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Invesco Mortgage Capital Inc (IVR)
NYSE:IVR
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Invesco Mortgage
(NYSE:IVR)
51Neutral
Invesco Mortgage (IVR) vs. S&P 500 (SPY)
Market Cap
$428.19M
Dividend Yield24.39%
Average Volume (3M)2.45M
Price to Earnings (P/E)10.1
Beta (1Y)1.40
Revenue Growth137.36%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength68
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.65
Shares Outstanding65,273,160
10 Day Avg. Volume4,040,899
30 Day Avg. Volume2,447,228
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.75
Price to Cash Flow (P/CF)2.20
P/FCF Ratio2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.00Price Target Upside23.08% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering3
Invesco Mortgage Business Overview & Revenue Model
Company DescriptionInvesco Mortgage Capital Inc. (IVR) is a real estate investment trust (REIT) that primarily focuses on investing in, financing, and managing residential and commercial mortgage-backed securities and mortgage loans. The company's portfolio is largely comprised of Agency RMBS, which are residential mortgage-backed securities guaranteed by U.S. government agencies, along with non-Agency RMBS and commercial mortgage-backed securities (CMBS). Invesco Mortgage Capital aims to generate income through its investments in these mortgage-related assets by leveraging its expertise in the mortgage finance sector.
How the Company Makes MoneyInvesco Mortgage Capital makes money primarily through the interest income generated from its portfolio of mortgage-backed securities and mortgage loans. The company's revenue model involves acquiring high-quality mortgage-backed securities, both residential and commercial, and earning the spread between the interest income on these securities and the cost of borrowing to finance them. By utilizing leverage, Invesco Mortgage Capital seeks to enhance its returns on equity. The company also engages in active portfolio management to optimize its asset mix and manage interest rate risks. In addition to interest income, the company may realize gains or losses from the sale of securities within its portfolio. Key factors contributing to its earnings include the performance of the housing and commercial real estate markets, interest rate trends, and government policies affecting mortgage financing.
Invesco Mortgage Financial Statement Overview
Summary
Invesco Mortgage shows moderate financial health with strong cash flow management and a manageable balance sheet. However, the income statement reflects substantial revenue and profit volatility, posing ongoing risks despite potential recovery signs.Income Statement
The income statement shows significant fluctuations in total revenue and profitability over recent years. Notably, revenue recovered in 2024 compared to previous years, but the company still reported a net income of zero, indicating challenges in achieving profitability. The gross profit margin is 100% in 2024, which is unusual and suggests potential accounting adjustments or unique revenue recognition practices. The overall lack of consistent profitability and revenue volatility poses a risk to financial stability.25
Negative
Balance Sheet
Invesco Mortgage's balance sheet shows a relatively low debt-to-equity ratio in 2024 due to zero reported total debt, which is a positive indicator. However, the equity ratio is 12.85%, pointing to modest equity backing for the assets. The company's financial health has improved from earlier years, but the overall balance sheet strength is moderate, given the historical volatility in liabilities and equity.55
Neutral
Cash Flow
The cash flow analysis reveals a stable operating cash flow, which is a positive sign of operational efficiency. Free cash flow has shown a decline in 2024 compared to 2023, but still remains positive, indicating some level of financial resilience. The company's ability to generate operating cash flow despite net income challenges suggests effective cash management, although growth in free cash flow remains a concern.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 286.55M | 4.19M | 194.51M | -63.41M | -1.65B | Gross Profit |
| 286.55M | 4.19M | 177.61M | -126.81M | -3.30B | EBIT |
| 0.00 | 0.00 | -351.36M | -90.00M | -1.67B | EBITDA |
| 0.00 | 0.00 | 0.00 | -101.54M | -1.48B | Net Income Common Stockholders |
| 59.88M | -15.86M | -454.48M | -90.00M | -1.67B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 73.40M | 76.97M | 175.53M | 357.13M | 148.01M | Total Assets |
| 5.69B | 5.28B | 5.10B | 8.44B | 8.63B | Total Debt |
| 0.00 | 4.46B | 4.23B | 6.99B | 7.23B | Net Debt |
| -73.40M | 4.26B | 4.06B | 6.63B | 7.08B | Total Liabilities |
| 4.96B | 4.50B | 4.29B | 3.06M | 2.27M | Stockholders Equity |
| 730.73M | 782.66M | 804.08M | 1.40B | 1.37B |
| Cash Flow | Free Cash Flow | |||
| 183.16M | 237.79M | 196.08M | 152.29M | 170.46M | Operating Cash Flow |
| 183.16M | 237.79M | 196.08M | 152.29M | 170.46M | Investing Cash Flow |
| -497.43M | -536.80M | 2.42B | 120.75M | 11.55B | Financing Cash Flow |
| 326.51M | 218.87M | -2.92B | -88.57M | -11.62B |
Invesco Mortgage Technical Analysis
Negative
6.50
Price Trends
8.05
Negative
7.82
Negative
7.77
Negative
Market Momentum
-0.14
Positive
36.14
Neutral
14.26
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IVR, the sentiment is Negative. The current price of 6.5 is below the 20-day moving average (MA) of 7.79, below the 50-day MA of 8.05, and below the 200-day MA of 7.77, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 36.14 is Neutral, neither overbought nor oversold. The STOCH value of 14.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IVR.
Invesco Mortgage Risk Analysis
Invesco Mortgage disclosed 86 risk factors in its most recent earnings report. Invesco Mortgage 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
Invesco Mortgage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $8.22B | 9.66 | 9.58% | 16.63% | 384.69% | 963700.00% | |
68 Neutral | $11.25B | 11.62 | 8.40% | 14.62% | 13.33% | ― | |
62 Neutral | $1.20B | 4.87 | 13.74% | 16.32% | 28.33% | ― | |
61 Neutral | $4.26B | 15.61 | -3.60% | 11.29% | 6.17% | -21.11% | |
60 Neutral | $982.18M | 11.72 | 6.35% | 15.79% | 26.34% | 79.07% | |
51 Neutral | $428.19M | 10.15 | 7.97% | 24.39% | 137.36% | ― | |
45 Neutral | $1.21B | 8.01 | -1.09% | 19.70% | -46.65% | 76.86% |
* Real Estate Sector Average
Performance Comparison
IVR
Invesco Mortgage
6.50
-0.98
-13.10%
AGNC
AGNC Investment
8.54
0.10
1.18%
NLY
Annaly Capital
17.85
0.87
5.12%
ARR
ARMOUR Residential REIT
14.36
-2.68
-15.73%
MFA
MFA Financial
8.56
-1.31
-13.27%
TWO
Two Harbors
10.88
-0.14
-1.27%
Invesco Mortgage Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -23.89% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Invesco Mortgage Capital Inc. While there were improvements in the capital structure and a positive start to 2025, the company faced challenges with a negative economic return and a decline in earnings. The underperformance of agency RMBS also contributed to the cautious sentiment around future performance.Highlights
Improvement in Capital Structure
Invesco Mortgage Capital notably improved its capital structure and reduced its cost of capital by funding the redemption of Series E preferred stock in December with lower-cost repurchase agreements. This resulted in an increase in the debt-to-equity ratio to 6.7 times at the end of the fourth quarter, up from 6.1 times at the end of the third quarter.
Positive Start to 2025
The company reported a modestly positive start to 2025 with interest rate volatility stabilizing and the market's outlook for future monetary policy coalescing around one or two additional cuts in the FOMC this year. Book value per common share increased approximately 2% excluding the dividend approval.
Selective Capitalization on Agency RMBS
Invesco Mortgage Capital continues to capitalize on historically attractive agency RMBS spreads, which are poised to perform well as interest rate volatility continues to moderate.
Lowlights
Negative Economic Return
The company reported a negative economic return of 0.5% for the fourth quarter, with a decrease in book value per common share by 4.8% to $8.92 per share.
Earnings Decline
Earnings available for distribution declined from $0.68 in the third quarter to $0.53 in the fourth quarter due to a one-time charge associated with the redemption of Series B preferred stock.
Underperformance of Agency RMBS
Agency RMBS underperformed treasury during the fourth quarter, primarily in lower coupons as a sharp move higher in interest rates limited demand for discount securities.
Company Guidance
During the Invesco Mortgage Capital Inc. Fourth Quarter 2024 Earnings Call, the company presented several key metrics and guidance. The book value per common share decreased by 4.8% to $8.92, contributing to a negative economic return of 0.5% for the quarter, despite a $0.40 per share dividend. As of February 14, 2025, the estimated book value per share was between $8.90 and $9.26. The debt-to-equity ratio rose to 6.7 times due to the redemption of Series E preferred stock and increased repurchase agreements, while 85% of the $5.4 billion investment portfolio was in agency mortgages. Earnings available for distribution fell from $0.68 to $0.53, affected by a one-time charge from redeeming Series B preferred stock. The company also increased its hedge ratio from 83% to 95% and maintained a robust liquidity position with $389 million in unrestricted cash and unencumbered investments. Looking forward, Invesco Mortgage Capital Inc. remains cautiously optimistic about agency RMBS given current valuations and anticipated demand improvements, while also expecting a gradual increase in agency CMBS issuance met with strong investor demand.Invesco Mortgage Corporate Events
Delistings and Listing ChangesBusiness Operations and Strategy
Invesco Mortgage: Termination and Stock Reclassification Events
Neutral
Dec 27, 2024
Invesco Mortgage Capital Inc. announced the termination of its Equity Distribution Agreement, which allowed the company to offer and sell preferred stocks through an agent. The company did not sell any shares under this agreement and faces no penalties for the termination. Additionally, the company redeemed all outstanding shares of its Series B Preferred Stock, reclassifying the authorized but unissued shares to Preferred Stock without designation and completing the redemption on December 27, 2024.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.