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AGNC Investment's 15.93% Dividend Yield: A Powerful Income Play?
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Key Takeaways
AGNC offers a 15.93% dividend yield with monthly payouts and a payout ratio of 81%.
The company authorized a $1B buyback plan through 2026, aiming to reduce volatility and boost value.
AGNC holds $6B in liquidity, supporting the sustainability of its capital distribution strategy.
One of the most closely watched aspects of AGNC Investment Corp.’s (AGNC - Free Report) financial profile is its dividend policy. This publicly traded mortgage real estate investment trust (mREIT) offers favorable long-term stockholder returns and a gigantic dividend yield that appeals to income-focused investors.
Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income as dividends. AGNC has a record of paying monthly dividends, currently yielding a staggering 15.93%. This is impressive compared with the industry’s average of 12.92% and attracts investors as it represents a steady income stream. It currently sits at a payout ratio of 81%.
Dividend Yield
Image Source: Zacks Investment Research
Dividends aside, AGNC has a share repurchase plan in place. In October 2024, the company’s board of directors terminated the existing stock repurchase plan and replaced it with a new plan authorizing it to repurchase up to $1 billion of common stock through Dec. 31, 2026. As of March 31, 2025, the full authorization was available for repurchase.
The company enjoys a decent financial position. As of March 31, 2025, AGNC Investment’s liquidity, including unencumbered cash and Agency MBS, was $6 billion. Given this, AGNC’s capital distribution seems sustainable.
How AGNC Competes With NLY & ABR in Terms of Dividends
Annaly Capital Management, Inc. (NLY - Free Report) also has a record of paying monthly dividends, currently yielding a staggering 14.3%. It presently sits at a payout ratio of 101%. In March 2025, Annaly announced a cash dividend of 70 cents per share for the first quarter of 2025, marking a 7.7% hike from the prior payout. Till the end of the first quarter of 2025, the company had $7.5 billion of total assets available for financing, including cash and unencumbered Agency MBS of $4.7 billion, which can readily provide liquidity in times of adverse market conditions. This will support its capital distribution in the future.
Arbor Realty Trust (ABR - Free Report) has a record of paying out quarterly dividends. Its current dividend yield is 12.66%, with a payout ratio of 115%. However, earlier this month, the company reduced its dividend 30.3% to 30 cents per share. Arbor Realty’s weak liquidity position is concerning. As of March 31, 2025, ABR had cash and cash equivalents of $508 million, while it had a long-term debt of $4.8 billion. Hence, given a weak liquidity profile, Arbor Realty’s capital distribution seems unsustainable.
AGNC shares have gained 4.5% year to date compared with the industry’s growth of 1.2%.
Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, AGNC Investment trades at a forward price-to-tangible book (P/TB) ratio of 1.06X, above the industry’s average of 0.95X.
Price-to-Tangible Book TTM
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AGNC’s 2025 and 2026 earnings implies year-over-year declines of 11.2% and 3.9%, respectively. The estimates for 2025 and 2026 have been unchanged over the past 30 days.
Image: Bigstock
AGNC Investment's 15.93% Dividend Yield: A Powerful Income Play?
Key Takeaways
One of the most closely watched aspects of AGNC Investment Corp.’s (AGNC - Free Report) financial profile is its dividend policy. This publicly traded mortgage real estate investment trust (mREIT) offers favorable long-term stockholder returns and a gigantic dividend yield that appeals to income-focused investors.
Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income as dividends. AGNC has a record of paying monthly dividends, currently yielding a staggering 15.93%. This is impressive compared with the industry’s average of 12.92% and attracts investors as it represents a steady income stream. It currently sits at a payout ratio of 81%.
Dividend Yield
Dividends aside, AGNC has a share repurchase plan in place. In October 2024, the company’s board of directors terminated the existing stock repurchase plan and replaced it with a new plan authorizing it to repurchase up to $1 billion of common stock through Dec. 31, 2026. As of March 31, 2025, the full authorization was available for repurchase.
The company enjoys a decent financial position. As of March 31, 2025, AGNC Investment’s liquidity, including unencumbered cash and Agency MBS, was $6 billion. Given this, AGNC’s capital distribution seems sustainable.
How AGNC Competes With NLY & ABR in Terms of Dividends
Annaly Capital Management, Inc. (NLY - Free Report) also has a record of paying monthly dividends, currently yielding a staggering 14.3%. It presently sits at a payout ratio of 101%. In March 2025, Annaly announced a cash dividend of 70 cents per share for the first quarter of 2025, marking a 7.7% hike from the prior payout. Till the end of the first quarter of 2025, the company had $7.5 billion of total assets available for financing, including cash and unencumbered Agency MBS of $4.7 billion, which can readily provide liquidity in times of adverse market conditions. This will support its capital distribution in the future.
Arbor Realty Trust (ABR - Free Report) has a record of paying out quarterly dividends. Its current dividend yield is 12.66%, with a payout ratio of 115%. However, earlier this month, the company reduced its dividend 30.3% to 30 cents per share.
Arbor Realty’s weak liquidity position is concerning. As of March 31, 2025, ABR had cash and cash equivalents of $508 million, while it had a long-term debt of $4.8 billion. Hence, given a weak liquidity profile, Arbor Realty’s capital distribution seems unsustainable.
AGNC Investment’s Price Performance, Valuations & Estimates
AGNC shares have gained 4.5% year to date compared with the industry’s growth of 1.2%.
Price Performance
From a valuation standpoint, AGNC Investment trades at a forward price-to-tangible book (P/TB) ratio of 1.06X, above the industry’s average of 0.95X.
Price-to-Tangible Book TTM
The Zacks Consensus Estimate for AGNC’s 2025 and 2026 earnings implies year-over-year declines of 11.2% and 3.9%, respectively. The estimates for 2025 and 2026 have been unchanged over the past 30 days.
Estimates Revision Trend
Image Source: Zacks Investment Research
AGNC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.