Every AGNC Investment Investor Should Keep an Eye on This Number

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]