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Dynex Capital (DX)
NYSE:DX
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Dynex Capital
(NYSE:DX)
Rating:60Neutral
Price Target:―
Positive Factors
Dividend
Higher dividend helps reinforce a premium stock valuation, rewarding newer shareholders.
Earnings
Raising price target to $16/share to reflect a bullish outlook for earnings and stock valuation.
Negative Factors
Interest Rate Sensitivity
There is preparation for unavoidable sensitivity to all mortgage REITs and servicers in a shock scenario where spreads widen sharply, expecting more convexity risk could appear for Agency MBS.
Dynex Capital (DX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.63B
Dividend Yield15.05%
Average Volume (3M)3.98M
Price to Earnings (P/E)15.9
Beta (1Y)0.77
Revenue Growth35.01%
EPS Growth1115.85%
CountryUS
Employees22
SectorReal Estate
Sector Strength52
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.22
Shares Outstanding129,912,160
10 Day Avg. Volume3,999,754
30 Day Avg. Volume3,977,373
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)0.76
Price to Sales (P/S)5.95
P/FCF Ratio62.20
Enterprise Value/Market Cap5.96
Enterprise Value/Revenue59.63
Enterprise Value/Gross Profit96.01
Enterprise Value/Ebitda34.34
Forecast
1Y Price Target
$13.70Price Target Upside9.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Dynex Capital Business Overview & Revenue Model
Company DescriptionDynex 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 MoneyDynex 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 Earnings Call Summary
Earnings Call Date:Jul 21, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 27, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant growth in market capitalization and portfolio size, successful capital raising, and increased dividends, which are positive indicators. However, challenges such as market volatility and demand concerns in the mortgage markets create some uncertainty. Overall, the positive aspects notably outweigh the negative, suggesting a strong performance outlook.Q2-2025 Updates
Positive Updates
Significant Market Capitalization Growth
Dynex's market capitalization as of June 30 is over $1.5 billion, representing nearly 50% growth since June 2024.
Increased Portfolio Size and Liquidity
Dynex's portfolio is 25% larger since the end of the first quarter, standing at $14 billion compared to $11 billion, with liquidity at $891 million or 55% of total equity.
Successful Capital Raising
Raised $560 million of new capital, with stock performing well, allowing capital raising at a premium to book value.
Strong ROE on New Acquisitions
ROEs on newly acquired positions when fully hedged with interest rate swaps range from mid-teens to low 20%.
Increased Dividend
Dividends have been increased above pre-COVID levels, reflecting a focus on generating long-term returns for shareholders.
Negative Updates
Market Volatility
The second quarter began with unusual volatility in mortgages, treasuries, and the swap market, causing unpredictable price action and dislocation.
Demand Concerns in Mortgage Markets
Despite low net supply of agency RMBS, demand has yet to fully materialize, creating a medium-term headwind for spread tightening.
Potential Impact of Fed Rate Cuts
There is uncertainty about the number of rate cuts by the Fed, with potential impact on MBS spreads if fewer cuts occur than currently priced into the forward curve.
Company Guidance
In the recent Dynex Capital, Inc. Second Quarter Earnings Conference Call, held on July 21, 2025, several key metrics and strategic updates were discussed. The company's market capitalization exceeded $1.5 billion as of June 30, 2025, marking an almost 50% growth since June 2024. The investment portfolio expanded by over $3 billion this quarter, reaching $14 billion, a 25% increase from the previous quarter and over 50% year-over-year growth. Dynex raised $560 million in new capital this year, with a focus on deploying it into agency RMBS and CMBS markets. The portfolio's leverage was increased from 7.4 in the previous quarter to 8.3, while maintaining a liquidity of $891 million, or 55% of total equity. The company reported that its net interest income is on the rise, and the ROEs on newly acquired positions range from the mid-teens to low 20% range. The strategic focus remains on disciplined risk management, leveraging the stable mortgage repo market, and capitalizing on wide mortgage spreads to deliver strong risk-adjusted returns.Dynex Capital Financial Statement Overview
Summary
Dynex Capital's financial performance is mixed, with a stable balance sheet offset by challenges in income and cash flow. The income statement shows volatility and inefficiencies, while the balance sheet is strong with high equity and low debt. Cash flow sustainability is a risk due to declining operating cash flow.Income Statement
Dynex Capital's income statement reveals a volatile revenue trend with significant fluctuations. The company reported a negative gross profit in 2024, indicating cost inefficiencies. While the net income turned positive, it's largely due to non-operating factors rather than core business performance. The absence of revenue in 2024 suggests potential operational challenges or restructuring.35
Negative
Balance Sheet
The balance sheet displays a solid equity base with a high equity ratio, indicative of financial stability. The debt-to-equity ratio is favorable due to negligible debt, enhancing financial flexibility. However, a significant portion of assets is tied in cash, which might limit growth potential if not effectively utilized.60
Neutral
Cash Flow
Cash flow analysis shows a significant decrease in operating cash flow from 2023 to 2024, raising concerns about operational efficiency. While free cash flow is positive, it's driven by working capital changes rather than operational improvements. The sustainability of cash flows remains a key risk.45
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 162.73M | 150.40M | 26.75M | 177.00M | 127.69M | 199.67M |
| Gross Profit | 101.06M | 150.40M | 26.75M | 177.00M | 127.69M | 199.67M |
| EBITDA | 282.56M | 0.00 | 0.00 | 189.13M | 110.24M | 212.13M |
| Net Income | 65.40M | 113.90M | -6.13M | 143.16M | 102.26M | 177.53M |
Balance Sheet | ||||||
| Total Assets | 11.31B | 8.18B | 6.37B | 3.61B | 3.64B | 3.09B |
| Cash, Cash Equivalents and Short-Term Investments | 705.84M | 377.10M | 119.64M | 332.04M | 366.02M | 295.60M |
| Total Debt | 8.63B | 6.59B | 5.38B | 2.64B | 2.85B | 111.00K |
| Total Liabilities | 9.70B | 7.00B | 5.50B | 2.70B | 2.87B | 2.45B |
| Stockholders Equity | 1.61B | 1.18B | 870.74M | 901.33M | 771.28M | 633.45M |
Cash Flow | ||||||
| Free Cash Flow | 51.13M | 14.39M | 62.20M | 126.35M | 146.97M | 173.95M |
| Operating Cash Flow | 51.13M | 14.39M | 62.20M | 126.35M | 146.97M | 173.95M |
| Investing Cash Flow | -3.34B | -1.03B | -2.96B | -65.44M | -555.38M | 2.35B |
| Financing Cash Flow | 3.58B | 1.40B | 2.69B | -32.34M | 519.98M | -2.35B |
Dynex Capital Technical Analysis
Positive
12.49
Price Trends
12.24
Positive
11.85
Positive
11.83
Positive
Market Momentum
0.06
Negative
56.65
Neutral
59.65
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 12.49 is above the 20-day moving average (MA) of 12.34, above the 50-day MA of 12.24, and above the 200-day MA of 11.83, indicating a bullish trend. The MACD of 0.06 indicates Negative momentum. The RSI at 56.65 is Neutral, neither overbought nor oversold. The STOCH value of 59.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DX.
Dynex Capital Risk Analysis
Dynex Capital disclosed 37 risk factors in its most recent earnings report. Dynex Capital 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
Dynex Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.39B | 11.43 | 8.81% | 11.31% | 20.32% | 1.58% | |
63 Neutral | $7.00B | 13.45 | -0.52% | 6.98% | 3.61% | -22.78% | |
60 Neutral | $1.63B | 15.88 | 4.93% | 15.05% | 35.01% | 1115.85% | |
57 Neutral | $1.44B | ― | -0.35% | 9.65% | -26.29% | -342.06% | |
53 Neutral | $1.07B | 16.91 | 5.50% | 13.19% | 1.71% | -56.69% | |
48 Neutral | $1.70B | 8.01 | -2.04% | 19.10% | 157.34% | 91.67% | |
47 Neutral | $1.03B | 5.06 | -14.78% | 17.72% | -21.95% | -528.94% |
* Real Estate Sector Average
Performance Comparison
DX
Dynex Capital
12.49
1.65
15.22%
ARI
Apollo Real Estate
10.36
1.02
10.92%
ARR
ARMOUR Residential REIT
15.08
-2.17
-12.58%
EFC
Ellington Financial
13.79
2.10
17.96%
TWO
Two Harbors
9.82
-2.31
-19.04%
PMT
PennyMac Mortgage
12.13
-0.27
-2.18%
Dynex Capital Corporate Events
Financial Disclosures
Dynex Capital’s Co-CEO Posts Incorrect Metrics
Neutral
Jan 7, 2025
On January 6, 2025, Byron L. Boston, Co-CEO and Chairman of Dynex Capital, erroneously posted incorrect financial metrics on his LinkedIn account. The misstatement did not involve new information about the company’s fiscal year results, and the post was subsequently removed, clarifying that LinkedIn is not an official communication channel for the company.
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.