AGNC - Why AGNC's 15% Yield Might Be Unsustainable But Still Worth Considering
2024-06-06 13:44:23 ET
Summary
- AGNC Investment Corp. has a 15% forward yield, but it may not be sustainable due to negative net interest income.
- The company relies on derivatives to mitigate the risks of borrowing short and lending long, but this reduces profitability.
- The current environment of high short-term rates and lower long-term rates may normalize, potentially benefiting AGNC's business model.
AGNC Investment Corp. (AGNC) is a mortgage REIT, and it is currently sporting a 15% forward yield. It buys Agency MBS assets with short-term leverage through RePo agreements....
Why AGNC's 15% Yield Might Be Unsustainable But Still Worth Considering