AGNC - AGNC Investment: 14.8% Yield Makes Waiting For A Lower Rate Environment Bearable
2024-03-12 09:00:00 ET
Summary
- AGNC Investment Corp.'s shares have declined significantly since its inception, but there may be an opportunity for appreciation and a sizable dividend.
- The trend of declining share value and reduced dividends poses risks for investing in AGNC.
- I turn bullish on AGNC due to the potential for rate cuts by the Fed, which could unlock the housing market and lead to increased earnings and book value.
The trend hasn't been AGNC Investment Corp.'s ( AGNC ) friend, as shares have declined -51.33% since inception. AGNC went public during the financial crisis and became a dividend standout during the recovery. During 2010 and 2011, AGNC shares traded in the $28 - $31 range while throwing off a quarterly dividend of $1.40. Investors were getting around 4.8% returned through the dividend each quarter, as the annualized yield was roughly 19.3% at a share price of $29. Those days are certainly in the rearview mirror, as shares of AGNC have declined around -73.33% since reaching their all-time highs in 2012. On top of a drastic decline in share value, the dividend is a shell of itself after enduring several drastic reductions, which has reduced the annualized dividend to $1.44, which is -74.29% lower than the glory days when it was $5.60. I think there is an opportunity for shares of AGNC to appreciate after a downtrend that has existed for more than a decade while collecting a sizable dividend. I am getting bullish on AGNC going into a rate-cutting cycle....
AGNC Investment: 14.8% Yield Makes Waiting For A Lower Rate Environment Bearable