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AGNC Investment (AGNC)
NASDAQ:AGNC
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AGNC Investment
(NASDAQ:AGNC)
Rating:67Neutral
Price Target:
$10.50
▲(9.03%Upside)
Positive Factors
Dividend Yield
AGNC's dividend yield is an attractive 17.0% at the current stock price, providing an appealing return to investors.
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
Financial Performance
AGNC reported Q2'25 core EPS of $0.38, which was lower than the consensus estimate of $0.41.
Interest Rate Volatility
Interest rate volatility is a concern, negatively impacting TBV/share.
AGNC Investment (AGNC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.67B
Dividend Yield15.19%
Average Volume (3M)21.55M
Price to Earnings (P/E)29.2
Beta (1Y)0.96
Revenue Growth-18.28%
EPS Growth-10.62%
CountryUS
Employees53
SectorReal Estate
Sector Strength60
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.38
Shares Outstanding1,020,375,400
10 Day Avg. Volume24,192,194
30 Day Avg. Volume21,547,778
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap10.30
Enterprise Value/Revenue63.26
Enterprise Value/Gross Profit170.60
Enterprise Value/Ebitda28.73
Forecast
1Y Price Target
$9.73Price Target Upside1.04% 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 net interest income generated from its investments in agency mortgage-backed securities (MBS). The company borrows funds at lower short-term interest rates and invests these funds in higher-yielding long-term agency MBS, thus earning a spread between the interest income on its assets and the interest expense on its liabilities. This spread is the primary driver of AGNC's profitability. AGNC also actively manages its portfolio to hedge against interest rate and prepayment risks through the use of derivatives and other risk management tools. Additionally, the company's earnings can be influenced by changes in interest rates, the shape of the yield curve, and the prepayment rates of the mortgages underlying its securities. AGNC does not engage in significant partnerships but relies on its expertise in managing the MBS portfolio to maximize returns.
AGNC Investment Earnings Call Summary
Earnings Call Date:Jul 21, 2025
(Q2-2025)
| % Change Since: 5.71%|
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. AGNC demonstrated strong liquidity and took advantage of market conditions to raise accretive capital, while policymakers' commitments to GSE reform are favorable for future stability. However, the quarter was marked by a negative economic return and comprehensive loss, with widening MBS spreads impacting performance. Despite these challenges, AGNC's strategic positioning and improved book value since the quarter-end suggest potential for recovery.Q2-2025 Updates
Positive Updates
Strong Liquidity Position
AGNC started the second quarter with a strong liquidity position, ending with $6.4 billion in cash and unencumbered Agency MBS, representing 65% of tangible equity, up from 63% in the previous quarter.
Accretive Capital Raising
AGNC raised nearly $800 million of common equity through its at-the-market offering program at a significant premium to tangible net book value.
Positive Statements on GSE Reform
Key policymakers, including President Trump and Treasury Secretary Bessent, affirmed their commitment to the implicit guarantee for Agency MBS, which is expected to support tighter mortgage spreads over time.
Portfolio Growth
AGNC's asset portfolio grew by $3.5 billion to a total of $82 billion, with a focus on higher coupon specified pools with favorable prepayment characteristics.
Improved Book Value Since Quarter End
As of late July, AGNC reported a 1% increase in tangible net book value per common share after accounting for the monthly dividend accrual.
Negative Updates
Negative Economic Return
AGNC reported a negative economic return of 1% for the second quarter, driven by a $0.44 decline in tangible net book value per share.
Comprehensive Loss
AGNC reported a comprehensive loss of $0.13 per common share for the second quarter.
Decline in Net Spread and Dollar Roll Income
Net spread and dollar roll income decreased by $0.06 to $0.38 per common share, primarily due to the timing of capital deployment and higher swap costs.
Widening of MBS Spreads
Agency mortgage-backed securities underperformed, with current coupon spreads to a blend of treasury and swap benchmarks ending the quarter 7 and 14 basis points wider, respectively.
Company Guidance
During AGNC Investment Corp.'s second quarter 2025 earnings call, the company reported a comprehensive loss of $0.13 per common share, with an economic return on tangible common equity at negative 1%, which included $0.36 in dividends per share and a reduction in tangible net book value by $0.44 per share due to wider mortgage spreads. AGNC's leverage at quarter-end was 7.6x, slightly up from 7.5x in Q1, with an average quarterly leverage of 7.5x. The company maintained a strong liquidity position with $6.4 billion in cash and unencumbered Agency MBS, representing 65% of tangible equity, and raised nearly $800 million in common equity through its at-the-market offering program. The average projected life CPR of AGNC's portfolio decreased to 7.8% from 8.3%, while actual CPRs averaged 8.7% for the quarter. AGNC's net interest rate spread declined by 11 basis points to 201 basis points, primarily due to higher swap costs, and net spread and dollar roll income decreased by $0.06 to $0.38 per share.AGNC Investment Financial Statement Overview
Summary
AGNC's financial performance shows mixed results. Strong gross profit and EBIT margins indicate efficient cost management, but high leverage and low equity ratio pose financial stability risks. Cash flow is improving, but maintaining liquidity and managing debt are critical.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 | 1.57B | 973.00M | 251.00M | -1.12B | 837.00M | -173.00M |
| Gross Profit | 584.00M | 973.00M | 251.00M | 2.48B | 749.00M | -439.00M |
| EBITDA | 3.47B | 3.92B | 2.59B | 2.40B | 749.00M | 0.00 |
| Net Income | 470.00M | 863.00M | 155.00M | -1.19B | 749.00M | -266.00M |
Balance Sheet | ||||||
| Total Assets | 95.89B | 88.02B | 71.60B | 51.75B | 68.15B | 81.82B |
| Cash, Cash Equivalents and Short-Term Investments | 1.36B | 505.00M | 518.00M | 1.02B | 998.00M | 1.02B |
| Total Debt | 83.38B | 64.00M | 80.00M | 95.00M | 126.00M | 177.00M |
| 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
9.63
Price Trends
9.11
Positive
8.90
Positive
8.90
Positive
Market Momentum
0.13
Negative
65.31
Neutral
56.27
Neutral
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 9.63 is above the 20-day moving average (MA) of 9.36, above the 50-day MA of 9.11, and above the 200-day MA of 8.90, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 65.31 is Neutral, neither overbought nor oversold. The STOCH value of 56.27 is Neutral, 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 (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.15B | 12.68 | 7.09% | 14.20% | -17.43% | -37.71% | |
68 Neutral | $6.39B | 9.32 | 10.13% | 8.30% | 26.78% | -19.34% | |
67 Neutral | $7.19B | 20.37 | 4.90% | 9.91% | -15.62% | -31.74% | |
67 Neutral | $9.67B | 29.20 | 3.98% | 15.19% | -18.28% | -10.62% | |
65 Neutral | C$1.94B | 2.41 | -2.44% | 5.15% | 3.48% | -42.24% | |
63 Neutral | $3.20B | ― | -0.33% | 10.09% | -20.46% | -1436.71% | |
62 Neutral | $13.17B | 20.41 | 5.94% | 13.16% | 2.32% | ― |
* Real Estate Sector Average
Performance Comparison
AGNC
AGNC Investment
9.63
1.03
11.98%
NLY
Annaly Capital
20.91
3.71
21.57%
ABR
Arbor Realty
11.39
-0.60
-5.00%
BXMT
Blackstone Mortgage
18.90
3.34
21.47%
RITM
Rithm Capital
12.21
2.20
21.98%
STWD
Starwood Property
19.51
1.95
11.10%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.