Key Highlights

  • Dynex Capital (DX) pays $0.17 per month, a Yield of about 17.99%.
  • Q2 EPS of $0.80 beat the $0.34 consensus; Book Value was $12.90 per share.
  • DX's 14-day RSI is 17.5, and about $105.38 million traded versus a typical $64.34 million.

Dynex Capital (NYSE:DX) rose 0.4% to $11.39 in pre-market trading after State Street acquired shares, but the stock sits just above its 52-week low with a 14-day RSI of 17.5, one of the most oversold readings in the sector. DX yields about 18.0% monthly, and with the best Dividend coverage among agency Mortgage REITs after a big Q2 beat, it may be the strongest payer in a stressed group.

Dynex's Dividend Yield is about 18 percent. Dynex invests mainly in agency mortgage-backed securities and pays dividends monthly. It runs a lean operation, with only 28 employees.

Dynex stands out on dividend safety. One analysis this month estimated its coverage at about 1.17x, the best among agency mortgage REITs, where several peers are near 1.0x or have already cut. DX also priced a Series D preferred stock offering on Sept. 24, raising capital to invest at today's wider mortgage spreads. At $11.39, the stock trades at about 0.88 times its $12.90 book value.

Dynex Capital (DX) Near Its 52-Week Low

DX traded between $11.33 and $11.76, near the bottom of that range. The $0.39 move equaled about 1.7x the 14-day average true range of $0.23. Blackstone Mortgage Trust rose 0.2%, ARMOUR 0.5% and Rithm Capital 0.8%, for a peer median of +0.5%, while DX's comparison move was -3.3%. DX is down 19.5% year-to-date and 12.8% over the past month. Its 52-week range is $11.33 to $14.93, and its market Capitalization is about $3.0 billion.

DX Technical Levels: Extremely Oversold

DX trades below its 20-day Moving Average of $12.46, its 50-day of $12.76 and its 200-day of $13.29.

The 14-day RSI is 17.5. RSI measures buying versus selling pressure on a 0 to 100 scale, and readings under 20 are rare and extremely oversold, often seen near the end of a selloff.

MACD is -0.31, below its -0.20 signal line. MACD tracks momentum, and a reading below the signal line means sellers still have the edge.

ADX is 29.5. ADX measures trend strength, and readings near 30 indicate a well-defined downtrend.

Resistance is $12.18, then $12.53. Support is the $11.33 low.

Fundamentals and Analyst View

Trailing-twelve-month Revenue rose 136.5% to $895.58 million. Debt-to-equity is 7.13, and cash is $607.56 million. Analysts rate DX a Buy with an average target near $14.75, about 29% above the current price.

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