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AGNC Investment (AGNC)
NASDAQ:AGNC
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AGNC Investment
(NASDAQ:AGNC)
67Neutral
Positive Factors
Earnings
AGNC reported core EPS of $0.44, above the BofA/Consensus forecasts, largely due to lower economic interest expense.
Investment Outlook
The investment outlook is strong due to wider mortgage spreads, with ROE on new investments of 19-22% being above AGNC’s breakeven ROE, implying dividend stability.
Negative Factors
Interest Rate Volatility
Interest rate volatility is a concern, negatively impacting TBV/share.
Tariff-Driven Uncertainty
Tariff-driven uncertainty led to a pickup in financial volatility including widening agency MBS spreads, negatively affecting book value.
AGNC Investment (AGNC) vs. S&P 500 (SPY)
Market Cap
$9.37B
Dividend Yield15.69%
Average Volume (3M)35.49M
Price to Earnings (P/E)23.4
Beta (1Y)1.00
Revenue Growth-2.35%
EPS Growth-56.25%
CountryUS
Employees53
SectorReal Estate
Sector Strength68
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.44
Shares Outstanding1,020,375,400
10 Day Avg. Volume24,459,469
30 Day Avg. Volume35,490,384
Financial Highlights & Ratios
PEG Ratio-0.30
Price to Book (P/B)0.80
Price to Sales (P/S)0.00
P/FCF Ratio34.76
Enterprise Value/Market Cap9.68
Enterprise Value/Revenue8.77
Enterprise Value/Gross Profit87.48
Enterprise Value/Ebitda8.25
Forecast
1Y Price Target
$9.61Price Target Upside5.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
AGNC Investment Business Overview & Revenue Model
Company DescriptionAGNC Investment Corp. operates as a real estate investment trust (REIT) in the United States. The company invests in residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by the United States government-sponsored enterprise or by the United States government agency. It funds its investments primarily through collateralized borrowings structured as repurchase agreements. The company has elected to be taxed as a REIT under the Internal Revenue Code of 1986 and would not be subject to federal corporate income taxes, if it distributes at least 90% of its taxable income to its stockholders. The company was formerly known as American Capital Agency Corp. and changed its name to AGNC Investment Corp. in September 2016. AGNC Investment Corp. was incorporated in 2008 and is headquartered in Bethesda, Maryland.
How the Company Makes MoneyAGNC Investment Corp. makes money primarily through the interest income generated from its portfolio of agency mortgage-backed securities. The company borrows funds at relatively low short-term interest rates and then invests these funds in higher-yielding long-term mortgage-backed securities. The difference between the interest earned on the assets and the interest paid on the borrowed funds is known as the net interest margin, which forms the core of AGNC's earnings. Additionally, AGNC employs hedging strategies to manage interest rate risk, which can impact the value of its investments and the cost of its borrowings. The company also engages in portfolio management activities, such as buying and selling securities, to optimize its returns. Significant factors contributing to AGNC's earnings include interest rate conditions, the shape of the yield curve, and the effectiveness of its hedging strategies.
AGNC Investment Financial Statement Overview
Summary
AGNC Investment demonstrates strengths in cost management and operational efficiency, as seen in its strong gross profit and EBIT margins. However, the company faces challenges with high leverage and a low equity ratio, which could impact financial stability. While cash flows are improving, maintaining liquidity and managing debt will be crucial. Overall, AGNC must balance growth with financial prudence to enhance its financial health.Income Statement
AGNC's income statement shows a mixed performance. The gross profit margin is strong at 97.77% TTM, indicating efficient cost management. However, the net profit margin is relatively low at 4.36% TTM, reflecting significant expenses impacting the bottom line. Revenue growth has been volatile, with a notable drop in 2024 compared to 2023. EBIT and EBITDA margins are robust, with the EBIT margin at 241.78% TTM, showcasing operational efficiency despite revenue challenges.65
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 8.30 TTM, indicating significant leverage, which could pose a risk if not managed carefully. The equity ratio is relatively low at 10.47% TTM, suggesting limited equity financing. Return on equity is modest at 4.68% TTM, reflecting limited returns generated on shareholder equity. Overall, the balance sheet highlights the importance of managing leverage and improving equity positions.55
Neutral
Cash Flow
AGNC's cash flow statement displays a solid free cash flow growth rate, with a substantial increase to $258 million TTM from $86 million previously. The operating cash flow to net income ratio is 0.55 TTM, indicating a moderate conversion of income to cash. The free cash flow to net income ratio is also 0.55 TTM, suggesting a balanced cash management approach. The cash flow performance is strong, but continued focus on cash efficiency is necessary.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.08B | 3.90B | 251.00M | 2.55B | 837.00M | -173.00M | Gross Profit |
| 1.04B | 973.00M | 251.00M | 2.48B | 749.00M | -439.00M | EBIT |
| 2.61B | 863.00M | 100.00M | -565.00M | 749.00M | -266.00M | EBITDA |
| 2.60B | 3.92B | 2.59B | 2.40B | 749.00M | 0.00 | Net Income Common Stockholders |
| 470.00M | 863.00M | 155.00M | -1.19B | 749.00M | -266.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.72B | 505.00M | 518.00M | 1.02B | 998.00M | 1.02B | Total Assets |
| 95.89B | 88.02B | 71.60B | 51.75B | 68.15B | 81.82B | Total Debt |
| 83.38B | 64.00M | 80.00M | 95.00M | 126.00M | 177.00M | Net Debt |
| 81.66B | -441.00M | -438.00M | -923.00M | -872.00M | -840.00M | Total Liabilities |
| 85.85B | 78.25B | 63.34B | 43.88B | 57.86B | 70.74B | Stockholders Equity |
| 10.04B | 9.76B | 8.26B | 7.87B | 10.29B | 11.08B |
| Cash Flow | Free Cash Flow | ||||
| 258.00M | 86.00M | -118.00M | 1.01B | 1.54B | 1.75B | Operating Cash Flow |
| 258.00M | 86.00M | -118.00M | 1.01B | 1.54B | 1.75B | Investing Cash Flow |
| -17.48B | -11.17B | -14.67B | 11.19B | 3.84B | 36.52B | Financing Cash Flow |
| 17.07B | 11.08B | 14.23B | -11.39B | -6.17B | -37.23B |
AGNC Investment Technical Analysis
Positive
9.15
Price Trends
9.07
Positive
9.27
Negative
9.20
Negative
Market Momentum
0.06
Negative
58.16
Neutral
93.40
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGNC, the sentiment is Positive. The current price of 9.15 is above the 20-day moving average (MA) of 8.84, above the 50-day MA of 9.07, and below the 200-day MA of 9.20, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 58.16 is Neutral, neither overbought nor oversold. The STOCH value of 93.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGNC.
AGNC Investment Risk Analysis
AGNC Investment disclosed 44 risk factors in its most recent earnings report. AGNC Investment reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AGNC Investment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $6.88B | 21.31 | 4.90% | 9.47% | -15.62% | -31.74% | |
68 Neutral | $1.95B | 10.68 | 7.77% | 16.27% | -15.99% | -36.34% | |
68 Neutral | $6.19B | 9.74 | 9.36% | 8.57% | 26.78% | -19.34% | |
67 Neutral | $9.37B | 23.45 | 5.05% | 15.69% | -2.35% | -56.25% | |
63 Neutral | $3.34B | ― | -2.06% | 10.34% | -20.46% | -1436.71% | |
62 Neutral | $12.02B | 22.58 | 5.44% | 13.34% | 2.32% | ― | |
60 Neutral | $2.82B | 10.29 | 0.31% | 8508.26% | 5.91% | -17.42% |
* Real Estate Sector Average
Performance Comparison
AGNC
AGNC Investment
9.15
0.69
8.16%
NLY
Annaly Capital
19.77
2.20
12.52%
ABR
Arbor Realty
10.17
-2.07
-16.91%
BXMT
Blackstone Mortgage
19.49
3.35
20.76%
RITM
Rithm Capital
11.65
1.31
12.67%
STWD
Starwood Property
20.19
1.69
9.14%
AGNC Investment Earnings Call Summary
Earnings Call Date:Apr 21, 2025
(Q1-2025)
| % Change Since: 13.66%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Neutral
AGNC's first quarter earnings call highlighted a strong liquidity position and successful capital raising efforts. However, the company is navigating increased market volatility and a decline in net asset value due to wider mortgage spreads.Q1-2025 Updates
Positive Updates
Positive Stock Return
AGNC's total stock return with dividends reinvested for the quarter was a positive 7.8%.
Increased Net Spread and Dollar Roll Income
Net spread and dollar roll income increased by $0.07 to $0.44 per common share for the quarter, with a higher net interest rate spread rising by 21 basis points to 2.12%.
Strong Liquidity Position
AGNC ended the first quarter with a strong liquidity position consisting of $6 billion in cash and unencumbered Agency MBS, representing 63% of tangible equity.
Successful Capital Raising
During the quarter, AGNC raised $509 million of common equity through its at-the-market offering program at a material premium to tangible net book value.
Agency MBS Outperformance
Agency MBS was the best performing fixed income asset class in the first quarter with a total return of 3.1%.
Negative Updates
Book Value Decline
AGNC's tangible net book value per share declined by $0.16 due to modest spread widening during the quarter.
Increased Market Volatility
The period saw significant market volatility with interest rate fluctuations and broader macroeconomic uncertainty causing normal financial market correlations to break down.
Widening Mortgage Spreads
The current coupon spread to a blend of 5- and 10-year treasury rates widened to 160 basis points with the current coupon spread to a blend of swap rates reaching an intraday peak of 230 basis points.
Decrease in Net Asset Value
AGNC's net asset value was negatively impacted by mortgage spread widening.
Company Guidance
During the AGNC Investment Corp. first quarter 2025 earnings call, the company reported an economic return of 2.4% and a total stock return of 7.8% with dividends reinvested. The net asset value saw a decline of $0.16 per share, while leverage increased to 7.5 times tangible equity from 7.2 times at year-end. AGNC raised $509 million in common equity, enhancing liquidity, which stood at $6 billion, representing 63% of tangible equity. The net interest rate spread rose 21 basis points to 2.12%, with net spread and dollar roll income increasing to $0.44 per common share. The average portfolio CPR increased to 8.3%, indicating a slight rise in prepayment risk. Despite the volatility and widening spreads, AGNC remains optimistic about the returns on agency mortgage-backed securities, noting a favorable outlook even amidst macroeconomic uncertainties.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.