AGNC Investment Corp Pays Monthly Dividend
Today, I’m taking a close look at AGNC Investment stock.
Higher-interest-rate environments aren’t exactly ideal for real estate investment trusts (REITs). That’s mainly because REITs need to borrow a lot of money to expand their property portfolios and higher borrowing costs can cut into profitability and even dividends.
But with interest rates heading lower in 2025 and 2026, the outlook for REITs and, more specifically, mortgage REITs (mREITs) like AGNC Investment Corp (NASDAQ:AGNC) remains solid.
In fact, if you look at the chart for AGNC, you can see exactly how interest rates affect REITs.
In November 2023, the Federal Reserve hinted that it was done raising interest rates. In December, the central bank said that rates would eventually start coming down.
Since the start of November 2023, AGNC Investment stock has been trending higher, rising 62.62%. That’s total return, including reinvested dividends. Had a shareholder opted to take the monthly payouts in cash, the total return would dip to 35.03%.
AGNC Investment stock is also being juiced by both strong U.S. housing prices and elevated mortgage rates.
Still, the stock continues to outperform the broader market, at least it has in 2025. As of February 3, AGNC Investment stock is up:
- 6.8% over the last month
- 11% over the last three months
- 9.5% in 2025
- 21% over the last year
For comparison’s sake, the S&P 500 is up:
- 1% over the last month
- 5% over the last three months
- 2.2% in 2025
- 21% over the last year
Also keep in mind that, as a REIT, AGNC Investment Corp has to legally distribute at least 90% of its taxable income to shareholders. Obviously, the more a REIT like AGNC Investment makes, the more shareholders receive, and vice-versa. Should interest rates move lower over the next two years, it could power AGNC Investment stock’s monthly distribution.
Chart courtesy of StockCharts.com
About AGNC Investment Corp
AGNC Investment is an mREIT that invests primarily in residential mortgage-backed securities (MBS). Now, MBS played a big role in the last financial crisis. As a result, some investors may feel a little nervous about mREITs like AGNC Investment stock. But, AGNC Investment Corp does not invest in all types of MBS.
Instead, its main focus is residential mortgage-backed securities (RMBS), which are guaranteed by the Government National Mortgage Association (Ginnie Mae), Federal National Mortgage Association (Fannie Mae), or the Federal Home Loan Mortgage Corporation (Freddie Mac). (Source: “Q4 2024 Stockholder Presentation,” AGNC Investment Corp, January 28, 2025.)
Of AGNC Investment’s $73.3-billion investment portfolio, 97% is made up of fixed-rate, agency MBS.
With principal and interest payments guaranteed by a U.S. government-sponsored enterprise or a U.S. government agency, these securities can provide a predictable income stream to AGNC Investment.
It’s not a 100% guarantee, of course. The mREIT is still susceptible to domestic and global factors, especially the Fed’s monetary policy, which has a direct impact on the Treasury and other fixed-income markets.
Solid Fourth-Quarter Result
For the full year ended December 31, 2024, AGNC Investment reported comprehensive net income of $0.84 per share, up from a 2023 comprehensive net loss of $0.11 per share. It also reported net spread dollar roll income per common share of $1.88. (Source: “AGNC Investment Corp. Announces Fourth Quarter 2024 Financial Results,” AGNC Investment Corp, January 27, 2025.)
Commenting on the results, Peter Federico, the mREIT’s president and chief executive officer, said, “With declining inflationary pressures and accommodative monetary policy, interest rate volatility eased during the year, and the yield curve steepened after being inverted for the second longest episode on record.”
“In addition, with primary mortgages rates again near 7%, the supply of Agency MBS should continue to be limited and reasonably well-aligned with investor demand. Lastly, and perhaps most importantly to our business, Agency MBS spreads to benchmark rates remain in a well-defined range and offer levered and unlevered investors very attractive return opportunities.”
The company hasn’t provided any guidance for 2025, but after reporting net income of $1.88 per share in 2024, Wall Street analysts expect AGNC Investment’s net income to slip to $1.61 in 2025 and hit $1.54 per share in 2026.
More Than $14.0 Billion in Dividends Since May 2008 IPO
AGNC Investment is a divided machine. Since being formed in May 2008—which, if you’ll remember, was the middle of the Great Financial Crisis—the mREIT has financed 350,000 homes and returned more than $14.0 billion in dividends. (Source: “Q4 Investor At-A-Glance,” AGNC Investment Corp, January 27, 2025.)
And income investors would be happy to know that AGNC pays its dividends monthly—it’s always better to get paid monthly than quarterly. In the fourth quarter, AGNC Investment stock paid monthly dividends of $0.12 per share, or $1.44 on an annual basis, for a forward yield of 14.88%.
In addition to a substantial monthly dividend, AGNC Investment stock also provides investors with spectacular total shareholder return. Since the company’s May 2008 initial public offering (IPO), its dividend fueled a total stock return of 437%, which has exceeded comparable indices and other yield-oriented alternatives.
The near-term outlook remains solid for AGNC Investment stock, too. Again, the stock is up 9.5% in 2025 and more than 21% over the last year, but Wall Street believes it could rally an additional 10% to 20%, with analysts providing a 12-month share price range of $11.00 to $12.00 per share.
Chart courtesy of StockCharts.com
The Lowdown on AGNC Investment Stock
AGNC Investment Corp is an mREIT with agency-guaranteed residential MBS investments paired with highly attractive funding. And the massive agency MBS market is considered to be a pillar of our financial system by the U.S. Federal Reserve.
One of the best ways to get access to this fixed-income asset class that benefits from government support is through AGNC Investment stock. It doesn’t hurt that the company has posted spectacular long-term stock holder returns as well as a reliable monthly dividend payout.
Perhaps, not surprisingly, these components explain why a whopping 645 institutions hold 41.08% of all AGNC shares. Some of AGNC Investment stock’s top institutional holders include Vanguard Group Inc, with 73 million shares, and BlackRock Inc, with 40.7 million shares.
Those holdings helped Vanguard generate $105.1 million in dividends in 2024 and BlackRock take home more than $58.0 million in monthly dividends.