Dynex Capital (DX) AI Stock Analysis

• Market Cap: $2.78B
• Dividend Yield: 14.63%
• Average Volume (3M): 6.25M
• Price to Earnings (P/E): 5.6
• Beta (1Y): 0.40
• Revenue Growth: 47.97%
• EPS Growth: 17.22%
• Country: US
• Employees: 22
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.22
• Shares Outstanding: 199,585,510
• 10 Day Avg. Volume: 5,271,114
• 30 Day Avg. Volume: 6,251,177
• PEG Ratio: 0.08
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 4.14
• P/FCF Ratio: 14.39
• Enterprise Value/Market Cap: 5.40
• Enterprise Value/Revenue: 24.75
• Enterprise Value/Gross Profit: 24.75
• Enterprise Value/Ebitda: 20.36
• 1Y Price Target: $15.25
• Price Target Upside: 9.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.39
• Revenue Forecast (FY): $312.27M

• Rating: 63 Neutral
• Price Target: $15.00 ▲(7.45% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held back primarily by balance-sheet leverage and inconsistent cash generation despite a sharp earnings rebound. Support comes from attractive valuation (low P/E and high dividend yield) and a constructive earnings-call outlook with strong liquidity and disciplined growth, while technicals are mildly positive but not strongly momentum-driven.

Positive Factors

Strong portfolio returns and book value growth

Sustained double-digit total economic returns and sequential book-value gains demonstrate durable asset selection and effective hedging. For an mREIT, repeatable TER and BV accretion underpin dividend capacity and provide tangible capital growth that supports reinvestment and shareholder distributions over months.

Substantial liquidity and scalable portfolio growth

Large unencumbered liquidity and rapid expansion of TBA/MBS positions give Dynex flexibility to deploy capital opportunistically and manage repo funding. This funding cushion and scale support sustained portfolio growth and reduce short-term refinancing vulnerability across a 2–6 month horizon.

Upgraded executive team and organizational capability

Strengthened leadership, role separation, and senior hires improve risk controls, operational capacity and strategic execution. Building corporate development and expanded offices supports scalable origination and capital deployment, reducing execution risk as the platform grows over the medium term.

Negative Factors

High leverage and large debt stock

Very elevated leverage magnifies sensitivity to spread compression, funding shocks and mark-to-market volatility. Large repo and secured borrowings increase refinancing and haircut risk, limiting financial flexibility and amplifying downside in adverse rate or liquidity conditions over several months.

Inconsistent cash generation and conversion

Volatile operating cash flows and weak free-cash conversion relative to net income indicate earnings are not reliably translating to cash. This undermines sustainable dividend coverage and limits buffer for unexpected funding costs, creating recurring liquidity management challenges over the medium term.

Policy dependence and spread sensitivity

Returns and hedging outcomes depend materially on GSE behavior and policy shifts; retained-portfolio moves and regulation can alter prepayment and spread regimes. This structural policy exposure raises uncertainty in reinvestment economics and risk models over an extended horizon.

Dynex Capital Business Overview & Revenue Model

Company Description

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 1987 and is headquartered in Glen Allen, Virginia.

How the Company Makes Money

Dynex Capital generates revenue primarily through interest income from its investments in mortgage-backed securities. The company borrows money at short-term interest rates and invests in longer-term securities, earning a spread between the interest income received from these securities and the interest expenses paid on the borrowed funds. This spread is a key component of the company's earnings. Dynex Capital's revenue model is sensitive to changes in interest rates, prepayment rates, and the overall economic environment, as these factors can influence the value and performance of its investment portfolio. The company may also use hedging strategies to manage interest rate risk and enhance its financial performance.

Dynex Capital Financial Statement Overview

Summary

Profitability rebounded strongly in 2024–2025 (net income up to $319.1M in 2025), but the profile is constrained by very high leverage (debt-to-equity ~5.6x; total debt $13.9B) and uneven cash conversion (2025 operating cash flow $120.8M vs. $319.1M net income). Revenue volatility and a 2025 revenue decline also reduce confidence in durability.

Income Statement

Profitability improved sharply after a loss in 2023, with net income rising to $113.9M in 2024 and $319.1M in 2025, and profit margins rebounding to strong levels. However, revenue has been volatile (including a negative revenue year in 2022) and turned down in 2025 (-5.5% growth), which reduces confidence in the durability of the earnings run-rate.

Balance Sheet

The balance sheet is meaningfully more leveraged in the last two years, with debt-to-equity around ~5.6x in 2024–2025 and total debt increasing to $13.9B in 2025, which raises refinancing and market-spread risk for a mortgage REIT. Offsetting this, equity expanded to $2.46B and return on equity improved to ~13% in 2025, but the leverage profile remains the key constraint.

Cash Flow

Cash generation is inconsistent: operating cash flow fell from $126.4M (2022) to $62.2M (2023) to $14.4M (2024), then recovered to $120.8M (2025). Free cash flow also shows negative growth in recent years, and 2025 cash flow is still well below net income ($120.8M vs. $319.1M), indicating earnings are not translating into cash as strongly as desired.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	420.43M	318.03M	132.60M	-2.37M	66.76M
Gross Profit	420.43M	318.03M	132.60M	-2.37M	66.76M
EBITDA	738.23M	427.56M	209.32M	186.77M	107.93M
Net Income	319.07M	113.90M	-6.13M	143.16M	102.26M
Balance Sheet
Total Assets	17.34B	8.18B	6.37B	3.61B	3.64B
Cash, Cash Equivalents and Short-Term Investments	930.39M	377.23M	119.64M	332.04M	366.02M
Total Debt	13.91B	6.59B	0.00	0.00	0.00
Total Liabilities	14.88B	7.00B	5.50B	2.70B	2.87B
Stockholders Equity	2.46B	1.18B	870.74M	901.33M	771.28M
Cash Flow
Free Cash Flow	120.82M	14.39M	62.20M	126.35M	146.97M
Operating Cash Flow	120.82M	14.39M	62.20M	126.35M	146.97M
Investing Cash Flow	-8.07B	-1.03B	-2.96B	-65.44M	-555.38M
Financing Cash Flow	8.26B	1.40B	2.69B	-32.34M	519.98M

Dynex Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13.96
• 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 DX, the sentiment is Positive. The current price of 13.96 is above the 20-day moving average (MA) of 13.90, above the 50-day MA of 13.77, and above the 200-day MA of 12.28, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 53.51 is Neutral, neither overbought nor oversold. The STOCH value of 41.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DX.

Dynex Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
DX	63 Neutral	$2.78B	5.65	17.50%	14.63%	47.97%	17.22%
ARI	60 Neutral	$1.49B	13.20	6.66%	9.89%	0.29%	―
ARR	57 Neutral	$2.17B	5.52	17.82%	15.06%	-27.55%	-97.87%
PMT	55 Neutral	$1.06B	12.28	6.67%	12.69%	-15.48%	-36.45%
CIM	53 Neutral	$1.11B	7.72	9.04%	11.40%	9.46%	-111.44%
TWO	45 Neutral	$1.12B	-1.98	-23.25%	14.29%	22.48%	50.49%

Dynex Capital Corporate Events

Dynex Capital Expands At-The-Market Equity Offering Capacity

On January 27, 2026, Dynex Capital, Inc. amended its existing at-the-market equity distribution agreement with a syndicate of sales agents, increasing the total number of authorized common shares for potential sale by 60,000,000 to 221,292,973, of which 67,354,187 shares remain available for issuance under its current shelf registration. The additional capacity under the program, supported by a newly filed prospectus supplement and legal and tax opinions from counsel, enhances Dynex Capital’s flexibility to raise equity capital over time, with customary fees and commissions payable to the participating sales agents, and may have implications for the company’s capital structure and existing shareholders as shares are sold into the market.

The most recent analyst rating on (DX) stock is a Hold with a $15.50 price target. To see the full list of analyst forecasts on Dynex Capital stock, see the DX Stock Forecast page.

Dynex Capital reports strong 2025 results, enhances leadership

On January 26, 2026, Dynex Capital reported strong fourth-quarter and full-year 2025 results, highlighted by total economic return of $1.29 per common share, or 10.2% of beginning book value, for the quarter and $2.75, or 21.6%, for the year, alongside growth in book value per common share to $13.45 at year-end 2025 from $12.70 a year earlier. The company posted comprehensive income of $1.22 per share and net income of $1.17 per share for the fourth quarter, with full-year comprehensive income of $2.85 and net income of $2.49 per share, declared $2.00 per share in dividends for 2025, raised $1.2 billion in equity capital over the year, and expanded its Agency RMBS and CMBS holdings to drive a 58% increase in average interest-earning assets, all while maintaining $1.4 billion in liquidity and leverage of 7.3 times shareholders’ equity. Reflecting this growth and a focus on organizational resilience, Dynex also moved to separate its finance and operations leadership roles by appointing Meakin Bennett as Chief Operating Officer effective January 26, 2026, while retaining Robert S. Colligan as Chief Financial Officer with expanded responsibilities and reaffirming Co-CEO and President Smriti L. Popenoe as the principal operating officer, signaling a more robust executive structure to support the enlarged platform and shareholder-focused strategy.

The most recent analyst rating on (DX) stock is a Buy with a $16.50 price target. To see the full list of analyst forecasts on Dynex Capital stock, see the DX Stock Forecast page.

Dynex Capital announces director Joy Palmer’s planned departure

On January 13, 2026, Dynex Capital, Inc. announced that director Joy Palmer has informed the company she will not stand for re-election to the Board of Directors at the 2026 Annual Meeting of Shareholders, although she will continue to serve on the Board until that meeting. The company stated that Palmer’s decision was not related to any dispute over its operations, policies, or practices, signaling an orderly governance transition without apparent underlying conflict for investors or other stakeholders.

The most recent analyst rating on (DX) stock is a Buy with a $16.50 price target. To see the full list of analyst forecasts on Dynex Capital stock, see the DX Stock Forecast page.