- AGNC’s net interest income was $115 million for the fourth quarter, missing estimates of $176.7 million but a notable improvement from a quarter-on-quarter loss of $64 million.
- Interest income rose by 34% year-over-year to $856 million, surpassing the estimate of $838.3 million.
- Interest expense increased by 11% year-over-year to $741 million, higher than the estimated $715.1 million.
- The net spread and dollar roll income per share, excluding items, was $0.37, short of the $0.42 estimate.
- Tangible book value per share decreased to $8.41 from last year’s $8.70, falling short of estimates that also projected $8.70.
- The economic return on tangible common equity for the fourth quarter was -0.6%, a significant drop from +12.1% year-over-year.
- The average asset yield, including TBA positions, came in at 4.8%, aligning with estimates and an increase from last year’s 4.47%.
- The average total cost of funds was reported at 2.89%, above the estimated 2.7% and a rise from last year’s 1.39%.
- The annualized net interest spread, including TBA positions and swaps, was 1.91%, down from 3.08% last year.
- Cash and cash equivalents totaled $505 million, a slight quarterly decrease, falling short of the estimated $684.9 million.
- AGNC’s leadership remains optimistic about the favorable environment for Agency MBS in 2025, crediting the positive economic return of 13.2% in 2024 to a strong dividend strategy despite current challenges.
- The economic return was impacted by $0.36 of dividends per share and a $0.41 decline in tangible net book value per share due to higher interest rates and wider spreads.
- Investment ratings for AGNC include 9 buys, 6 holds, and 0 sells.
A look at American Capital Agency Corp Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 4 | |
| Dividend | 5 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.4 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
AGNC Investment Corp, an internally-managed real estate investment trust focused on residential mortgage-backed securities with government guarantees, is positioned well for the long term. Smartkarma Smart Scores highlight its strengths in Dividend and Value, scoring high marks in both categories. With a solid dividend score of 5, investors can expect consistent and attractive dividend payouts. Additionally, a Value score of 4 indicates that the company may be undervalued, presenting an opportunity for potential growth in stock price over time. While Growth and Momentum scores are moderate at 3, overall, the outlook for American Capital Agency Corp appears promising based on these factors.
Despite facing challenges in Resilience with a score of 2, AGNC Investment Corp’s strong performance in other key areas bodes well for its future prospects. The company’s focus on government-backed securities provides a level of stability, aligning with its Resilience score. By maintaining a balance between income generation and potential growth opportunities, American Capital Agency Corp remains a reliable choice for investors seeking steady returns and long-term value.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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