Dynex Capital (DX) AI Stock Analysis

• Market Cap: $2.81B
• Dividend Yield: 14.63%
• Average Volume (3M): 6.18M
• Price to Earnings (P/E): 5.7
• Beta (1Y): 0.39
• 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: 7,448,825
• 30 Day Avg. Volume: 6,181,122
• PEG Ratio: 0.08
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 4.14
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 5.35
• Enterprise Value/Revenue: 35.73
• Enterprise Value/Gross Profit: 40.42
• Enterprise Value/Ebitda: 47.16
• 1Y Price Target: $15.25
• Price Target Upside: 8.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.39
• Revenue Forecast (FY): $312.27M

• Rating: 64 Neutral
• Price Target: $15.50 ▲(10.01% Upside)

The score is primarily held back by very high leverage and weaker cash conversion despite a sharp TTM rebound in profitability. Technicals are supportive but appear overextended, while valuation is helped by a low P/E and very high dividend yield. Earnings-call commentary was constructive on returns, liquidity, and net interest income, with notable macro and prepayment risks.

Positive Factors

GSE‑Backed RMBS Portfolio

A portfolio concentrated in agency RMBS backed by GSEs/Ginnie Mae materially reduces borrower credit risk relative to non‑agency mortgages. This structural credit support improves long‑term capital preservation for an mREIT, leaving interest‑rate and funding dynamics as the primary risks.

Capital Raising & Liquidity

Substantial equity raises and a large liquidity buffer strengthen resilience to repo haircuts and funding stress, enabling opportunistic deployment of capital. This durable financing flexibility reduces forced asset sales and supports strategic growth and dividend funding over a multi‑month horizon.

Asset Base & Net Interest Income Expansion

Meaningful growth in interest‑earning assets combined with rising net interest income indicates scalable spread generation. If funding remains manageable and hedges perform, this structural expansion can sustain higher earnable income and improve long‑term return potential for shareholders.

Negative Factors

Very High Leverage

Extremely elevated debt relative to equity amplifies sensitivity to funding costs, repo haircuts, and market value declines. For an mREIT, high leverage is a persistent structural vulnerability that can necessitate dilutive equity raises or asset sales when markets tighten, pressuring long‑term value.

Weak Cash Conversion

Although free cash flow improved, a persistently weak conversion metric means reported earnings do not reliably translate into cash. For a financing‑dependent REIT, this undermines sustainable dividend coverage and increases reliance on external capital, a structural governance and financing concern.

Earnings Volatility & Prepayment Sensitivity

Profitability swings reflect sensitivity to interest‑rate moves, yield‑curve shape, and mortgage prepayment behavior. Such structural earnings volatility limits predictability of dividends and book value growth and requires continual active hedging and funding management to sustain long‑term returns.

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

Income statement strength (TTM revenue up ~92% and net margin ~58%) is offset by elevated balance-sheet risk (very high leverage, debt-to-equity ~6.0 and rising) and mixed cash quality (improved FCF, but weak cash conversion versus earnings).

Income Statement

TTM (Trailing-Twelve-Months) results show a sharp rebound, with revenue up ~92% and solid profitability (net margin ~58%). Profitability has been volatile across the cycle (loss in 2023 followed by strong profits in 2024–TTM), which reduces confidence in durability even though the current run-rate looks strong.

Balance Sheet

Leverage is very high, with debt-to-equity around ~6.0 in TTM (Trailing-Twelve-Months) and ~5.6 in 2024, which increases sensitivity to funding costs and asset value moves (typical risk area for mortgage REITs). Equity returns are positive (~12% ROE TTM), but the jump in absolute debt from 2024 to TTM and sustained high leverage keep the balance sheet risk elevated.

Cash Flow

TTM (Trailing-Twelve-Months) operating cash flow and free cash flow improved meaningfully (free cash flow growth ~138%), which is a positive near-term signal. However, cash generation relative to reported profits is weak based on the provided coverage metric (very low in both 2024 and TTM), suggesting earnings may not be translating cleanly into cash in the most recent periods.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	420.43M	150.40M	26.75M	177.00M	127.69M
Gross Profit	420.43M	150.40M	26.75M	177.00M	127.69M
EBITDA	738.23M	0.00	0.00	0.00	0.00
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	531.04M	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	0.00	14.39M	62.20M	126.35M	146.97M
Operating Cash Flow	0.00	14.39M	62.20M	126.35M	146.97M
Investing Cash Flow	0.00	-1.03B	-2.96B	-65.44M	-555.38M
Financing Cash Flow	0.00	1.40B	2.69B	-32.34M	519.98M

Dynex Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 14.09
• 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 14.09 is below the 20-day moving average (MA) of 14.19, above the 50-day MA of 13.79, and above the 200-day MA of 12.20, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 50.78 is Neutral, neither overbought nor oversold. The STOCH value of 23.66 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%
ARI	65 Neutral	$1.51B	12.27	7.26%	9.89%	0.29%	―
DX	64 Neutral	$2.81B	5.68	17.50%	14.63%	47.97%	17.22%
ARR	59 Neutral	$1.97B	374.51	3.75%	15.06%	-27.55%	-97.87%
PMT	55 Neutral	$1.08B	12.23	6.66%	12.69%	-15.48%	-36.45%
TWO	51 Neutral	$1.25B	-2.44	-23.24%	14.29%	22.48%	50.49%
CIM	50 Neutral	$1.04B	-30.61	2.10%	11.40%	9.46%	-111.44%

Dynex Capital Corporate Events

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.

Dynex Capital Updates SEC Registration Statement

On July 28, 2025, Dynex Capital, Inc. filed an automatic shelf registration statement with the SEC, updating its tax and legal matters information. The company has been advised by Morrison & Foerster LLP that it qualified as a REIT for the years 2022 through 2024, and is expected to continue qualifying through 2025, although this is contingent on meeting specific operational criteria.

The most recent analyst rating on (DX) stock is a Buy with a $16.00 price target. To see the full list of analyst forecasts on Dynex Capital stock, see the DX Stock Forecast page.