AGNC (NASDAQ: AGNC ), a leveraged model, invests in mortgage back securities spiking the returns by funding its investments with lower interest rate entities. Hedges using interest rate swaps, US based securities and other types protect the investments from major volatilityI have been an investor for several decades enduring the 87 crash, 2000 crash, and 08 crash. I do use trading systems developed with TradeStation. I have enjoyed the rewards from both buy and hold and trading. My professional experiences ...

Core Viewpoint - AGNC Investment Corp is a real estate investment trust (REIT) primarily investing in agency-backed mortgage securities, categorized as an mREIT, and has faced criticism regarding its investment appeal [1]. Company Overview - AGNC Investment Corp operates in the real estate sector, focusing on agency-backed mortgage securities, which are a significant part of its investment strategy [1]. Analyst Background - The author has a background in history, political science, and an MBA with a specialization in Finance and Economics, indicating a strong analytical foundation for evaluating investment opportunities [1]. Investment Focus - The company emphasizes income investing through various financial instruments, including common shares, preferred shares, and bonds, reflecting a strategy aimed at generating consistent returns [1].

AGNC Investment Corp. (AGNC) and Annaly Capital Management (NLY) are two of the biggest names within the mortgage real estate investment trusts (mREITs) industry. Both offer favorable long-term stockholder returns and massive dividend yields.But which one offers the better opportunity for investors right now? Let us break down the strengths, risks and growth potential of these two leading industry players.AGNC & NLY: Business Model & Portfolio DiversificationAGNC has maintained its focus entirely on agency ...

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]

Investors might want to bet on AGNC Investment (AGNC) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. ...

AGNC Investment (AGNC 1.83%) has one of the highest dividend yields around. At over 17%, it's more than 10 times higher than the broader market (the S&P 500's dividend yield is less than 1.5%). Usually, a dividend yield that high tends to indicate that a cut is forthcoming. However, a payout reduction doesn't seem to be in the cards for AGNC Investment. Instead, the company believes it's a good investment in the current market.In a strong position to handle instability AGNC Investment is a real estate inves ...

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].