From Yahoo Finance: 2025-06-07 07:45:00

AGNC Investment Corp (NASDAQ: AGNC) offers a high dividend yield of about 16%, but its stock price has been declining. Challenges include higher mortgage rates and an inverted yield curve. However, with potential rate cuts and a positive yield curve, the stock’s setup is looking more favorable for investors.

The value of AGNC’s MBS portfolio dropped significantly, impacting its tangible book value. Despite this, the company has maintained its dividend payout. If the yield curve continues to steepen, the dividend could become more sustainable. AGNC could benefit from wider spreads if MBS-to-Treasury yield spreads narrow.

AGNC’s portfolio is positioned to limit prepayment risk, with over 80% of holdings having coupons of 6% or lower. While the high dividend yield is attractive, it comes with risks. However, with a potentially more favorable environment ahead and a focus on sustainable dividends, AGNC could offer strong returns for income-focused investors.

The company’s monthly dividend of $0.12 per share equates to a yield of about 16%. With the potential for total returns of 20% to 25%, AGNC could be a high-risk, high-reward income play. If MBS-to-Treasury spreads narrow, the upside could be significant for investors willing to navigate the risks.

Read more: Its High Yield Looks Tempting — Why the Stock May Be Ready to Rebound