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].

Core Viewpoint - The ongoing trade war and tariffs have significantly disrupted various sectors, including the bond markets, adversely affecting mortgage real estate investment trusts (mREITs) like AGNC Investment, which has faced a challenging operating environment recently [1] Group 1: Company Overview - AGNC Investment primarily holds a portfolio of mortgage-backed securities (MBSes) backed by government-sponsored agencies such as Fannie Mae and Freddie Mac, which are generally considered virtually risk-free from default [3] - The company has a current dividend yield of 17%, making it an attractive option for investors [2] Group 2: Financial Performance - AGNC's tangible net book value (TBV) per share fell from $8.41 at the end of 2024 to $8.25 in the first quarter of 2025, and further declined to between $7.75 and $7.85 as of April 9, 2025, with an additional drop of 7.5% to 8% noted during the earnings call [6][7] - The decline in TBV is attributed more to the widening spread between Treasuries and mortgages rather than an increase in interest rates, with the spread peaking at 230 basis points [6][7] Group 3: Market Conditions and Future Outlook - Management believes that the current wide spreads between Treasuries and mortgages are not likely to persist for long, presenting a compelling return opportunity for the company [8] - Favorable bank capital requirements are expected to increase demand for agency MBSes, which could help lower spreads and improve market conditions [9] - The potential privatization of Fannie Mae and Freddie Mac is not seen as a significant concern by management, as they expect the government to maintain a supportive role in the mortgage market [10] Group 4: Investment Considerations - If the current wide spread between Treasuries and mortgages is temporary, it may present a good buying opportunity for AGNC stock, as the company could make attractive investments and its portfolio may recover when spreads normalize [12] - While there are elevated risks in the current environment, including the potential privatization of GSEs, investors may consider cautiously entering AGNC stock [13]

Core Viewpoint - AGNC Investment has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for AGNC Investment suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions [9][10]. Recent Earnings Estimate Revisions - For the fiscal year ending December 2025, AGNC Investment is expected to earn $1.67 per share, reflecting an 11.2% decrease from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for AGNC Investment has increased by 2.3%, indicating a positive trend in earnings expectations [8].

Core Viewpoint - The article emphasizes the importance of focusing on dividend income rather than stock price volatility, especially in the current uncertain economic environment. It highlights three specific stocks that offer reliable dividends. Group 1: TD Bank - TD Bank's shares are nearly 30% below their 2022 highs, placing it in a bear market, which has resulted in a historically high yield of around 5% [2][3] - Despite regulatory challenges due to money laundering issues in its U.S. business, TD Bank's core Canadian operations remain strong, allowing it to sustain and grow its dividend, which was recently raised by 3% [3] - The bank's ability to provide a reliable and growing dividend makes it a low-risk investment opportunity for conservative investors [3] Group 2: Vici Properties - Vici Properties is a net lease REIT primarily investing in casinos, which is perceived as risky; however, it does not operate the casinos and will continue to receive rent payments regardless of the economic conditions [4][5] - The REIT has consistently increased its dividend since its IPO, with a current yield of 5.3%, supported by long-term leases that include inflation-based rent hikes [5] - Vici's business model is designed to maintain dividends even during economic downturns, making it a stable investment option [5] Group 3: Enbridge - Enbridge is a North American midstream company with reliable cash flows from transporting oil and natural gas, allowing it to increase its dividend annually for 30 consecutive years [6][7] - The company is diversifying its operations, with 25% of its business focused on regulated natural gas utilities and clean energy, positioning it for long-term sustainability [7] - Enbridge offers a dividend yield of 5.7%, appealing to investors looking for both current income and long-term growth potential [6][7]

Core Viewpoint - AGNC Investment offers a high dividend yield of over 17%, significantly higher than the S&P 500's yield of less than 1.5%, indicating a strong investment opportunity despite market volatility [1]. Group 1: Company Overview - AGNC Investment is a real estate investment trust (REIT) that invests in mortgage-backed securities (MBS) backed by government agencies, making it a low-risk investment [2]. - The company employs leverage to enhance returns, which increases its risk profile, but it believes this strategy will not pose problems in the current market [3]. Group 2: Financial Position - As of the end of the first quarter, AGNC had a tangible 'at risk' leverage of 7.5x and $6 billion in unencumbered cash and Agency MBS, indicating a strong liquidity position compared to its $78.9 billion investment portfolio [3]. - The REIT's investment portfolio produced an economic return of 2.4% in the first quarter, while its stock delivered a total return of 7.8% to investors despite a declining stock market [5]. Group 3: Market Environment - Market volatility has increased following tariff announcements, leading to wider Agency MBS spreads, but this has also increased anticipated portfolio returns [6]. - The current environment is viewed as compelling for MBS investments, with the potential for high returns on both levered and unlevered bases [6]. Group 4: Investment Outlook - AGNC Investment is positioned to weather market instability and continue generating sufficient returns to maintain its high monthly dividend, providing investors with a meaningful income stream [7]. - The company's returns, rather than earnings, are the primary driver of its dividend policy, suggesting a focus on return generation in the current market [6].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on AGNC Investment (AGNC), and highlights the importance of using these recommendations in conjunction with other analytical tools like Zacks Rank for making informed investment decisions [1][5][10]. Brokerage Recommendations for AGNC - AGNC Investment has an average brokerage recommendation (ABR) of 1.93, indicating a consensus between Strong Buy and Buy, based on recommendations from 15 brokerage firms [2][14]. - Out of the 15 recommendations, seven are classified as Strong Buy and two as Buy, which represent 46.7% and 13.3% of the total recommendations, respectively [2]. Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the highest price increase potential [5]. - Analysts from brokerage firms often exhibit a positive bias due to vested interests, leading to a disproportionate number of favorable ratings compared to negative ones [6][10]. Zacks Rank as an Alternative - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more reliable indicator of a stock's price performance in the near future [8][11]. - The Zacks Rank is updated more frequently than the ABR, reflecting timely changes in earnings estimates, which are strongly correlated with near-term stock price movements [12]. AGNC's Earnings Estimates - The Zacks Consensus Estimate for AGNC Investment has increased by 3.4% over the past month to $1.67, indicating growing optimism among analysts regarding the company's earnings prospects [13]. - This increase in consensus estimates, along with other factors, has resulted in a Zacks Rank of 2 (Buy) for AGNC Investment, suggesting a favorable outlook for the stock [14].

Group 1 - The article emphasizes a value investing approach, focusing on an owner's mindset and a long-term investment horizon [1] - The author does not engage in short selling or writing sell articles, indicating a preference for long-term investment strategies [1] - There is a clear separation between personal opinions and any potential business relationships with companies mentioned, ensuring unbiased analysis [2] Group 2 - The article does not provide specific investment recommendations or advice, highlighting the importance of individual investor suitability [3] - It clarifies that past performance is not indicative of future results, reinforcing the need for careful consideration in investment decisions [3]

Financial Data and Key Metrics Changes - 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% [15] - The net interest rate spread increased by 21 basis points to 2.12%, driven by higher asset yields and lower funding costs [17] - Quarter-end leverage increased to 7.5 times tangible equity, up from 7.2 times at year-end [15][16] Business Line Data and Key Metrics Changes - Net spread and dollar roll income increased by $0.07 to $0.44 per common share, attributed to a higher net interest rate spread and a larger asset base [16] - The average projected life CPR in the portfolio increased to 8.3% from 7.7% at year-end, while actual CPRs averaged 7% for the quarter, down from 9.6% in the previous quarter [18] Market Data and Key Metrics Changes - The agency MBS market experienced significant pressure, with the current coupon spread to a blend of 5- and 10-year treasury rates widening to 160 basis points [10] - The asset portfolio totaled $79 billion at quarter-end, up about $5 billion from the prior quarter, with 77% of assets having favorable prepayment characteristics [21][22] Company Strategy and Development Direction - The company believes that agency MBS provide compelling return opportunities, especially in light of the deteriorating economic outlook [13] - Regulatory relief is expected to lead to greater demand for agency MBS from banks, which could benefit the treasury and swap markets [23] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty is likely to remain elevated in the near term, but the outlook for agency MBS is favorable [14][23] - The management emphasized the importance of maintaining a strong liquidity position to navigate market volatility [45] Other Important Information - The company raised $509 million of common equity through its at-the-market offering program at a premium to tangible net book value, generating meaningful accretion for shareholders [16] - The weighted average coupon of the portfolio remained steady at just over 5% [22] Q&A Session Summary Question: Update on book value - Management indicated that the book value was down in the range of 7.5% to 8% as of the end of last week due to further mortgage spread widening [29] Question: Comfort level with the dividend - Management stated that the total cost of capital has increased, but expected returns still align well with that cost [36][39] Question: Managing extreme rate volatility - Management highlighted that a strong liquidity position allowed them to navigate the volatility without changing asset composition [44][46] Question: Outlook on leverage and hedge ratio - Management expressed comfort with current leverage levels and indicated that spreads at current levels allow for attractive returns without excessive leverage [52][54] Question: Changes to hedge portfolio - Management confirmed that there have not been any substantial changes to the hedge portfolio post-quarter end [100] Question: Prepayment environment and convexity risk - Management noted that the portfolio has more call risk than extension risk, with a significant portion having embedded prepayment protection [120][123] Question: Impact of levered investors on mortgage spreads - Management did not see any force deleveraging impacting the current repricing in the mortgage market, attributing it to bond fund redemptions instead [126][129]

Core Viewpoint - AGNC Investment Corp. reported a decline in net spread and dollar roll income per common share for Q1 2025, although it exceeded consensus estimates. The company faces challenges with lower tangible book value and net interest spread despite benefiting from increased asset yields [1][9]. Financial Performance - The net spread and dollar roll income per common share was 44 cents, surpassing the Zacks Consensus Estimate of 41 cents, but down from 58 cents in the same quarter last year [1]. - Comprehensive income per common share was 12 cents, a significant decrease from 48 cents in the prior year [2]. - Adjusted net interest and dollar roll income totaled $477 million, a 3.8% decline from the previous year [1]. - Net interest income was $159 million, missing the Zacks Consensus Estimate by 27.4%, with net interest expenses of $30 million [3]. - The average asset yield on the portfolio increased to 4.78% from 4.53% year-over-year [3]. Cost and Leverage - The combined weighted average cost of funds rose to 2.75% from 1.58% in the prior year [3]. - The average net interest spread decreased to 2.12%, down from 2.98% in the year-ago quarter [4]. - The average tangible net book value "at risk" leverage ratio was 7.3X, up from 7X year-over-year [4]. Investment Portfolio - As of March 31, 2025, the investment portfolio totaled $78.9 billion, including $70.5 billion in Agency mortgage-backed securities [6]. - The portfolio experienced an average actual constant prepayment rate of 7%, up from 5.7% in the previous year [4]. Book Value and Dividends - Tangible net book value per common share was $8.25, reflecting a 6.7% decline year-over-year [5]. - The economic return on tangible common equity was 2.4%, down from 5.7% in the prior year, including a dividend per share of 36 cents [5]. - The company declared a total dividend of 36 cents per share for the first quarter, with cumulative dividends of $14.3 billion since its IPO [8]. Market Position - AGNC Investment's first-quarter results were positively impacted by increased asset yields and portfolio repositioning, which help mitigate risks from higher interest rates and prepayments [9]. - The company currently holds a Zacks Rank 2 (Buy) [10].

STOCKHOLDER PRESENTATION Q1 | AGNC Common Stock | | | --- | --- | | Ticker | Nasdaq: AGNC | | IPO Date | May 2008 | | Market Capitalization | $9.1 B | | Total Dividends Paid Since IPO1 | $14.3 B | | Total Stock Return Since IPO2 | 427% | | Dividend Yield | 15.0% | APRIL 22, 2025 THE PREMIER AGENCY RESIDENTIAL MORTGAGE REIT © 2025 AGNC Investment Corp. All Rights Reserved. 2025 IMPORTANT NOTICES Safe harbor statement under the private securities litigation reform act of 1995 This presentation contains statem ...