AGNC Investment Just Notched Its 75th Straight Monthly Dividend and Currently Yields 13%+. Here's What Q2 Earnings Revealed.

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A beardown 4th contempt challenging marketplace conditions

AGNC Investment reported $0.52 per stock of broad nett income during the 2nd 4th and $0.40 per stock successful nett dispersed and dollar rotation income. Both metrics were supra the REIT's dividend payout this 4th ($0.36 per share, oregon $0.12 per month). Meanwhile, its publication worth accrued by $0.20 per share, oregon 2.4%, to $8.38 per share. When adding dividend income to the summation successful publication value, AGNC Investment generated an economical instrumentality of 6.7% during the period.

That's impressive, considering the marketplace environment. CEO Peter Federico highlighted successful the net property merchandise that "the concern situation successful the 2nd 4th continued to beryllium challenging, arsenic escalating rhetoric and hostilities betwixt the United States and Iran mostly dictated fiscal marketplace performance." Elevated vigor prices and proviso concatenation constraints "caused Treasury yields to increase, the output curve to flatten, and the market's monetary argumentation expectations to pivot from complaint cuts to complaint hikes."

While that drove up owe rates, reducing the projected Agency MBS proviso during the quarter, request for these low-risk owe investments remained strong. That created "a affirmative method backdrop that supported Agency MBS show and drove spreads to benchmark rates tighter."

The outlook for Agency MBS investments

While the 2nd 4th was a affirmative situation for Agency MBS investments, marketplace conditions tin alteration rapidly. Mortgage spreads person already declined from their caller peaks. However, they're inactive astatine historically elevated levels. As a result, Agency MBS connection compelling worth comparative to different fixed-income investments, particularly firm bonds. That drives Federico's presumption that "favorable dynamics should beryllium supportive of Agency MBS show implicit the adjacent to intermediate word and presumption AGNC to proceed to present beardown risk-adjusted returns for our stockholders."