Core Viewpoint - AGNC Investment offers a high dividend yield of 14.5%, significantly above the S&P 500's yield of approximately 1.2%, but this alone is not a sufficient reason to invest in the stock [1]. Company Overview - AGNC Investment operates as a mortgage real estate investment trust (REIT), which means it invests in mortgage securities rather than physical properties, and it must distribute at least 90% of its taxable earnings as dividends to maintain its REIT status [2]. - The company utilizes both its capital and borrowed funds to purchase mortgage securities, earning income from the difference between its costs and the interest earned on these securities [2]. Financial Performance Factors - AGNC's financial performance is influenced by various factors including interest rate changes, housing market conditions, mortgage repayment rates, and the age of the mortgage securities [3]. - The complexity of the mortgage market makes it challenging for investors to track AGNC's portfolio performance effectively [3]. Dividend History and Trends - Historically, AGNC has maintained a high dividend yield, often exceeding 10%, but the current yield is considered average compared to its historical performance since its IPO [4]. - The actual dividend payments have shown volatility and a downward trend over the past decade, which indicates that investors may have experienced a shrinking income stream despite the high yield [5][6]. Yield vs. Dividend Payment - The high yield can be misleading as it is calculated based on the annualized dividend payment divided by the share price; thus, a falling dividend alongside a declining share price can maintain a high yield [6]. - Investors who relied on AGNC's yield for income may have ended up with reduced capital and income, especially if they did not reinvest dividends [6][7]. Investment Suitability - AGNC Investment is not primarily an income stock; it is better suited for total-return investors who plan to reinvest dividends rather than spend them [8]. - For those seeking exposure to the mortgage market and willing to reinvest dividends, AGNC could be a valuable addition to a diversified investment portfolio [8].

Core Viewpoint - The market environment is improving for AGNC Investment, a mortgage REIT, which has seen a 20% increase in stock price and offers a forward yield of almost 14% through its monthly dividend [1] Group 1: Financial Performance - AGNC's book value (TBV) has increased by 5% or $0.42 to $8.82 in the third quarter, marking the third rise in four quarters from a low of $8.08 a year ago [3] - The average net interest spread for AGNC fell to 2.21%, down from 3.03% a year ago and 2.69% in the second quarter [4] - The constant prepayment rate (CPR) increased to 7.3% from 7.1% in the third quarter, indicating a rise in prepayments expected to continue [4] Group 2: Market Conditions - The yield curve is showing signs of normalizing, which is beneficial for AGNC as it typically borrows short-term to invest in long-term securities [3] - The spread between Treasury and mortgage rates has narrowed from historically high levels of over 3% to approximately 2.25%, which could positively impact AGNC's TBV [5] Group 3: Future Outlook - AGNC's TBV could increase by more than 11% with a 25 basis point narrowing of spreads and more than 22% with a 50 basis point narrowing [5] - The company is in a solid position with the Federal Reserve beginning to lower interest rates, and its dividend is well covered by earnings [5][6]

Core Insights - AGNC Investment Corporation is a mortgage real estate investment trust that is expected to benefit from the central bank's recent rate cut [1] - The company's third quarter profit exceeded expectations, with a 5% quarter-over-quarter increase in book value [1]

I 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 includes several decades as a process control engineer. I hold a JD from an eastern law school.Analyst’s Disclosure: I/we have a beneficial long position in the shares of AGNC either through stock ownership, options, or other derivatives. I wrote this article myself, and it ...

Changes in market conditions can impact the REIT's big-time dividend.AGNC Investment (AGNC -3.56%) is a leader in investing in the Agency residential mortgage-backed securities (MBS) market (i.e., MBS protected from credit losses by government agencies like Fannie Mae). The company has a massive MBS portfolio (over $71.8 billion). It also has extensive experience navigating the MBS market and can tell when changes are in the air. It sees the Federal Reserve's recent rate cut as a catalyst for a big change i ...

Both offer high dividend yields. Here's what you need to know before you buy.If you're looking for stocks that pay you to hold them, now is a great time to look at the telecommunications and specialty finance industries.Shares of Verizon (VZ -5.03%) offer an attention-getting 6.5% dividend yield at recent prices. AGNC Investment Corp. (AGNC -3.56%), a real estate investment trust (REIT) with a huge portfolio of mortgages, offers a giant 14.0% yield.If all you look at are dividend yields, AGNC seems like the ...

AGNC Investment Corp.’s (AGNC) third-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 43 cents missed the Zacks Consensus Estimate of 47 cents. Also, the bottom line declined from the 65 cents reported in the previous quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Adjusted net interest and dollar roll income of $420 million moved down 12.9% from the previous quarter.The company reported a third- ...

Financial Data and Key Metrics Changes - AGNC reported total comprehensive income of $0.63 per share for Q3 2024, with an economic return on tangible common equity of 9.3%, consisting of $0.36 in dividends and a $0.42 increase in tangible net book value, representing a 5% increase [11] - The tangible net book value per common share decreased by about 3% in October, approximately 3.5% after accounting for monthly dividend accrual [11] - Leverage decreased to 7.2 times tangible equity from 7.4 times in Q2 [11] Business Line Data and Key Metrics Changes - The average projected life CPR for the portfolio increased by 4% to 13.2%, while actual CPRs averaged 7.3%, up from 7.1% in Q2 [12] - Net spread and dollar roll income declined by $0.10 to $0.43 per common share, driven by a reduction in the net interest-rate spread, which narrowed by approximately 50 basis points to just above 220 basis points [12] Market Data and Key Metrics Changes - The yield curve ended the quarter with a positive slope for the first time in two years, with two-year and 10-year treasury yields declining significantly [6][14] - Agency MBS spreads remained in a relatively narrow trading range, which is favorable compared to the highly volatile spread environment during the Fed's aggressive tightening [7][15] Company Strategy and Development Direction - The company anticipates that Agency MBS spreads will remain in the current trading range, supported by balanced supply and demand dynamics [9] - AGNC is focusing on longer-term treasury-based hedges, reducing swap-based hedges, to better position for expected yield curve steepening [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the mortgage market outlook, citing improved economic conditions and a favorable monetary policy environment [10] - The company expects increased demand for high-quality fixed-income assets as the Fed reduces short-term interest rates [9] Other Important Information - AGNC issued $781 million of common equity through its at-the-market offering program, which contributed to book-value accretion [13] - The company added about $5 billion in Agency MBS during the third quarter, increasing its investment portfolio to $72.1 billion [16] Q&A Session Summary Question: Changes to hedges and curve steepening - Management confirmed that the shift towards longer-dated hedges positions the company better for curve steepening, with a hedge ratio reduced to 72% from 98% [20] Question: Core earnings and economic returns - Management indicated that core earnings should converge with economic returns, with expectations of a 17% return on equity [22] Question: Return expectations in Agency MBS - Management feels confident about the current dividend level, with expectations that Agency MBS spreads will remain stable [26] Question: Impact of recent market volatility - Management acknowledged a 3.5% decline in book value due to recent treasury rate increases but remains optimistic about the mortgage market outlook post-election [32][34] Question: Delta hedging and leverage management - Management plans to be more active in delta hedging but does not anticipate changes to leverage levels [35] Question: Prepayment environment and servicing capacity - Management noted that the prepayment response has been slower than during COVID, with current capacity not being an issue [48] Question: MBS spread sensitivity and performance - Management explained that MBS spread sensitivity is measured by shocking each coupon and assessing performance against a hedged benchmark [50][51] Question: Future coupon trends - Management expects an upward trend in average coupon rates as the portfolio reallocates towards higher coupons [56]

4 2 0 Q3 OCTOBER 22, 2024 THE PREMIER AGENCY RESIDENTIAL MORTGAGE REIT 2 STOCKHOLDER PRESENTATION © 2024 AGNC Investment Corp. All Rights Reserved. IMPORTANT NOTICES Safe harbor statement under the private securities litigation reform act of 1995 This presentation contains statements that, to the extent they are not recitations of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). All such forward-looking st ...

Happy mature family couple managing household budgetgettyIf there’s anything better than monthly dividends, well, we contrarians don’t want to know about it. Getting paid on the same schedule as our bills (monthly!), makes retirement planning easy.We still need enough yield, though, to get rid (and stay rid) of our day jobs. Our pile of savings is what it is at this point, so we look to larger dividends to do the heavy lifting for us.The S&P 500, needless to say, won’t cut it. First, the “SPY Principal Shar ...