Is AGNC Investment a Better Dividend Stock Than Healthpeak Properties?

Core Viewpoint - AGNC Investment offers a high dividend yield of nearly 15%, significantly higher than the S&P 500's yield of less than 1.2% and more than double that of Healthpeak Properties at around 6.5% [1] AGNC Investment Analysis - AGNC Investment focuses solely on Agency mortgage-backed securities (MBSes), which are backed by government entities like Fannie Mae, Freddie Mac, and Ginnie Mae, yielding modest returns in the mid-single digits [2] - The company enhances its return potential by leveraging investments in MBSes through repurchase agreements, expecting a return on equity of 18% to 20% on new investments, sufficient to cover operating costs and dividends [3] - AGNC has maintained the same dividend rate for over five consecutive years, demonstrating its ability to navigate market volatility and sustain high returns [4] - Despite a significant increase in its asset portfolio from $58 billion in mid-2023 to $82.3 billion in mid-2024, the tangible net book value per share decreased from $9.39 to $7.81, indicating dilution of existing investors' shares [5] Healthpeak Properties Analysis - Healthpeak Properties owns a diversified portfolio of healthcare real estate, including outpatient medical buildings and senior housing, with tenants comprising top healthcare systems and biopharma companies [6] - The REIT's portfolio generates stable rental income, expected to grow by around 3% annually due to long-term leases with rent escalation clauses [7] - Healthpeak currently pays out about 75% of its adjusted funds from operations (FFO) as dividends, allowing for a comfortable cushion to fund new investments [8] - The REIT has maintained a steady dividend over the past five years and recently revamped its policy to a monthly payment schedule, increasing the dividend by 2% [9] - Healthpeak aims to grow shareholder value by increasing FFO per share, which should support share price and dividend growth over the long term [10] Dividend Yield Comparison - While AGNC offers substantial monthly income, its future income generation may decline if dividends are reduced [11] - Healthpeak Properties is viewed as a more stable dividend stock, likely to preserve and grow investment value while providing a growing stream of monthly dividends [12]