AGNC Investment (AGNC, Financial) is one of the market’s top real estate investment trusts (REITs) with a monthly dividend and steady forward dividend yield above 10%. The company announced its September monthly dividend on Sept. 11 and is paying 18 cents per share for common shareholders who own or buy the stock by Sept. 27 with an ex-dividend date of Sept. 28.
Trading at a price of $21.11 AGNC now has a forward dividend yield of 10.23%. The company has paid a steady distribution since its inception in 2008. It began paying distributions monthly in October 2014. Since then the dividend has decreased from 22 cents to the current dividend of 18 cents. The company is reporting a one-year dividend growth rate of -7.26% and a three-year dividend growth rate of -15.04%.
In 2017, the stock price has gained 16.44%. In September it announced a new fundraising, issuing 24.5 million shares and offering its underwriters an additional 3.675 million shares. The company’s CEO Gary Kain also spoke at the Barclays 2017 Global Financial Services Conference.
In its most recent earnings release, the company’s earnings per share (also known as net spread and dollar roll income) increased to 67 cents from 56 cents  in the comparable quarter and 64 cents in the previous quarter. It reported a $63.8 billion investment portfolio with the following breakdown in investments: $46.0 billion in agency mortgage-backed securities, $17.3 billion in a to be determined mortgage position, and $0.6 billion in credit risk transfer and non-agency securities.
For the year the company has earnings per share of $1.31. Analysts are predicting annual earnings per share of $2.47.
In comments at the Barclay’s 2017 Global Financial Services Conference, CEO Gary Kain discussed the REIT’s advantages noting that its allocation to agency mortgage debt is a factor that could contribute to future returns in the current market. He reports that the selling down of the Fed’s balance sheet has some positive implications for the portfolio.
Overall, the company has approximately 15 million shares outstanding with 31% of its shares owned by institutional investors. Its CEO Gary Kain owns 7.43% of the company’s shares and Vanguard Group is its top institutional shareholder. The iShares Mortgage Real Estate Capped fund is also a significant investor allocating 11.17% of its portfolio to AGNC.
The company will be reporting its third quarter earnings in October. Analysts are predicting revenue of $209 million, a decrease of -4.70% from the comparable quarter. The current estimate for third quarter earnings per share is 61.
Disclosure: I do not own any shares of AGNC.
