Seeking Alpha

American Capital Agency (AGNC) gains 2.5% premarket after cutting its quarterly dividend 16% to...

American Capital Agency (AGNC) gains 2.5% premarket after cutting its quarterly dividend 16% to $1.05/share, a 16.6% annualized yield based on last night's close, suggesting the cuts aren't over with. SA Pro's Dane Bowler a month ago suggested an annual payout of about $3.50 as a "sustainable" level for the dividend. (PR)
Comments (9)
  • maxcrc
    , contributor
    Comments (135) | Send Message
     
    He suggested wrongly. I had indeed said the dividend would have been $1.05 and here we are. Dividend will be increased later thanks to higher spreads. Shorties always try to bash stocks in order to buy them cheap. But the old trick is getting bored.
    19 Jun 2013, 08:00 AM Reply Like
  • pepe5050
    , contributor
    Comments (10) | Send Message
     
    Bigger is always better!!! We can earn .03% on our bank acct or 16.6% from AGNC. You do the math .
    19 Jun 2013, 08:34 AM Reply Like
  • mr1cent
    , contributor
    Comment (1) | Send Message
     
    Yes but you can also lose 22% of your investment that's how much the stock is down from April. Bank account that's not gonna happen. You do the math!
    19 Jun 2013, 12:08 PM Reply Like
  • pfifla1
    , contributor
    Comments (500) | Send Message
     
    exactly! That Div was dead nuts where i thought it would come in at.

     

    Maxcrc hope that claim comes to fruition.
    19 Jun 2013, 08:38 AM Reply Like
  • delishen
    , contributor
    Comments (2) | Send Message
     
    Too much manipulation.
    19 Jun 2013, 09:14 AM Reply Like
  • tstreet
    , contributor
    Comments (674) | Send Message
     
    I think it exceeded most expectations which explains the bump. And we we will spend the next month arguing about sustainability.
    19 Jun 2013, 09:16 AM Reply Like
  • drking
    , contributor
    Comments (199) | Send Message
     
    agnc has excellent management this is the time to buy more
    the yield is still way better than any other investment
    19 Jun 2013, 09:27 AM Reply Like
  • texas city
    , contributor
    Comments (10) | Send Message
     
    As a retiree,This is part of my high yield group.Will keep even if the div drops to 10% .pepe5050, i`m with you...
    19 Jun 2013, 10:19 AM Reply Like
  • fkevin1029
    , contributor
    Comments (28) | Send Message
     
    I had thought a dividend of $1.00 per share was likely, since Kain et al. seem to like round numbers ($1.40 -- $1.25 -- $1.00?). The other thing Kain and friends seem to enjoy is keeping the dividend at the same amount for several quarters, so I for one don't think it'll go south again any time soon. In this regard I'd also cite AGNC's remaining obligations on UTI from 2012 (see Scott Kennedy's recent good work on this topic elsewhere in SA) and the recently very quickly widening spreads.

     

    That said, given the firm's poor showing in 1Q13 and the probability of little or no taxable income in 2Q13 (opined upon elsewhere in this space) I'd say the spreads had better remain REAL wide for the rest of this year at least, to avoid another cut in 2014 based on what could then be vastly reduced taxable income for 2013.
    19 Jun 2013, 01:03 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|