News about AGNC

AGNC Investment Corp. reported a comprehensive loss of $1.28 per common share in the third quarter, as tangible net book value per share fell $1.45 to $7.13, a 16.9% decrease from $8.58 as of June 30. Net spread and dollar roll income was $0.37 per share, excluding a $0.05 catch-up premium amortization benefit; the average asset yield rose to 4.92% while the weighted average cost of funds rose to 3.09%, narrowing the net interest spread to 1.86% from 2.00%. The company raised $992 million in net proceeds by issuing 97.6 million shares at a significant premium to tangible net book value after joining the S&P MidCap 400 Index, and its leverage rose to 7.9x. The portfolio totaled $94.4 billion at fair value, economic return was negative 12.7% for the quarter, and tangible net book value had recovered 3% as of October 16.

AGNC Investment posted a -12.7% economic return in Q3 as Agency MBS, its sole investment focus, was the worst-performing sector in the Bloomberg U.S. Aggregate Bond Index. Net spread and dollar roll income fell for a third straight quarter to $0.37 per share, just above the $0.36 dividend, and tangible net book value per share dropped 16.9% to $7.13. Leverage rose to 7.9x, above its 7.0x to 7.5x target range. On the positive side, the REIT issued $992 million of equity at a significant premium to tangible book value, and CEO Peter Federico says Agency MBS valuations are more attractive now. The article concludes that AGNC is a high-risk, high-yielding leveraged bet and not the best choice for risk-averse investors seeking steady passive income.

AGNC Investment (AGNC) closed at $8.61 on October 13 and has fallen roughly 19% over six months. The company buys government-backed mortgage bonds, borrows against them, and keeps the spread, a model the article describes as uncomplicated. Its price-to-book of 1.11 is the highest among the mortgage trusts billionaires own, which trade between 0.76 and 1.05, and it is paired with a 19.80% return on equity, the highest in the group. The article argues this premium rests on expectations of future results and could fade if results move back toward the group's level. On earnings the stock looks ordinary, at 4.93 times the past year and 6.61 times expected next-year earnings.