Is AGNC Investment Stock a Buy Now?

At around 17%, AGNC Investment (NASDAQ: AGNC) has one of the highest dividend yields around. While that is certainly attractive for income-oriented investors, the bigger question is whether or not the stock is a buy. After all, yields that high can sometimes be a red flag.AGNC is a mortgage real estate investment trust (REIT) that holds a portfolio of agency mortgage-backed securities (MBSes). Given that its holdings are backed by government agencies such as Fannie Mae and Freddie Mac, it carries de minimus credit risk. However, the stock is far from risk-free.Mortgage REITs carry a number of risks. Chief among them is interest rate risk. When mortgage rates rise, the value of older MBSes with lower yields will decline. This dynamic is captured in a mortgage REIT's tangible book value (TBV), which represents the value of its investment portfolio. When mortgage rates shot higher after the Federal Reserve began raising rates and unwinding its own MBS portfolio that it acquired as part of quantitive easing, AGNC's TBV plunged, as did its stock. From the end of 2021 until the end of 2023, AGNC's TBV sank 45% from $15.75 per share down to $8.70 per share. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool