AGNC Investment Corp.: Why I Would Prefer Half the Dividend and 100% More Certainty

Group 1 - Real Estate Investment Trusts (REITs) are designed to pass income to shareholders through significant dividend payments, avoiding corporate-level taxation by distributing at least 90% of taxable income [2][4] - REITs provide small investors access to income-producing assets like apartment buildings and malls, making them a viable option for income investors [3] - Not all REITs are equal; they can face challenges such as overexpansion and excessive debt, and there are different types, including property owners and mortgage REITs [4] Group 2 - AGNC Investment offers a high dividend yield of over 13%, while Realty Income has a lower yield of 5.5%, yet Realty Income is preferred for its consistent dividend growth [5][10] - AGNC Investment has experienced multiple dividend cuts, while Realty Income has increased its dividend for three decades, leading to a significant difference in per-share dividend payments over time [10][11] - Realty Income is characterized as an income stock focused on generating reliable and increasing dividends, while AGNC aims for total return through reinvestment of dividends, making it less suitable for long-term income investors [12][13][14]