- AGNC Investment reported a net interest loss of $64 million for the third quarter, compared to a $3 million loss in the previous quarter.
- Interest income increased by 27% year-over-year to $756 million, surpassing the estimated $729.6 million.
- Interest expenses also rose by 27% year-over-year to $820 million, higher than the estimated $626.8 million.
- The company’s net spread and dollar roll income per share was 43 cents, below the expected 51 cents.
- Tangible book value per share was $8.82, up from $8.08 the previous year, and exceeded the estimated $8.73.
- The economic return on tangible common equity was a positive 9.3%, compared to a negative 10.1% last year, beating the estimate of 8.28%.
- The average asset yield, including TBA position, was 4.73%, up from 4.2% in the prior year.
- The average total cost of funds increased to 2.52% from 1.17% last year, slightly above the estimate of 2.44%.
- The annualized net interest spread, including TBA position and interest rate swaps, was 2.21%, down from the previous year’s 3.03%, but slightly above the estimate of 2.18%.
- Cash and cash equivalents decreased by 4.3% from the previous quarter to $507 million, below the estimate of $630.4 million.
- CEO Peter Federico highlighted a strong economic return of 9.3%, driven by book value growth and a stable monthly dividend of $0.12 per share for 55 months.
- The outlook for Agency MBS is better compared to 2022 and 2023, supported by a positive economic direction and favorable monetary policy.
- Analyst ratings include 9 buy recommendations, 6 hold recommendations, and no sells.
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American Capital Agency Corp on Smartkarma
Smartkarma, an independent investment research network, has recently featured coverage on American Capital Agency Corp by Value Investors Club. The report, titled “Agnc Investment Corp (AGNCP) – Thursday, Feb 15, 2024,” provides insights into a high-return opportunity in mortgage REIT preferreds, specifically focusing on AGNC Investment Corp’s Series F preferred shares. The author emphasizes systematic mispricing that allows for attractive 13-20% IRRs over 12-36 months, with a relatively safe investment profile. Stressing the safety and high yield of mREIT preferreds, the report highlights the potential for significant returns while minimizing borrower credit risk.
A look at American Capital Agency Corp Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 5 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
AGNC Investment Corp., a real estate investment trust focusing on residential mortgage-backed securities, has received positive Smart Scores across various factors. With a high Dividend score of 5, investors can expect steady income distributions. The Value score of 4 indicates that the company’s stock may be undervalued, potentially presenting a good buying opportunity. Momentum and Resilience scores of 4 and 2, respectively, suggest a solid performance trend and moderate ability to withstand adverse conditions. However, lower Growth score at 2 implies slower expansion prospects for the company in the long run.
Overall, American Capital Agency Corp‘s Smart Scores paint a picture of a company that offers strong dividend returns, value potential for investors, and a stable performance history. With a focus on government-backed securities and serving customers within the United States, AGNC Investment Corp. may appeal to income-focused investors looking for a reliable option in the real estate investment trust sector.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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