Latest news with #AGNCInvestment
Yahoo
2 days ago
- Business
- Yahoo
Should You Buy AGNC Investment While It's Below $10?
AGNC Investment is a mortgage REIT with a huge 15%+ dividend yield. The mREIT explicitly tells investors what it is worth every single quarter. Opportunities do arise to buy AGNC Investment "on the cheap." 10 stocks we like better than AGNC Investment Corp. › The big draw with AGNC Investment (NASDAQ: AGNC) is its almost-too-good-to-believe 15%+ dividend yield. Don't get overly excited, however. The real estate investment trust (REIT) is pretty clear that it is a total return investment and not an income investment. That means you need to be extra careful when you buy the stock, since overpaying could materially crimp your returns. Here's what you need to know. AGNC Investment is a mortgage REIT. It buys mortgages that have been pooled into bond-like securities. The goal is to make the difference between the interest paid on those mortgage securities and the REIT's operating costs (which include the cost of leverage). A lot of companies do the same thing. AGNC Investment is clear about its goals, however, and dividend investors need to listen to what management says. According to the company's home page, the objective is "favorable long-term stockholder returns with a substantial yield component." That means that total return is the goal, not income. In order to fully benefit from AGNC Investment, you need to reinvest the dividends you collect. Since many dividend investors are looking to live off the income they generate, this REIT is not going to be a good option for a lot of people. However, if total return is your goal, there's a unique twist here that's worth keeping in mind. Because AGNC Investment's assets are largely made up of the mortgage securities it owns, it is kind of similar to a mutual fund. And like a mutual fund, AGNC Investment reports the value of its portfolio on a per-share basis. In the case of a mutual fund, this figure is net asset value (NAV), and it is reported at the end of every trading day. For AGNC Investment, the number to watch is tangible net book value per share, and it's reported each quarter. Clearly, finding out what AGNC Investment is worth each quarter means you are working with old data. But that doesn't mean it's useless. For example, in the first quarter of 2025, the mortgage REIT's tangible net book value per share was $8.25. The stock price today is closer to $9, and nothing material has happened that would suggest that the value of the company's portfolio has increased dramatically. That makes the question of whether or not to buy AGNC Investment below $10 pretty easy. Yes, you want to pay less than $10. In fact, you want to pay less than $8.25, if you can. What's interesting here is that emotions play a very big role in AGNC Investment's share price. When investors are optimistic, it can trade way above tangible net book value per share. And when investors are pessimistic, it can trade below that figure. The chart above shows the price swings over the past year. The high-water mark over that span was $10.66, which meant investors were paying a huge premium for the stock. But the low point was $8.12 per share, which was below tangible net book value per share. In other words, patient total return investors can actually get a good deal here, if they keep a close eye on the value of the business. To be fair, tangible net book value per share is only a rough gauge here, since the data is only provided once per quarter. However, that doesn't mean you should ignore the figure. When AGNC Investment was trading for more than $10 per share, it was very clearly being afforded a material premium. Indeed, if you're looking to buy this mREIT, why not use every tool at your disposal? Buying at or below the most recent tangible net book value per share is one way to increase the chances of getting a good price. That, in turn, will help to maximize the total return you achieve over time. Before you buy stock in AGNC Investment Corp., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AGNC Investment Corp. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Should You Buy AGNC Investment While It's Below $10? was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Business Insider
3 days ago
- Business
- Business Insider
Bank of America Securities Sticks to Their Buy Rating for Blackstone Secured Lending Fund (BXSL)
Bank of America Securities analyst Derek Hewett reiterated a Buy rating on Blackstone Secured Lending Fund (BXSL – Research Report) on May 30 and set a price target of $33.50. Confident Investing Starts Here: Hewett covers the Real Estate sector, focusing on stocks such as AGNC Investment, Apollo Real Estate, and Safehold. According to TipRanks, Hewett has an average return of 6.9% and a 64.85% success rate on recommended stocks. The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Blackstone Secured Lending Fund with a $31.67 average price target.
Yahoo
4 days ago
- Business
- Yahoo
1 No-Brainer High-Yield Stock to Buy With $1,000 Right Now
Investors often take on more risk than they realize when buying high-yield dividend stocks. AGNC Investment has a massive 16% dividend yield. Toronto-Dominion Bank has a more sustainable and reliable 4.5% yield. 10 stocks we like better than AGNC Investment Corp. › If you have $1,000 to invest and are looking for high-yield stocks, you might be tempted to try to maximize income. You could do that with the purchase of a stock like AGNC Investment (NASDAQ: AGNC), which has a huge 16%+ dividend yield. Here's why it would be a no-brainer to buy Toronto-Dominion Bank (NYSE: TD) instead, despite a much lower yield. AGNC Investment is a mortgage real estate investment trust (REIT), a fairly complicated niche of the REIT sector. The company buys mortgages that have been rolled up into bond-like securities. The goal is to make the difference between the interest it collects on the securities it buys and its operating costs. The REIT uses leverage in an attempt to enhance returns, and that huge 16%+ yield isn't actually as attractive as it seems. As the chart below highlights, AGNC Investment's dividend has been in decline for years after a brief jump following its initial public offering (IPO). The share price has tracked along with the dividend, jumping after the IPO and then steadily declining. Technically speaking, investors have made out OK because AGNC Investment has paid out more in dividends than it has lost in share price. But that's a nuanced view of things. Most dividend investors are looking to own stocks that have stable to growing dividends and stable to growing stock prices. Reaching for yield with AGNC Investment is likely to leave you with a bad taste in your mouth if you need income to pay for living expenses. Toronto-Dominion Bank, or TD Bank for short, is a much more reliable dividend stock. Yes, the 4.5% yield is much lower, but the dividend hasn't been cut regularly, even during hard times. For example, TD Bank didn't have to reduce its dividend during the Great Recession like many of its U.S. peers. And it increased the dividend at the start of 2025, despite facing some company-specific troubles. While TD Bank's dividend yield is lower than that of AGNC Investment, it is actually high in other ways. For starters, it's high relative to the 1.3% yield of the S&P 500 index (SNPINDEX: ^GSPC). It is high relative to the finance industry's 2.7%, and it is historically high for TD Bank. In fact, the last time the dividend was as high as it is today was during the Great Recession and the coronavirus pandemic's height. In other words, TD Bank is offering an attractive yield. The dividend is so high because TD Bank's U.S. business has weak internal controls against money laundering and it was used for that purpose. U.S. regulators were not pleased and have barred the company from growing in the U.S. market until they're satisfied that the internal control weakness is resolved. TD Bank's large and diversified Canadian business is still doing just fine, but the U.S. division was expected to be the bank's growth engine. It could take a few years to resolve this issue, and investors have shunned the stock because of this. Only TD Bank remains a strong financial institution with little risk of a dividend cut. In fact, the bank reported second-quarter 2025 earnings that beat Wall Street expectations. In other words, the business is managing well even in the face of adversity. It is, at the end of the day, a relatively low-risk and still high-yield turnaround play. If you think you've found a dividend stock that will provide you with a reliable income stream with AGNC Investment, well, history suggests you could be in for a very bad surprise. If you temper your income expectations and buy TD Bank right now, however, you'll likely be setting yourself up for years of reliable dividends and a stock price recovery as it works through its company-specific headwinds. Before you buy stock in AGNC Investment Corp., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AGNC Investment Corp. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Reuben Gregg Brewer has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 1 No-Brainer High-Yield Stock to Buy With $1,000 Right Now was originally published by The Motley Fool
Yahoo
6 days ago
- Business
- Yahoo
AGNC Investment Thrives on Portfolio Management Amid Market Volatility
AGNC Investment Corp. AGNC continues to navigate the evolving financial landscape with an active portfolio management strategy, leveraging interest rate hedges and strategic asset repositioning to mitigate risks. While the company has maintained a solid liquidity position, challenges such as market volatility and yield curve fluctuations remain key factors influencing its performance. Strong Portfolio Management: AGNC Investment adheres to an active portfolio-management policy, continuously re-evaluating and adjusting its holdings to optimize returns. The company is operating in a more defensive position with significant hedge protection due to market volatility. As of March 31, 2025, the company-maintained interest rate hedges covering 91% of its investment securities, reinforcing its defensive stance against market uncertainties. Additionally, AGNC has trimmed non-agency holdings and increased exposure to higher-coupon securities, aiming for greater stability in cash flows. Agency MBS Investments Driving Returns: The company's investment in Agency mortgage-backed securities (MBS) continues to drive attractive risk-adjusted returns, supported by government-sponsored enterprise guarantees on principal and interest payments. With $77.9 billion in Agency MBS holdings, AGNC is positioned to capitalize on spread-widening opportunities in the fixed-income market. Stable Financial Position: AGNC displays a decent financial position. The company's liquidity position remains strong, with $6 billion in unencumbered cash and Agency MBS, providing flexibility for future investments. The company's leverage increased modestly to 7.5X at the end of the first quarter (from 7.2X in the prior quarter). Operating at a conservative leverage level, in anticipation of any spread widening, will enable the company to deploy capital in investment opportunities in the upcoming period. Impressive ROE: The company's return on equity (ROE) of 20.36% compares favorably with the industry average of 7.82%, indicating its superiority in managing shareholders' funds. Volatile Mortgage Market: The performance of mortgage REITs is influenced by the overall financial markets and economic conditions. Factors like mortgage market volatility, changes in the yield curve, interest-rate fluctuations, and worsening financial conditions can impact investment performance. In recent years, the financial markets have seen high volatility. In response to market challenges, the company cut its dividend by 25% in 2020 and has continued to maintain that amount. Fluctuating Interest Rates: The company is changing its investment portfolio to sync with current interest rates and the global economy. The company is cutting its portfolio size by reducing Agency RMBS due to the Federal Reserve's actions and market volatility. It focuses on managing risk and liquidity and reducing leverage, but expects strong returns to be difficult in the short term. Further, AGNC Investment uses hedging strategies to manage interest rate changes, but these do not protect against shifts in tangible net book value from spread changes with benchmark rates. Over the past month, shares of the company have risen 3.1% compared with the industry's growth of 4.3%. Image Source: Zacks Investment Research AGNC currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks worth a look are Ares Commercial Real Estate ACRE and DigitalBridge Group DBRG, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here. Estimates for ACRE's current-year earnings have been revised upward in the past 30 days. The company's shares have risen 13.3% over the past month. Estimates for DBRG's current-year earnings have remained unchanged for the past 30 days. The company's shares have gained 33.6% over the past month. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AGNC Investment Corp. (AGNC) : Free Stock Analysis Report Ares Commercial Real Estate Corporation (ACRE) : Free Stock Analysis Report DigitalBridge Group, Inc. (DBRG) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
These Monster Dividend Stocks Can Turn $1,000 Into Over $100 in Passive Income Each Year
AGNC Investment's strategy earns high returns to pay its lucrative monthly dividend. Annaly Capital Management recently raised its prodigious payout. Delek Logistics Holdings has increased its monster income stream for 49 straight quarters. 10 stocks we like better than AGNC Investment Corp. › Many companies pay dividends. However, some companies pay monster dividends. That's due to a combination of their structure and business model. AGNC Investment (NASDAQ: AGNC), Annaly Capital Management (NYSE: NLY), and Delek Logistics Partners (NYSE: DKL) are monster dividend stocks, boasting yields above 10%. They could turn a $1,000 investment into over $100 of annual passive income at that rate. Here's a closer look at these big-time dividend stocks. AGNC Investment provides its investors with a prodigious passive income stream. The mortgage-focused real estate investment trust (REIT) currently has a more than 16% dividend yield. That's over 10 times higher than the S&P 500's dividend yield of less than 1.5%. As a REIT, AGNC Investment needs to pay out at least 90% of its taxable net income in dividends, which is a big factor driving its monster yield. The company's business model also plays a role in its outsize yield. It invests in mortgage-backed securities (MBSes) backed by government agencies (e.g., Fannie Mae) on a leveraged basis. Leverage can boost returns. For example, the company's CEO noted on its first-quarter earnings conference call that it can earn a return in the low 20% range by leveraging its portfolio in the current environment. That enables it to earn more than enough income to cover its operating expenses and monthly dividend payments. However, leverage can drag down returns when market conditions deteriorate. That has happened in the past, causing the REIT to cut its dividend quite a few times over the years. Annaly Capital Management is also a mortgage REIT. Like AGNC, it invests in Agency MBS, which makes up the bulk of its investment portfolio. It also invests in non-agency residential mortgages like jumbo loans and mortgage servicing rights (MSRs). Residential credit investments have higher risk profiles and return potential, while MSRs are lower leveraged and less risky investments. The REIT currently has a dividend yield approaching 15%. It recently gave investors a surprise dividend increase. It could afford to boost its payout because its earnings have improved. If that upward trajectory continues, Annaly could increase its payment again. However, the opposite is also true. The REIT has had to cut its dividend payment several times in the past because of a decline in its earnings. That makes it a higher-risk, higher-reward income stock like AGNC. Delek Logistics Partners is a master limited partnership (MLP). MLPs are pass-through entities that typically distribute much of their income to investors and consequently send their investors a Schedule K-1 Federal Tax Form each year. Delek Logistics Partners currently provides its investors with a prodigious income stream that yields nearly 10.5%, the highest in the energy midstream sector. The MLP stands out from the two REITs on this list because it has steadily increased its distribution. It has raised its payout for 49 straight quarters and grown it by 3.7% over the past year. The MLP's business model generates relatively stable cash flow backed by long-term contracts with its parent company, refiner Delek US Holdings, and third-party customers. It has been steadily reducing its reliance on Delek by growing its earnings from outside clients, from 41% in 2023 to 80% this year. Delek Logistics Partners grows its earnings by investing in expansion projects and making acquisitions. It recently closed its Gravity Water Midstream acquisition and started its Libby 2 processing plant. The MLP's growth-related investments help support its steadily rising distribution. It has a decent amount of financial flexibility, which should fuel its continued expansion. AGNC Investment, Annaly Capital Management, and Delek Logistics Partners have yields above 10%. That makes them very lucrative investments for generating passive income. However, higher risk profiles come with higher yields, evidenced by the prior payout cuts by AGNC and Annaly. Still, they're enticing options for investors seeking the potential of earning an outsize income stream and are comfortable with the possible risks of a future payout cut. Before you buy stock in AGNC Investment Corp., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and AGNC Investment Corp. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool recommends Delek Us. The Motley Fool has a disclosure policy. These Monster Dividend Stocks Can Turn $1,000 Into Over $100 in Passive Income Each Year was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
