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AGNC Investment (AGNC) Down 11.5% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for AGNC Investment (AGNC - Free Report) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AGNC Investment due for a breakout? 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 drivers.
AGNC Investment Beats on Q4 Net Spread and Dollar Roll
AGNC Investment reported fourth-quarter 2021 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 75 cents per share, beating the Zacks Consensus Estimate of 66 cents. The reported figure remained flat with the fourth-quarter 2020 figure.
Adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $440 million, surpassing the Zacks Consensus Estimate of $418 million. The reported figure, however, declined from the quarter-ago number of $443 million.
The company reported a fourth-quarter comprehensive loss per common share of 31 cents against the prior-year quarter’s income of $1.16.
For 2021, net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of $3.02 per share surpassed the Zacks Consensus Estimate of $2.92. Also, adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $1.79 billion, outpacing the Zacks Consensus Estimate of $1.76 billion.
Inside the Headlines
NII of $247 million declined 11.5% sequentially.
AGNC Investment's average asset yield on its portfolio, excluding the net to-be-announced (TBA) position, was 2.30% in the fourth quarter, up from 2.28% recorded in the prior-year quarter.
For the December-end quarter, the combined weighted average cost of funds, inclusive of interest rate swap, was a net benefit of 0.02%, compared with a net benefit of 0.03% witnessed in the previous quarter.
The average net interest spread (excluding catch-up premium amortization) was 2.15%, down from 2.19% reported in the prior-quarter.
AGNC Investment’s tangible net book value "at risk" leverage ratio was 7.6X as of Dec 31, 2021, compared with 8.5X in the prior-year quarter.
For the December-end quarter, the company's investment portfolio bore a weighted average actual CPR of 18.6%, down from 27.6% witnessed in fourth-quarter 2020.
As of Dec 31, 2021, its tangible net book value per share (“BVPS”) was $15.75, down 4% from $16.41 as of Sep 30, 2021. Also, it compares unfavorably with BVPS of $16.71 as of Dec 31, 2020.
The economic loss on tangible common equity for the company in the reported quarter was 1.8%. This included a dividend per share of 36 cents and a decrease of 66 cents in tangible net BVPS.
As of Dec 31, 2021, the company’s investment portfolio aggregated $82 billion. This included $79.7 billion of Agency mortgage-backed securities and TBA securities, and $2.3 billion of credit risk transfer and non-Agency securities.
As of Dec 31, 2021, AGNC Investment’s cash and cash equivalents totaled $998 million, down from $1.01 billion as of Dec 31, 2020.
Capital Deployment Activities
In the fourth quarter, AGNC Investment announced a dividend of 12 cents per share each for October, November and December. Notably, the company declared $11.2 billion in common stock dividends or $44.32 per common share since its initial public offering in May 2008 through fourth-quarter 2021.
The company repurchased 2.7 million shares for $42 million under its $1-billion buyback plan expiring on Dec 31, 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.53% due to these changes.
VGM Scores
Currently, AGNC Investment has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, 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 C. 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 this revision 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.
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AGNC Investment (AGNC) Down 11.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for AGNC Investment (AGNC - Free Report) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AGNC Investment due for a breakout? 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 drivers.
AGNC Investment Beats on Q4 Net Spread and Dollar Roll
AGNC Investment reported fourth-quarter 2021 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 75 cents per share, beating the Zacks Consensus Estimate of 66 cents. The reported figure remained flat with the fourth-quarter 2020 figure.
Adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $440 million, surpassing the Zacks Consensus Estimate of $418 million. The reported figure, however, declined from the quarter-ago number of $443 million.
The company reported a fourth-quarter comprehensive loss per common share of 31 cents against the prior-year quarter’s income of $1.16.
For 2021, net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of $3.02 per share surpassed the Zacks Consensus Estimate of $2.92. Also, adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $1.79 billion, outpacing the Zacks Consensus Estimate of $1.76 billion.
Inside the Headlines
NII of $247 million declined 11.5% sequentially.
AGNC Investment's average asset yield on its portfolio, excluding the net to-be-announced (TBA) position, was 2.30% in the fourth quarter, up from 2.28% recorded in the prior-year quarter.
For the December-end quarter, the combined weighted average cost of funds, inclusive of interest rate swap, was a net benefit of 0.02%, compared with a net benefit of 0.03% witnessed in the previous quarter.
The average net interest spread (excluding catch-up premium amortization) was 2.15%, down from 2.19% reported in the prior-quarter.
AGNC Investment’s tangible net book value "at risk" leverage ratio was 7.6X as of Dec 31, 2021, compared with 8.5X in the prior-year quarter.
For the December-end quarter, the company's investment portfolio bore a weighted average actual CPR of 18.6%, down from 27.6% witnessed in fourth-quarter 2020.
As of Dec 31, 2021, its tangible net book value per share (“BVPS”) was $15.75, down 4% from $16.41 as of Sep 30, 2021. Also, it compares unfavorably with BVPS of $16.71 as of Dec 31, 2020.
The economic loss on tangible common equity for the company in the reported quarter was 1.8%. This included a dividend per share of 36 cents and a decrease of 66 cents in tangible net BVPS.
As of Dec 31, 2021, the company’s investment portfolio aggregated $82 billion. This included $79.7 billion of Agency mortgage-backed securities and TBA securities, and $2.3 billion of credit risk transfer and non-Agency securities.
As of Dec 31, 2021, AGNC Investment’s cash and cash equivalents totaled $998 million, down from $1.01 billion as of Dec 31, 2020.
Capital Deployment Activities
In the fourth quarter, AGNC Investment announced a dividend of 12 cents per share each for October, November and December. Notably, the company declared $11.2 billion in common stock dividends or $44.32 per common share since its initial public offering in May 2008 through fourth-quarter 2021.
The company repurchased 2.7 million shares for $42 million under its $1-billion buyback plan expiring on Dec 31, 2022.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 10.53% due to these changes.
VGM Scores
Currently, AGNC Investment has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, 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 C. 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 this revision 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.