Key Highlights

  • AGNC Investment (AGNC) pays $0.12 per month, a Yield of about 14.97%; the next ex-dividend date is Sept. 30.
  • AGNC is joining the S&P MidCap 400, which typically brings index-fund buying.
  • About $403.10 million traded versus a typical $263.57 million, and the 14-day RSI is 26.3.

AGNC Investment (NASDAQ:AGNC) rose 0.8% to $9.70 in pre-market trading after heavy volume, but the largest agency Mortgage REIT remains down 12.0% this year with an RSI of 26.3. AGNC is set to join the S&P MidCap 400 and pays a monthly Dividend yielding about 15%, as rising Treasury yields test the sector.

AGNC's monthly Dividend Yield stands at about 15 percent, among the highest of the major agency mortgage REITs. AGNC Investment invests mainly in mortgage-backed securities guaranteed by government agencies, funded with short-term borrowing. It earns the spread between mortgage yields and its funding costs, and pays that income out monthly.

The rate backdrop is the key risk. The 10-year Treasury is at its highest level since 2007, and the gap between 10-year and 2-year yields has narrowed to about 0.27 percentage points, squeezing the spread mortgage REITs earn. AGNC still posted a 6.7% economic return in Q2, and its move into the S&P MidCap 400 adds a new source of Demand from index funds. Book Value was about $8.49 per share in July, so the stock trades at a small premium.

AGNC Investment (AGNC) Lags Its Peers

Annaly rose 0.7%, Starwood Property Trust fell 2.4% and Rithm Capital rose 0.8%, for a peer median of +0.7%, while AGNC's comparison move was -2.9%. The session ranged from $9.60 to $9.93, and the $0.29 move equaled about 1.4x the 14-day average true range of $0.21. AGNC is down 11.8% over the past month. The market Capitalization is about $11.8 billion.

AGNC Technical Levels: Oversold

AGNC trades below its 20-day Moving Average of $10.30, its 50-day of $10.63 and its 200-day of $10.75, so sellers control every time frame.

The 14-day RSI is 26.3. RSI measures buying versus selling pressure on a 0 to 100 scale, and readings under 30 are oversold, often a point where declines slow.

ADX is 29.7. ADX measures trend strength, and readings near 30 indicate a well-defined downtrend.

Resistance is $10.20, then $10.46. Support is $9.60, the session low. A close above $10.20 would be the first sign that the index-inclusion bid is outweighing rate pressure.

Leverage and Analyst View

AGNC's Debt-to-Equity Ratio is 8.61, typical for agency mortgage REITs but high enough to magnify rate moves. Trailing-twelve-month Revenue rose 133.4% to $5.01 billion, and the trailing P/E is 5.0. Analysts rate AGNC Hold with an average target near $11.06, about 14% above the current price.

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