [2] - The gap between AGNC Investment Corp. (AGNC) and other agency mortgage REITs has narrowed, with AGNC maintaining the highest price-to-book ratio [5][11] Company Performance - Mortgage REITs hold significant amounts of mortgages and hedges, with positions disclosed quarterly, allowing for modeling of projected changes in asset and liability values [3] - AGNC and Annaly Capital Management (NLY) are noted for their size, which limits their nimbleness in portfolio repositioning [8] - NLY's book value has increased moderately, indicating a high valuation compared to historical norms [11] Sector Analysis - The spread between agency MBS and Treasuries remains favorable, contributing to higher net interest income [7] - The premiums to book value for agency mortgage REITs are widening, raising concerns about the risk/reward profile [7] - Other mortgage REITs may benefit from adopting strategies similar to agency mortgage REITs to avoid trading at discounts to book value [7] Investment Strategy - Preferred shares are favored for their yield while waiting for relative value swings in common shares [14] - The current allocation to common shares in the sector is low, with a preference for mortgage REITs that are not at historically high price-to-book ratios [15] - Treasury bill ETFs are receiving increased investment, reflecting a cautious approach in the current market environment [16]

Core Viewpoint - AGNC Investment offers a high dividend yield of 14%, attracting income investors, but its long-term performance and reliability are questionable compared to Bank of Nova Scotia and Brookfield Renewable [1][3][11] AGNC Investment - AGNC Investment's dividend rose quickly after its IPO in 2008 but began to decline in 2013, leading to a falling stock price [2] - Despite a high yield above 10% for most of its existence, the declining dividend and stock price resulted in less income and capital for investors [3] - The mortgage REIT sector is volatile, and dividend cuts are common, making AGNC Investment less favorable for long-term dividend investors [4][11] Bank of Nova Scotia - Bank of Nova Scotia has paid dividends since 1833, with a generally upward trend, although it did not increase its dividend in 2024 [5] - The bank is focusing on the U.S., Mexico, and Canada, having acquired a stake in KeyCorp to enhance its U.S. presence, and expects to resume dividend increases in 2025 [6] - The bank's current yield of 6.1% is attractive, and it is seen as a reliable dividend payer for long-term investors [6][7][11] Brookfield Renewable - Brookfield Renewable operates a diversified clean energy portfolio, including hydroelectric, solar, wind, storage, and nuclear assets [8] - The partnership share class offers a yield of 6.5%, while the corporate shares yield 5.2%, with a history of regular dividend increases [9] - Brookfield Renewable employs an active management approach, buying and improving clean energy assets, making it comparable to financial companies [9][10] - Its steadily rising dividend and high yield present an attractive alternative to AGNC Investment [10]

Core Viewpoint - AGNC Investment Corp. preferred shares are currently trading around $25, with a stripped yield of 6.11%, but a floating rate is expected to increase the yield to approximately 9.23% soon [1] Dividend Yield - The upcoming yield of around 9.26% is considered decent, positioning AGNC preferred shares among the lower risk options available [4] Potential Capital Gain - The yield to call is approximately 4.3%, which is annualized and not particularly exciting for investors [3] Floating Spread - The floating spread is set at 4.697% + 3-month SOFR + 0.26161%, which is average for preferred shares rated between 1.0 to 2.0 in risk [5] Market Context - Other AGNC preferred shares are trading at negative yields to call, indicating that investors are paying a premium for slightly higher floating spreads [6] - AGNC Investment Corp. 6.875 DEP REP D (AGNCM) is mentioned as a viable alternative, but AGNCP is preferred due to its better spread and similar yield to call [7] Investment Strategy - The current valuation does not present a compelling reason to add to the position, with a target buying range indicating a 6% difference between overpriced and reasonably priced shares [11] - The company acknowledges the impracticality of categorizing every investment as a buy or sell, emphasizing the importance of relative pricing opportunities [12]

Core Viewpoint - AGNC Investment offers a high monthly dividend yield of approximately 14%, significantly exceeding the S&P 500's yield, but concerns about the sustainability of this payout exist due to its size [1] Group 1: Dividend Sustainability - The dividend payout ratio is a critical metric for most dividend stocks, but AGNC Investment's use of leverage complicates this assessment [2] - The company employs dynamic risk management strategies to safeguard its portfolio from risks, which differentiates it from typical dividend stocks [2] Group 2: Earnings and Dividend Policy - Earnings-based financial metrics are not the best indicators of dividend stability for AGNC Investment, as stated by CEO Peter Federico [3] - Federico emphasized that the company focuses on current earnings rather than long-term earnings potential when determining its dividend policy [3] Group 3: Key Financial Metrics - The CEO highlighted that the total cost of capital hurdle rate versus expected return is crucial for dividend considerations, requiring a return on equity (ROE) of 16.7% to cover expenses and dividends [4] - Currently, the portfolio's ROE is between 17% and 18.5%, which aligns with the cost of capital and supports the maintenance of the dividend [5]

With its enticing high dividend yield of 14.3%, AGNC Investment Corporation (AGNC 1.02%) stands out as an intriguing choice for income-focused investors. The company pays out monthly dividends and is among the highest-yielding stocks available to investors today.While AGNC offers impressive dividends, its overall performance has been less than stellar in recent years. However, if interest rates stabilize, AGNC could find itself in a position to boost its share price. If you're contemplating an investment in ...

Join for a 100% Risk-Free trial and see if our proven method can help you too. You do not need to pay for the costly lessons from the market itself.My last article on AGNC Investment Corp. (NASDAQ: AGNC ) was published a bit more than a month ago. To wit, that article was titled "AGNC Investment: Let Your Profits Run" and wasSensor Unlimited contributes to the investing group Envision Early Retirement which is led by Sensor Unlimited. They offer proven solutions to generate both high income and high growth ...

AGNC is one of the market's highest-yielding REITs.AGNC Investment (AGNC 1.99%), with a forward dividend yield of 14.3% as of this writing, is one of the market's highest-yielding stocks. It also pays monthly dividends.That massive dividend might look tempting, but is it sustainable? Let's dig deeper into AGNC's business model to see if it's a high-yield trap or a viable income investment. AGNC isn't a traditional REITAGNC is a real estate investment trust (REIT). But unlike traditional REITs -- which buy p ...

Company Overview - AGNC Investment is a mortgage real estate investment trust (REIT) that aims for favorable long-term stockholder returns with a substantial yield component [2] - The company has a strong track record of total return, boasting a 10% annualized return since its IPO in May 2008 through to year-end 2024 [4] Dividend Performance - AGNC Investment has paid 58 consecutive monthly dividends at the same level since 2020, which may seem appealing to income investors [7] - However, the dividend has not increased with inflation, leading to a decrease in purchasing power for investors [8] - The dividend record prior to 2020 shows a long downtrend, which could result in a negative experience for income-focused investors [9] Total Return Analysis - The positive total return is attributed to AGNC Investment paying out more in dividends than the decline in stock price, allowing for long-term capital growth through dividend reinvestment [10] - This perspective on total return may not align with the typical income investor's expectations of reliable income [10] Investment Considerations - While AGNC Investment is a respected mortgage REIT, it may not be suitable for investors seeking to rely on dividends for living expenses [11] - The static dividend over the years does not guarantee reliability for income generation [11]