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Invesco Mortgage Capital Inc (IVR)
NYSE:IVR
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Invesco Mortgage
(NYSE:IVR)
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Rating:59Neutral
Price Target:
$9.50
▲(6.86% Upside)
The score is held back primarily by weak financial performance driven by high leverage and thin profitability, despite improving cash flow trends. Offsetting this, technicals are constructive with the stock trading above major moving averages and positive MACD, and the latest earnings call was broadly positive (book value/economic return improvement and a higher dividend), while valuation is supported by a very high yield with a moderate P/E.
Positive Factors
Scale & Agency RMBS focus
A sizable, agency‑heavy portfolio provides durable income generation and sourcing advantages. Scale in Agency RMBS supports consistent interest income, allows efficient hedging and funding execution, and CMBS exposure adds diversification that can stabilize long-term cash flows.
Strong funding & hedging position
High hedge coverage and large repo capacity materially reduce interest rate and duration exposure, enabling the firm to sustain levered returns while managing downside. Durable hedging and diversified funding sources improve resilience through policy shifts and market stress.
Sector tailwinds & GSE support
Ongoing Fed easing and a large GSE purchase program structurally bolster demand for Agency MBS, lowering spread volatility and supporting reinvestment options. This macro backdrop enhances expected returns and reduces downside over a multi‑month horizon for agency‑focused REITs.
Negative Factors
Very high leverage
Extremely high leverage amplifies sensitivity to spread widening or funding stress, constraining flexibility. With thin equity, adverse rate moves or repo dislocations could rapidly erode book value and strain liquidity, making capital stability a persistent risk over months.
Thin profitability & low ROE
Very low margins and ROE indicate limited ability to convert revenue into sustainable profits. The business requires leverage and favorable spreads to produce returns; absent persistent spread tightening or continued tailwinds, profitability and distributable earnings remain fragile.
Prepayment and demand risks
Accelerating prepayments on premium coupons reduce expected cashflows and reinvestment yields, degrading long‑term returns on affected securities. Coupled with limited bank/overseas demand, this narrows the buyer base and increases execution risk if GSE support moderates.
Invesco Mortgage (IVR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$609.42M
Dividend Yield16.08%
Average Volume (3M)2.43M
Price to Earnings (P/E)6.5
Beta (1Y)0.57
Revenue Growth-53.20%
EPS Growth97.96%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.56
Shares Outstanding70,945,570
10 Day Avg. Volume2,859,073
30 Day Avg. Volume2,425,874
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)0.59
Price to Sales (P/S)5.41
P/FCF Ratio2.35
Enterprise Value/Market Cap10.16
Enterprise Value/Revenue44.12
Enterprise Value/Gross Profit94.14
Enterprise Value/Ebitda22.18
Forecast
1Y Price Target
$8.63Price Target Upside-2.92% Downside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)2.2
Revenue Forecast (FY)$148.50M
Invesco Mortgage Business Overview & Revenue Model
Company DescriptionInvesco Mortgage Capital Inc. operates as a real estate investment trust (REIT) that primarily focuses on investing in, financing, and managing mortgage-backed securities and other mortgage-related assets. It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by a U.S. government agency or federally chartered corporation; credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises; residential and commercial mortgage loans; and other real estate-related financing arrangements. Invesco Mortgage Capital Inc. has elected to be taxed as a REIT and would be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. The company was incorporated in 2008 and is headquartered in Atlanta, Georgia.
How the Company Makes MoneyInvesco Mortgage generates revenue primarily through interest income from its investments in mortgage-backed securities and other mortgage-related assets. The company earns income by holding these securities, which typically provide regular interest payments. Additionally, IVR may also benefit from capital gains when it sells securities at a profit. The company's revenue model is influenced by the interest rate environment, as changes in rates can affect the value of its holdings and the yield on new investments. Furthermore, IVR may engage in hedging strategies to manage interest rate risk, which can also impact its financial performance. The company may have partnerships with financial institutions and investment firms that facilitate its investment strategies and capital management.
Invesco Mortgage Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive tone driven by strong quarter results (book value growth, an 8% economic return, portfolio growth, attractive levered returns on Agency RMBS/CMBS, robust liquidity, and supportive macro tailwinds such as Fed easing and GSE purchases). Management flagged several measured concerns — limited incremental spread tightening going forward, increased prepayment speeds in higher coupons, earlier short-term funding pressure, subdued bank/overseas demand, and a modest rise in leverage — but these were presented as manageable and largely balanced by the firm’s liquidity, hedging, and disciplined positioning. Overall, highlights materially outweighed the lowlights.Q4-2025 Updates
Positive Updates
Book Value and Economic Return Improvement
Book value per common share increased 3.7% to $8.72 during the quarter and IVR delivered an 8% economic return for the quarter. Book value was also up approximately 4.5% since year-end (through the referenced Wednesday).
Dividend Increase
Quarterly dividend was increased to $0.36, contributing to an 8% economic return when combined with book value appreciation.
Portfolio Scale and Composition
Total portfolio of $6.3 billion at year-end, including $5.4 billion in Agency RMBS and $900 million in Agency CMBS, with $453 million in unrestricted cash and unencumbered assets supporting liquidity.
Agency RMBS Performance and Positioning
Agency RMBS portfolio increased 11% quarter-over-quarter; nominal spreads tightened ~15 basis points in Q4 and ~10 basis points year-to-date. Current coupon spreads to a 5- and 10-year SOFR blend ended near 140 basis points, implying levered gross returns in the mid- to upper-teens.
Agency CMBS Returns and Diversification Benefit
Agency CMBS provided attractive risk-adjusted yields and diversification, with levered gross ROEs in the low double digits and reduced sensitivity to interest rate volatility due to prepayment protection and fixed maturities.
Improved Funding and Hedging Metrics
Repurchase agreements collateral increased from $5.2 billion to $5.6 billion and hedge notional increased from $4.4 billion to $4.9 billion. Hedge ratio rose slightly from 85% to 87%, with 78% of hedges in interest rate swaps (57% on a dollar duration basis).
Macro and Market Tailwinds
Financial conditions improved after 3 Fed cuts of 25 basis points each in 2025, end of quantitative tightening, and reduced interest rate volatility. GSE announcements (notably an initial $200 billion purchase program and $24 billion of combined purchases in December) supplied incremental demand and stabilized the sector.
Liquidity and Capital Actions
Management maintained a robust liquidity cushion ($453 million) and selectively accessed ATM issuance; modest common issuance and small preferred buyback were executed to improve capital structure and shareholder liquidity.
Negative Updates
Limited Further Spread Tightening / Reduced Upside
Management expects the bulk of spread tightening from 2025 is largely priced in and indicated that further spread tightening is unlikely absent additional government action (e.g., increased GSE caps). They noted available ROEs have tightened ~10 basis points since year-end, reducing potential upside.
Increased Prepayment Risk in Higher Coupons
Prepayment speeds rose in higher coupon specified pools (notably 6% and 6.5% coupons) during the second half of the year; mortgage rates ending near ~6.25% and higher-coupon dynamics weigh on premium securities despite owning prepayment protection.
Funding Pressures Earlier in Quarter
1-month repo spreads widened approximately 5 basis points beginning in late September and into October, reflecting funding pressure that only improved after the Fed ended QT and initiated shorter-term treasury purchases.
Macro / Economic Weakness
U.S. labor market showed weakness with a loss of 67,000 jobs during the quarter and inflation remained above target (headline CPI 2.7%, core CPI 2.6%), factors cited by the Fed in managing policy and signaling continued uncertainty.
Subdued Bank and Overseas Demand
Despite strong GSE buying, bank and overseas purchases of agency mortgages remained subdued, which could limit the breadth of demand if GSE support moderates.
Modest Increase in Leverage
Leverage was modestly increased to 7x during the quarter; while management views this as consistent with the investment environment, higher leverage raises sensitivity to adverse market moves if volatility or spreads widen.
Company Guidance
The guidance emphasized a constructive but balanced outlook for agency mortgages, noting monetary easing and technicals that support the sector (Fed cut the funds rate by 25 bps at each of its last three 2025 meetings, markets pricing in ~50 bps more cuts through 2026; headline CPI 2.7% / core CPI 2.6%; economy lost 67,000 jobs in the quarter), while calling out specific portfolio and capital metrics: book value per common share $8.72 (up 3.7% Q/Q), quarterly economic return 8%, dividend raised to $0.36, modestly increased leverage to ~7x, $6.3 billion portfolio ( ~$5.4B Agency RMBS, ~$900M Agency CMBS) and $453M unrestricted cash/unencumbered assets; market/return inputs included 10‑yr Treasury ~4.17%, 2–30 curve 137 bps (83 bps steeper YoY), 30‑yr mortgage rate ~6.25%, nominal spreads tightened ~15 bps in Q4 (+10 bps YTD), current coupon spread to a 5–10y SOFR blend near 140 bps (equating to levered gross returns in the mid‑ to upper‑teens) and Agency CMBS levered ROEs in the low double digits; funding and hedge metrics at year‑end were repo financing $5.6B (from $5.2B), hedge notional $4.9B (from $4.4B) with a hedge ratio ~87% (up from 85%), swaps comprising ~78% of hedges by notional and ~57% by dollar duration, and management flagged the GSEs’ $200B purchase program (with ~$24B of GSE net purchases in December) as an important support factor.Invesco Mortgage Financial Statement Overview
Summary
Financial statement scores are weak-to-mixed (Income 45, Balance Sheet 40, Cash Flow 55). Strong TTM revenue growth is offset by very low profitability (TTM net margin 1.71%) and high leverage (debt-to-equity 6.69), while cash flow shows some improvement but limited operating cash conversion (OCF to net income 0.03).Income Statement
Invesco Mortgage's income statement shows significant volatility. The TTM revenue growth rate is strong at 58.59%, indicating a recovery from previous periods. However, the net profit margin is low at 1.71% for TTM, reflecting challenges in converting revenue to profit. Historical EBIT and EBITDA margins have been inconsistent, with recent negative EBITDA. The company needs to stabilize its profitability metrics to improve its financial health.45
Neutral
Balance Sheet
The balance sheet reveals high leverage with a debt-to-equity ratio of 6.69 in the TTM, which poses a risk in a rising interest rate environment. The return on equity is low at 0.48% for TTM, indicating inefficient use of equity capital. The equity ratio is not provided, but the high debt levels suggest limited equity buffer. Improving equity and reducing debt would enhance financial stability.40
Negative
Cash Flow
Cash flow analysis shows a positive trend with a 4.24% growth in free cash flow in the TTM. The operating cash flow to net income ratio is low at 0.03, indicating potential issues in cash generation relative to accounting profits. However, the free cash flow to net income ratio is strong at 1.0, suggesting good cash conversion. Continued focus on cash flow generation is crucial for financial resilience.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 140.38M | 79.55M | 4.19M | -377.60M | 50.33M | -1.65B |
| Gross Profit | 65.79M | 79.55M | 4.19M | -377.60M | -62.53M | -1.65B |
| EBITDA | 279.29M | 310.38M | 222.84M | -331.44M | -80.16M | 0.00 |
| Net Income | 53.35M | 59.88M | -15.86M | -402.92M | -90.00M | -1.67B |
Balance Sheet | ||||||
| Total Assets | 5.96B | 5.69B | 5.28B | 5.10B | 8.44B | 8.63B |
| Cash, Cash Equivalents and Short-Term Investments | 180.72M | 73.40M | 76.97M | 176.20M | 357.40M | 392.58M |
| Total Debt | 5.15B | 4.89B | 4.46B | 4.24B | 7.00B | 7.23B |
| Total Liabilities | 5.19B | 4.96B | 4.50B | 4.29B | 7.04B | 7.27B |
| Stockholders Equity | 769.58M | 730.73M | 782.66M | 804.08M | 1.40B | 1.37B |
Cash Flow | ||||||
| Free Cash Flow | 159.13M | 183.16M | 237.79M | 196.08M | 152.29M | 170.46M |
| Operating Cash Flow | 159.13M | 183.16M | 237.79M | 196.08M | 152.29M | 170.46M |
| Investing Cash Flow | 28.86M | -497.43M | -536.80M | 2.42B | 120.75M | 11.55B |
| Financing Cash Flow | -175.73M | 326.51M | 218.87M | -2.92B | -88.57M | -11.62B |
Invesco Mortgage Technical Analysis
Positive
8.89
Price Trends
8.22
Positive
7.60
Positive
7.14
Positive
Market Momentum
0.19
Positive
57.89
Neutral
24.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IVR, the sentiment is Positive. The current price of 8.89 is above the 20-day moving average (MA) of 8.79, above the 50-day MA of 8.22, and above the 200-day MA of 7.14, indicating a bullish trend. The MACD of 0.19 indicates Positive momentum. The RSI at 57.89 is Neutral, neither overbought nor oversold. The STOCH value of 24.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $261.75M | 5.17 | 27.37% | 14.36% | 15.51% | 210.91% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $706.70M | 13.86 | 5.87% | 10.48% | -10.86% | -5.90% | |
59 Neutral | $609.42M | 6.51 | 13.26% | 16.08% | -53.20% | 97.96% | |
53 Neutral | $286.69M | -35.85 | -1.42% | 13.75% | -30.60% | 87.95% | |
52 Neutral | $544.23M | -23.89 | -0.16% | 11.33% | -24.37% | -19.19% | |
44 Neutral | $384.20M | -1.07 | -19.24% | ― | -65.32% | -325.73% |
* Real Estate Sector Average
IVR
Invesco Mortgage
8.89
1.86
26.40%
ACRE
Ares Commercial
5.22
-0.10
-1.82%
KREF
Kkr Real Estate Finance
8.31
-1.87
-18.37%
TRTX
Tpg Re Finance
9.14
1.51
19.79%
NREF
NexPoint Real Estate ate Finance
14.90
1.34
9.88%
CMTG
Claros Mortgage Trust
2.84
-0.70
-19.77%
Invesco Mortgage Corporate Events
Business Operations and StrategyDividends
Invesco Mortgage Capital Raises Dividend and Shifts to Monthly
Positive
Dec 18, 2025
On December 18, 2025, Invesco Mortgage Capital Inc. announced that its board declared a cash dividend of $0.36 per share of common stock for the fourth quarter of 2025, payable on January 23, 2026, to shareholders of record as of December 29, 2025, marking an increase that management said reflects the strength of the firm’s investment portfolio, liquidity and capital structure amid a more favorable backdrop for Agency MBS. The company also unveiled a shift in its dividend policy from quarterly to monthly distributions beginning in the first quarter of 2026, with the first monthly dividend declaration expected on January 15, 2026, a move aimed at providing more timely and consistent income to common shareholders and potentially enhancing its appeal to income-focused investors.
The most recent analyst rating on (IVR) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Invesco Mortgage stock, see the IVR Stock Forecast page.
Financial Disclosures
Invesco Mortgage Reports Strong Q3 2025 Turnaround
Positive
Oct 30, 2025
Invesco Mortgage Capital Inc. reported its third quarter 2025 financial results, highlighting a significant turnaround with a net income per common share of $0.74, compared to a net loss of $0.40 in the previous quarter. The company achieved a 4.5% increase in book value per common share to $8.41, driven by strong performance in Agency RMBS due to declining interest rate volatility and robust investor demand, resulting in a positive economic return of 8.7% for the quarter.
The most recent analyst rating on (IVR) stock is a Hold with a $7.50 price target. To see the full list of analyst forecasts on Invesco Mortgage stock, see the IVR Stock Forecast page.
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.