The latest trading day saw AGNC Investment (AGNC) settling at $9.48, representing a -1.25% change from its previous close.
Real estate investment trusts (REITs) are designed to pass income on to investors in a tax-advantaged manner. So it is understandable that dividend investors pay a lot of attention to REIT dividends and yields.
Many companies return a portion of their profits to investors in dividends. That enables their shareholders to generate some extra income each year.
This Impressive Monthly Dividend Stock Currently Pays Over 10 Times More Than the S&P 500
Key Points Passive income is a steady stream of unearned income that doesn't require active traditional work.
Is it the right time to buy this REIT for its 15% yield?
AGNC Investment (AGNC) reported earnings 30 days ago. What's next for the stock?
Key Points As expected, the Federal Reserve lowered interest rates by 25 basis points.
Amid a major political shift in the United States, investors may understandably be uncertain about how to distribute their assets. Some anticipate a new administration to be a boon for stocks thanks to loosened regulations and the potential for lower corporate taxes.
AGNC's 15% dividend yield is attractive but unsustainable long-term due to expiring low-cost swaps and rising interest expenses. AGNC's business model involves high leverage and hedging, making it vulnerable to interest rate volatility and declining book value. AGNC is not a buy-and-hold investment; it requires market timing, focusing on price-to-book value and stable interest rates for optimal returns.
Looking for high yields? You'll want to avoid dividends that are at risk of being cut and stick to dividends that have grown over time.
The Federal Reserve's 25 basis point rate cut is set to benefit AGNC Investment, enhancing profitability and potentially increasing its valuation multiplier due to lower interest costs. AGNC Investment's interest income grew 28% Y/Y in Q3, while interest expenses rose 27%. Lower financing costs imply improving spread potential. AGNC's book value, previously hit by rising rates, could normalize and reprice upwards, making it a promising investment as the Fed cuts rates.