Here's Why You Shouldn't Buy AGNC Investment if It's Over This Price

Core Viewpoint - AGNC Investment offers an attractive dividend yield of over 14%, but potential investors should carefully consider the associated risks and the price they pay for the stock [1][2][3] Dividend Yield and Risks - The S&P 500 index yields 1.2% and the average REIT yields approximately 3.9%, making AGNC's yield appear very appealing for income-focused investors [2] - High yields are common in the REIT sector, but a 14% yield indicates additional risks that investors must acknowledge [3] - AGNC has experienced a steady decline in dividends over the years, which is contrary to the expectations of most dividend investors [4][5] Stock Price and Tangible Net Book Value - AGNC's stock price is closely tied to its portfolio value, which is represented by its tangible net book value per share, reported at $8.41 at the end of Q4 2024 [7] - The tangible net book value fluctuates daily based on various factors, including interest rates and housing market dynamics [8] - If AGNC's stock price exceeds its tangible net book value, investors may be overpaying for the stock [9] Equity Issuance and Book Value Accretion - In Q3 2024, AGNC issued$781 million in common equity, benefiting from a price-to-book premium, which contributed to book value accretion [10] - The CFO noted that the premium allows the company to acquire more securities than it could at the current market rate [10] Investment Considerations - Investors should avoid paying above the tangible net book value unless they have strong conviction that the value will increase [11][12] - Given the complex nature of AGNC's investment profile, conservative dividend investors may be better off avoiding this stock [13]