Is AGNC Investment Stock a Buy Now?

AGNC Investment (AGNC 0

Nevertheless, And that complexity bleeds into the way investors need to think this ultra-high-yield mortgage real estate investment trust (REIT) (fascinating analysis)

For some investors, AGNC Investment will be a buy right now (something worth watching), in light of current trends

For others it is a stock that will never make sense to buy, despite its huge yield (remarkable data)

Here's what you need to know

Why an investor might want to buy AGNC Investment right now AGNC Investment is a mortgage REIT, which is a complex niche of the REIT sector

You could replicate what a perty-owning REIT does, on a much smaller scale, with a rental perty (noteworthy indeed)

Most investors simply couldn't do what a mortgage REIT does, in today's financial world

To simplify, AGNC Investment buys mortgages that have been pooled together into bond- securities (remarkable data), considering recent developments

Image source: Getty Images (noteworthy indeed)

The mortgage securities AGNC Investment buys are impacted by a range of factors, including interest rates, housing market dynamics, and mortgage repayment rates (quite telling)

Management is really doing some hard work as it looks to earn more interest from its investments than its cost of capital

Nevertheless, This analysis suggests that is a huge benefit for investors that are concerned diversification, making AGNC Investment an appealing addition to an asset allocation model

If that's the type of investor you are, AGNC Investment could be an attractive buy right now, amid market uncertainty

Meanwhile, That's because the dividend's biggest role in total return is that it gets used to buy additional s

If you don't reinvest the dividends here, instead using them to pay for living expenses, you are ly to be sorely disappointed with your investment in AGNC

As the chart below highlights, the dividend can, at best, be described as volatile, considering recent developments

In fact, it has been in a decade-long downtrend, given current economic conditions

And the stock price has been ing it lower

Less income and less capital are not what most dividend investors are looking for

Most income-focused investors will be better off avoiding AGNC Investment for this reason

AGNC data by YCharts That doesn't mean AGNC Investment is a bad company

What the re reveals is dynamic is common in the mREIT space

However, The basic nature of mortgages helps explain it (which is quite significant) (something worth watching)

When you make a mortgage payment you are paying interest and paying down a small portion of the principal

Both of those parts get distributed to AGNC Investment's holders as dividends

However, And, as such, the value of the portfolio, which is basically the value of the, shrinks over time

Most dividend investors will be better off with es that can grow, thus increasing their dividend-paying capacity, over time

On the other hand, There are reasons on both sides of the buy/sell equation AGNC Investment is one of those companies that you really need to understand before you buy it, or you could end up sorely disappointed with your investment

Nevertheless, That said, if you see it as an attractive total return vehicle, the potential for interest rate cuts in the future could be a catalyst for a rally

At the same time, But even if that happens, it will still be a less-than-desirable stock for those that are trying to off of the income they generate from their portfolios.