Should You Buy AGNC Investment Stock While It's Below $11?

Core Viewpoint - AGNC Investment offers a high forward dividend yield of 13.8% and has seen a stock price increase of approximately 10% over the past year, making it an attractive option for income-oriented investors [1][2]. Company Overview - AGNC Investment is a mortgage real estate investment trust (mREIT) that originates its own mortgages and purchases mortgage-backed securities (MBSes), rather than owning physical properties [2][3]. - The company generates net profits by booking interest from the mortgages and MBSes it holds, benefiting from high-interest-rate environments [3]. Financial Performance - In 2024, AGNC's net spread and dollar roll income per share decreased by 28% to $1.88 due to three consecutive interest rate cuts by the Federal Reserve, but still covered its$1.44 in dividends [7]. - Quarterly net spread and dollar roll income per share showed a sequential decline throughout 2024, with tangible net book value also shrinking year over year [7][8]. Market Position and Strategy - AGNC maintains a positive outlook for Agency MBS as the Federal Reserve shifts its monetary policy, preferring a stabilization of interest rates to support the mortgage market [8]. - The company allocates over 89% of its portfolio to Agency MBS assets, which are backed by government entities, significantly reducing credit risk [8]. - AGNC has a unique "captive" broker-dealer agreement with Bethesda Securities, allowing access to lower wholesale funding rates and reduced collateral requirements compared to other mREITs [8]. Investment Consideration - AGNC's stock trades at $10.47, representing a 24$8.41, with a sustainable high forward dividend yield of 13.8% that limits downside potential [9]. - The stock is considered a good buy for dividend-seeking investors, especially if interest rates decline further, making it more appealing compared to CDs and T-bills [10].