Dynex Capital (DX) AI Stock Analysis

• Market Cap: $1.63B
• Dividend Yield: 14.68%
• Average Volume (3M): 3.88M
• Price to Earnings (P/E): 16.0
• Beta (1Y): 0.79
• Revenue Growth: 73.74%
• EPS Growth: -34.10%
• Country: US
• Employees: 22
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.22
• Shares Outstanding: 129,912,160
• 10 Day Avg. Volume: 3,989,912
• 30 Day Avg. Volume: 3,878,220
• PEG Ratio: -0.01
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 5.95
• P/FCF Ratio: 62.20
• Enterprise Value/Market Cap: 5.96
• Enterprise Value/Revenue: 59.63
• Enterprise Value/Gross Profit: 96.01
• Enterprise Value/Ebitda: 34.34
• 1Y Price Target: $13.70
• Price Target Upside: 9.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 60 Neutral
• Price Target: ―

Dynex Capital's overall score reflects a stable balance sheet and attractive valuation, but is tempered by challenges in operational efficiency and cash flow. Positive earnings call insights and a high dividend yield boost the score, though technical analysis reveals some cautionary signals.

Positive Factors

Dividends

Dividend increase to $0.17/share, resulting in a 14.7% yield, suggesting strong cash flow.

Earnings and Valuation

Raising price target to $16/share to reflect a bullish outlook for earnings and stock valuation.

Market Position

The stock's market cap now having crossed >$1 billion is seen as a positive, especially with potential inclusion into the S&P 600.

Negative Factors

Interest Rates

There is concern for structurally higher interest rates with budget deficits expected to top new highs and potential brinksmanship surrounding the upcoming debt ceiling.

Risk Management

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 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

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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 12.53
• 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 12.53 is below the 20-day moving average (MA) of 12.55, above the 50-day MA of 12.18, and above the 200-day MA of 11.88, indicating a neutral trend. The MACD of 0.09 indicates Positive momentum. The RSI at 53.43 is Neutral, neither overbought nor oversold. The STOCH value of 29.49 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 *	71 Outperform	¥221.23B	14.66	10.67%	3.77%	18.22%	20.90%
ARI	66 Neutral	$1.38B	―	-0.35%	10.06%	-14.98%	95.53%
EFC	65 Neutral	$1.22B	9.36	9.59%	12.28%	11.91%	52.26%
DX	60 Neutral	$1.63B	16.00	4.93%	14.68%	73.74%	-34.10%
PMT	56 Neutral	$1.05B	16.68	5.50%	13.25%	1.71%	-56.69%
TWO	53 Neutral	$1.04B	5.06	-14.78%	17.35%	-18.22%	-114.40%
ARR	48 Neutral	$1.54B	8.01	-2.04%	17.58%	142.18%	50.74%

Dynex Capital Corporate Events

Dynex Capital’s Co-CEO Posts Incorrect Metrics

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.