AGNC Investment (AGNC) AI Stock Analysis

• Market Cap: $9.59B
• Dividend Yield: 15.32%
• Average Volume (3M): 21.18M
• Price to Earnings (P/E): 24.0
• Beta (1Y): 0.96
• Revenue Growth: -2.35%
• EPS Growth: -56.25%
• Country: US
• Employees: 53
• Sector: Real Estate
• Sector Strength: 56
• Industry: REIT - Mortgage
• EPS (TTM): 0.44
• Shares Outstanding: 1,020,375,400
• 10 Day Avg. Volume: 18,027,233
• 30 Day Avg. Volume: 21,181,212
• PEG Ratio: -0.31
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 36.82
• Enterprise Value/Market Cap: 9.50
• Enterprise Value/Revenue: 8.42
• Enterprise Value/Gross Profit: 156.10
• Enterprise Value/Ebitda: 8.30
• 1Y Price Target: $9.55
• Price Target Upside: 2.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 66 Neutral
• Price Target: $9.50 ▲(2.04%Upside)

AGNC's overall stock score reflects a mix of strengths and challenges. The company's strong liquidity and operational efficiency are significant positives, but high leverage and market volatility present risks. The high dividend yield offers an attractive income stream, partially offsetting valuation concerns.

Positive Factors

Dividend Yield

AGNC's dividend yield is an attractive 17.0% at the current stock price.

Financial Performance

AGNC reported core earnings per share that exceeded the forecasts, indicating strong financial performance.

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.

Stock Price Valuation

The current stock price equates to 1.11x TBV, whereas the benchmark for mortgage REITs is regarded to be 1.0x TBV.

Tariff and Financial Volatility

Tariff-driven uncertainty led to a pickup in financial volatility including widening agency MBS spreads, negatively affecting book value.

AGNC Investment Business Overview & Revenue Model

Company Description

AGNC Investment Corp., headquartered in Bethesda, Maryland, is a real estate investment trust (REIT) that specializes in investing in agency mortgage-backed securities (MBS) on a leveraged basis. The company primarily focuses on securities for which the principal and interest payments are guaranteed by a U.S. Government-sponsored enterprise, such as Fannie Mae or Freddie Mac, or by a U.S. Government agency, such as Ginnie Mae. AGNC is committed to generating attractive risk-adjusted returns for its shareholders by investing in a diversified portfolio of agency MBS and utilizing a disciplined risk management approach.

How the Company Makes Money

AGNC 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 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.

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.

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.

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.

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	2.60B	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	1.72B	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

• Technical Analysis Sentiment: Positive
• Last Price: 9.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 9.31 is above the 20-day moving average (MA) of 9.26, above the 50-day MA of 8.99, and above the 200-day MA of 8.99, indicating a bullish trend. The MACD of 0.12 indicates Positive momentum. The RSI at 55.36 is Neutral, neither overbought nor oversold. The STOCH value of 63.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGNC.

AGNC Investment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABR	71 Outperform	$2.16B	11.37	7.77%	10.67%	-15.99%	-36.34%
STWD	69 Neutral	$7.09B	21.97	4.90%	9.19%	-15.62%	-31.74%
RITM	68 Neutral	$6.19B	9.75	9.36%	8.56%	26.78%	-19.34%
AGNC	66 Neutral	$9.59B	24.01	5.05%	15.32%	-2.35%	-56.25%
Sector *	66 Neutral	£947.02M	13.94	2.04%	5.24%	11.04%	38.13%
BXMT	63 Neutral	$3.42B	―	-2.06%	9.44%	-20.46%	-1436.71%
NLY	62 Neutral	$11.93B	22.41	5.44%	14.20%	2.32%	―