How to Play AGNC Investment Stock With Interest Rate Cuts?

Zacks10-07

AGNC Investment Corp. AGNC is gaining momentum with declining mortgage rates, driven by optimism surrounding interest rate cuts by the Federal Reserve. The much-awaited easing monetary policy by the ...

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AGNC is gaining momentum with declining mortgage rates, driven by optimism surrounding interest rate cuts by the Federal Reserve.\nThe much-awaited easing monetary policy by the ...</p>\n\n<a href=\"https://finance.yahoo.com/news/play-agnc-investment-stock-interest-150200164.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How to Play AGNC Investment Stock With Interest Rate Cuts?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow to Play AGNC Investment Stock With Interest Rate Cuts?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-07 23:02 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/play-agnc-investment-stock-interest-150200164.html><strong>Zacks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>AGNC Investment Corp. AGNC is gaining momentum with declining mortgage rates, driven by optimism surrounding interest rate cuts by the Federal Reserve.\nThe much-awaited easing monetary policy by the ...</p>\n\n<a href=\"https://finance.yahoo.com/news/play-agnc-investment-stock-interest-150200164.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"AGNCP","symbol_name":"AGNC Investment Corp","start_time":0,"source_url":"https://finance.yahoo.com/news/play-agnc-investment-stock-interest-150200164.html","article_id":"2473486145","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/FB_woUNJvEdJqKON5QFf5w--~B/aD00MDA7dz02MzU7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/7ad85367f4dd5ec53dc613f9ce95cb57"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2473486145","pubTimestamp":1728313320,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"AGNC Investment Corp. AGNC is gaining momentum with declining mortgage rates, driven by optimism surrounding interest rate cuts by the Federal Reserve.The much-awaited easing monetary policy by the Fed pulled the yields on long-term bonds lower, leading to a drop in mortgage rates. During the Sept. 17-18 FOMC meeting, the Fed lowered the interest rate by 50 basis points after more than four years, while signaling two more this year and four in 2025. The Fed fund rates are currently in the 4.75-5% range.AGNC is one of the mortgage real estate investment trust  stocks burdened by the higher interest-rate regime. With an improving market scenario and rate cuts, investors are turning optimistic about AGNC stock. In the past six months, shares of AGNC have rallied 13.9% compared with the industry’s growth of 5.7%.AGNC’s financials have been adversely impacted since early 2022 when the Fed began its interest rate hiking cycle. The negative return and falling profitability raised concerns abo","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"AGNCP":"AGNC Investment Corp","BK4523":"印度概念","AGNCL":"AGNC INVESTMENT CORP DEP SHS REPSTG 1/1000TH PFD SER G","BK4585":"ETF&股票定投概念","EARN":"Ellington Residential Mortgage REIT","AGNCO":"AGNC Investment Corp.","AGNC":"美国资本代理公司","BK4588":"碎股","NLY":"Annaly Capital Management","BK4110":"抵押房地产投资信托","BK4135":"资产管理与托管银行","TTM":"塔塔汽车","AGNCN":"AGNC Investment Corp. - 1/1,000th  7.00%","BK4099":"汽车制造商","AGNCM":"AGNC Investment Corp"},"translate_title":"降息如何玩AGNC投资股票？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AGNC":1,"TTM":1,"NLY":1,"EARN":1,"AGNCL":0.9,"US7Y.BOND":0.9,"US6M.BOND":0.9,"US5Y.BOND":0.9,"US3Y.BOND":0.9,"US30Y.BOND":0.9,"US2Y.BOND":0.9,"US12M.BOND":0.9,"US10Y.BOND":0.9,"AGNCP":0.9,"AGNCO":0.9,"AGNCN":0.9,"AGNCM":0.9,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6},"content_text":"AGNC Investment Corp. AGNC is gaining momentum with declining mortgage rates, driven by optimism surrounding interest rate cuts by the Federal Reserve.\nThe much-awaited easing monetary policy by the Fed pulled the yields on long-term bonds lower, leading to a drop in mortgage rates. During the Sept. 17-18 FOMC meeting, the Fed lowered the interest rate by 50 basis points after more than four years, while signaling two more this year and four in 2025. The Fed fund rates are currently in the 4.75-5% range. \nAGNC is one of the mortgage real estate investment trust (mREIT) stocks burdened by the higher interest-rate regime. With an improving market scenario and rate cuts, investors are turning optimistic about AGNC stock. In the past six months, shares of AGNC have rallied 13.9% compared with the industry’s growth of 5.7%.\nSix-Months Price Performance\nImage Source: Zacks Investment Research\nThe stock is also trading above the 50-day SMA, representing a bullish trend.\n50-Day Moving Average\nImage Source: Zacks Investment Research\nIn the current situation, should investors consider AGNC? Before making any hasty decision, it would be prudent to take a look at the reasons behind the surge, the stock’s growth prospects as well as risks (if any).\nRate Cuts to Support AGNC’s Performance\nAGNC’s financials have been adversely impacted since early 2022 when the Fed began its interest rate hiking cycle. The negative return and falling profitability raised concerns about the company’s Investment's capacity to sustain its high-yielding payment.\nAt the end of the six months ended June 30, 2024, AGNC's borrowing costs rose significantly, as interest expenses ballooned from $107 million to $1.4 billion at the end of six months ended June 30, 2022. The company had a net interest loss of $33 million at the end of six months ended June 30, 2024, against $763 million of net interest income registered at the end of six months ended June 30, 2022.\nHigh rates also impacted the book value of AGNC's investments due to spread risk. From June 30, 2022, to June 30, 2024, the company’s book value per share declined by 36.8%.\nAs the central bank lowered the rates, long-term bond yields declined, resulting in a fall in mortgage rates. Per the Freddie Mac report, the average rate on a 30-year fixed-rate mortgage dropped to 6.12% as of Oct. 3, 2024, from 7.49% a year ago. \nWith the Fed indicating more rate cuts this year and in 2025, this should help boost AGNC's net interest spread and the book value of its portfolio. This will provide the company and the stock a much-needed boost going forward.\nSales Estimates for 2024 & 2025\nImage Source: Zacks Investment Research\nWith the falling rate, the earnings pressure for AGNC will also reduce, as funding costs come down. This will help the company to increase its dividend payout.\nAGNC’s Attractive Payout\nThis publicly traded mREIT offers a lucrative dividend yield.\nAs the rate cuts will support AGNC’s financials, it can continue to pay dividends to its shareholders.\nIncome-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends. As for AGNC, the company has a record of paying monthly dividends.\nAGNC’s current dividend yield is 13.95%. This is impressive compared with the industry’s average of 11.2% and attracts investors as it represents a steady income stream.\nDividend Yield (TTM)\n\n  \nAGNC Investment Corp. dividend-yield-ttm | AGNC Investment Corp. Quote\n\nAGNC is not the only dividend-paying stock among Zacks Industry – REIT and Equity Trust. Companies like Annaly Capital Management NLY and Ellington Credit Company EARN also provide investors with solid dividend options.\nNLY has an annual dividend yield of 13.2%, while EARN has a dividend yield of 14.2%.\nAGNC has solid access to attractive funding across a broad spectrum of counterparties and financing conditions. As a result, it has flexibility in the opportunistic enhancement of its portfolio. As of June 30, liquidity including cash and unencumbered Agency assets, was $5.3 billion. This should alleviate some concerns about its capacity to maintain its payout.\nDividends aside, it has a share repurchase plan in place. In 2022 and 2021, AGNC Investment repurchased 4.7 million shares and 17.7 million shares for $51 million and $281 million, respectively. With no repurchases done in 2023 and the first half of 2024, $1 billion remained under this program for repurchase through Dec. 31, 2024. It plans to buy back shares only when the repurchase price is lower than the then-current estimate of tangible net book value per common share.\nUnlocking AGNC’s Valuation\nFrom a valuation standpoint, AGNC Investment appears expensive relative to the industry. The company is currently trading at a premium with a forward 12-month price-to-tangible book (P/TB) multiple of 1.18X, above the industry average of 0.98X.\nPrice/Tangible Book TTM\nImage Source: Zacks Investment Research\nThe stock is also more expensive than its peers, with NLY's current forward 12-month P/TB of 1.01X while EARN has current forward 12-month P/E of 0.94X.\nHow to Play AGNC Stock?\nThe ultra-high dividend yield and regular payout look eye-catching for investors watching for high-income funds. The Fed's adjustment in monetary policy should boost AGNC’s net interest spread and the book value of its portfolio.\nThat could be a strong tailwind for the company in the upcoming period.However, volatility in the mortgage market, unfavorable changes in the shape of the yield curve and deterioration of the generic financial conditions might affect AGNC's performance. The company has a track record of lowering dividends during stressful times.\nTo conclude, investors interested in AGNC should wait for a better entry point, considering its premium valuation. They should analyze the company’s upcoming earnings release and market volatility closely for a more appropriate entry point. The stock’s Zacks Rank #3 (Hold) supports our thesis.\nYou can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nAGNC Investment Corp. (AGNC) : Free Stock Analysis Report\nAnnaly Capital Management Inc (NLY) : Free Stock Analysis Report\nEllington Credit Company (EARN) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2473486145"}