A month has gone by since the last earnings report for AGNC Investment (AGNC Quick QuoteAGNC - Free Report) . Shares have added about 1.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AGNC Investment due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

AGNC Investment Q4 Earnings Beat Estimates, BVPS Up

AGNC Investment reported fourth-quarter 2020 net spread and dollar-roll income (excluding estimated catch-up premium amortization costs) of 75 cents per share, beating the Zacks Consensus Estimate of 64 cents. However, the reported figure was lower than the prior-quarter figure of 81 cents.

For 2020, the company reported net spread and dollar-roll income (excluding estimated catch-up premium amortization costs) of $2.70 per share, beating the consensus mark of $2.60. The figure came in line with the prior year’s tally.

Adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $459 million, surpassing the Zacks Consensus Estimate of $384 million. The reported figure, however, declined from $494 million posted in the September-end quarter.

NII of $183 million declined from the prior quarter’s $302 million.

The company reported fourth-quarter comprehensive income per common share of $1.16 compared with the prior quarter’s $1.28.

Also, as of Dec 31, 2020, its tangible net book value per share (“BVPS”) was $16.71, up 5.2% from $15.88 as of Sep 30, 2020. However, it compared unfavorably with BVPS of $17.66 as of Dec 31, 2019.

The economic loss on tangible common equity for the company during the reported quarter was 7.5%. This included a dividend per share of 36 cents and an increase of 83 cents in BVPS.

Inside the Headlines

As of Dec 31, 2020, the company’s investment portfolio aggregated $97.9 billion. This included $65.1 billion of Agency MBS, $31.5 billion of to-be-announced (TBA) securities and $1.3 billion of credit risk transfer and non-Agency securities.

Inclusive of its net TBA position and net payable/ (receivable) for unsettled securities, AGNC Investment’s tangible net book value "at risk" leverage ratio was 8.5X as of Dec 31, 2020, compared with 8.8X in the prior quarter.

For the December-end quarter, the company's investment portfolio bore a weighted average actual CPR of 27.6%, up from 24.3% witnessed in third-quarter 2020.

Excluding net TBA position, AGNC Investment's average asset yield on its portfolio, was 1.64% in the fourth quarter, down from 2.28% recorded in the previous quarter.

For the December-end quarter, the combined average cost of funds, inclusive of interest rate swap costs, was 0.05%, down from 0.15% witnessed in the previous quarter.

Average net interest spread (excluding catch-up premium amortization) was 2.02%, down from 2.15% reported in the prior quarter.

Also, as of Dec 31, 2020, AGNC Investment’s cash and cash equivalents totaled $1.01 billion, up from $831 million as of Dec 31, 2019.

Dividend Update and Share Repurchase

During the fourth quarter, AGNC Investment announced a monthly dividend of 12 cents per share each for October, November and December. Notably, the company announced $10.4 billion in common stock dividends or $42.88 per common share since its initial public offering in May 2008 through fourth-quarter 2020.

During the fourth quarter, the company repurchased 6.6 million shares or $101 million of its common stock for an average price of $15.32 per share.

For 2020, repurchase transactions amounted to $402 million, net of repurchase costs.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 7.6% due to these changes.

VGM Scores

At this time, AGNC Investment has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AGNC Investment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.