Is AGNC Investment Stock a Millionaire Maker?

AGNC Investment (NASDAQ: AGNC) has a immense 12.5% dividend output close now. For comparison, the S&P 500 (SNPINDEX: ^GSPC) has a tiny 1.1% yield, and the mean existent property concern spot (REIT) has a output of 3.8%. But don't unreserved to bargain shares reasoning that you've recovered a no-brainer income opportunity. There's a batch much to recognize here.

A accepted REIT generates income by leasing retired carnal properties. That's a beauteous elemental concern exemplary to understand, and it mostly provides reliable currency flows to enactment yields good supra marketplace rates. AGNC Investment doesn't bash this. It buys and sells bond-like securities created by pooling mortgages together. That's precise different, with AGNC operating much similar a enslaved communal money than a accepted REIT.

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This changes the equation successful an important way. While dividends are an important instrumentality for AGNC Investment to instrumentality worth to shareholders, absorption focuses connected full instrumentality erstwhile evaluating the company's humanities performance. Total instrumentality assumes that dividends are reinvested.

If you're a dividend capitalist trying to unrecorded disconnected the income your portfolio generates, you volition apt beryllium disappointed by AGNC Investment. The dividend this REIT pays has been highly volatile implicit clip and, successful fact, has been trending little for much than a decade. The banal terms has followed the dividend down. That would person near investors with little income and little capital, which is astir apt not an perfect result for astir dividend investors.

However, if you reinvested the dividends AGNC Investment has paid since its archetypal nationalist offering (IPO), the communicative is wholly different. As the illustration supra shows, connected a full instrumentality basis, AGNC Investment has beaten the S&P 500 scale since its IPO. The returns don't enactment up with those of the S&P 500, suggesting that adding AGNC Investment to your portfolio could adhd a invaluable diversification benefit, arsenic well.

You person to support your eyes focused intelligibly connected your concern people erstwhile making fiscal decisions. If you are a dividend investor, AGNC Investment astir apt isn't a bully fit. If you are focused connected full return, however, this owe REIT could beryllium conscionable what you request to assistance you get to the millionaire plateau.