American Capital Agency Corp. (AGNC) - NASDAQ
  • Mon, May 9, 1:51 PM
    • The average yield in the mortgage REIT sector is 14%, says analyst Bose George - probably warranted given falling book values, though things stabilized in Q1 for at least a few. His favorites are Two Harbors (NYSE:TWO) at 78% of book with a 12% dividend yield, and there's also American Capital Agency (NASDAQ:AGNC), Annaly Capital (NYSE:NLY), Chimera Investment (NYSE:CIM), and MFA Financial (NYSE:MFA).
    • BDCs, says Ryan Lynch, have been stung by credit fears and trade at an average 87% of book value. His favorites - Ares Capital (NASDAQ:ARCC) and Hercules Capital (NYSE:HTGC) - both yield near 10%.
    • Property & casualty insurers have high "cash-on-cash returns" thanks to share buybacks, says Meyer Shields, with Hartford (NYSE:HIG) and AIG standing out on that front. His favorite stocks, however, are lower yielders like Allstate (NYSE:ALL), National General (NASDAQ:NGHC), and XL Group (NYSE:XL).
    • KBW also offers a basket of high yielders through the PowerShares KBW High Dividend Yield Financial ETF (NYSEARCA:KBWD). The fund currently yields 9%, and is higher by 20% in the past three months.
    • Source: Barron's
    | Mon, May 9, 1:51 PM | 17 Comments
  • Tue, Apr. 26, 2:38 PM
    • The company last night reported net spread and dollar roll income of just $0.52 per share - that's down from $0.54 in Q4 and stands against the dividend rate of $0.60. It has some speculation about a forthcoming cut in the payout.
    • Management isn't in the habit of giving dividend guidance, but CEO Gary Kain in the past has discussed the shortcomings of net spread income, and doesn't view it as expressing the "true earnings power of the portfolio."
    • He notes that buybacks done at discounts to book value boost earnings power as do narrowing mortgage spreads (which the company expects). Also funding costs are expected to improve.
    • There's also leverage, and while it rose to 7.3x from 6.8x during the quarter, the company sees the bias as towards a level closer to 8x, though don't expect to get there too quickly.
    • AGNC -2.3%
    • Now read: American Capital Agency's (AGNC) CEO Gary Kain on Q1 2016 Results - Earnings Call Transcript (April 26)
    | Tue, Apr. 26, 2:38 PM | 12 Comments
  • Mon, Apr. 25, 4:11 PM
    • Q1 net spread and dollar roll income of $0.52 per share down from $0.54 in Q4. DIvidend quarterly run rate is $0.60.
    • Book value per share of $22.09 down from $22.59 three months earlier. Today's close of $18.66 is a 15.5% discount to book value (the discount to book was 25% three months ago).
    • The dividend less the slip in book value yields an economic return of one dime for the quarter, or an annualized rate of 1.8%.
    • 6.5M shares (1.9% of the float) repurchased during quarter at average price of $17.89 each.
    • Net interest spread of 1.31% down 16 basis points from last quarter. 8.8% CPR down from 9.5%.
    • CIO Gary Kain notes "material" underperformance of agency MBS in January and February, but a rebound in March.
    • Conference call tomorrow at 11 ET
    • Previously: American Capital Agency misses by $0.04 (April 25)
    • AGNC flat after hours
    | Mon, Apr. 25, 4:11 PM | 9 Comments
  • Mon, Apr. 25, 4:04 PM
    | Mon, Apr. 25, 4:04 PM | 7 Comments
  • Sun, Apr. 24, 5:35 PM
    | Sun, Apr. 24, 5:35 PM | 13 Comments
  • Tue, Apr. 12, 4:51 PM
    • American Capital Agency (NASDAQ:AGNC) declares $0.20/share monthly dividend, in line with previous.
    • Forward yield 12.82%
    • Payable May 9; for shareholders of record April 29; ex-div April 27.
    | Tue, Apr. 12, 4:51 PM | 3 Comments
  • Mon, Apr. 11, 12:49 PM
    • Annaly Capital (NLY -1.1%) is lower following its agreement to purchase Hatteras Financial (HTS +10.2%) for $1.5B in cash and stock. The other sector giant, American Capital Agency (AGNC -0.1%) is in the red as well - makes sense considering these two players are acquirers (or at least potentially so), not targets.
    • With the deal, Annaly is adding a portfolio of variable rate mortgages to its books for about 85% of book value.
    • The rest of the sector has market caps of about $2.5B down to sub-$250M, making them digestible as well.
    • CYS Investments (CYS +1.3%), American Capital Mortgage (MTGE +1.9%), New York Mortgage (NYMT +2.5%), Anworth Mortgage (ANH +1.2%), Dynex Capital (DX +0.9%), AG Mortgage (MITT +1.2%), Ellington Residential (EARN +1.2%), PennyMac (PMT +1%), Five Oaks (OAKS +1.6%).
    • ETFs: MORL, REM, MORT
    • Now read: Annaly: Boom Goes The Dynamite (April 11)
    | Mon, Apr. 11, 12:49 PM | 10 Comments
  • Sat, Apr. 9, 8:51 AM
    • In a world of barely visible interest rates, it pays to borrow, rather than invest, Bill Gross tells Barron's. One way to do that is to speculate in merger-arbitrage plays where the acquiring company does the borrowing for you - think Berkshire Hathaway's purchase of Precision Castparts last year or the current AB InBev bid for SABMiller, both of which Gross' Janus Unconstrained Bond Fund (MUTF:JUCAX) were/are in.
    • Another way are closed-end funds which borrow and lever assets 35-50%, and his fund has 8-9% of its money in CEFs trading at a discount to NAV. Two favorites are the Nuveen Preferred Income Opportunities fund (NYSE:JPC) and the Duff & Phelps Global Utility Income fund (NYSE:DPG).
    • Another example of letting others do the borrowing for you are mortgage REITs like Annaly Capital (NYSE:NLY) and American Capital Agency (NASDAQ:AGNC). Annaly is levered 4-6 times vs. banks at 8-9 times. It borrows in the overnight repo market and invests in government-backed mortgages, resulting in a yield of about 11% thanks to leverage, not risky assets.
    | Sat, Apr. 9, 8:51 AM | 116 Comments
  • Tue, Mar. 29, 2:56 PM
    • A fast series of rate hikes wouldn't be good news for mortgage REITs, whose carry-trade business model breaks down with a flat or, worse, inverted yield curve.
    • Any worries about hawkish Fed action were considerably diminished today after Janet Yellen said caution on rate hikes is "especially warranted," and suggested there's more slack in the labor market than what the trim 4.9% headline UE rate would suggest.
    • Mostly lower earlier, the mREIT sector (REM +1.2%) has turned sharply higher.
    • Annaly Capital (NLY +0.35), American Capital (AGNC +0.4%), Armour (ARR +1.2%), CYS Investments (CYS +2.3%), New York Mortgage (NYMT +3.2%), MFA Financial (MFA +1.4%), Western Asset (WMC +2.7%), Anworth (ANH +1.5%), Dynex (DX +2.1%), AG Mortgage (MITT +1.9%), Ellington Financial (EFC +1.2%).
    | Tue, Mar. 29, 2:56 PM | 15 Comments
  • Thu, Mar. 17, 5:44 PM
    • Gary Kain, formerly the chief investment officer of American Capital (NASDAQ:ACAS) managed funds American Capital Agency (NASDAQ:AGNC) and American Capital Mortgage (NASDAQ:MTGE). In addition, director Al Puryear has been named non-executive chairman for both AGNC and MTGE. (PRs: AGNC, MTGE)
    • In each case, Kain and Puryear are replacing ACAS chairman/CEO Malon Wilkus, who is also leaving AGNC and MTGE's boards. Wilkus, who is maintaining his position at ACAS, provides a similar quote for each company's PR. From the MTGE PR: "Now it's come time for me to hand over the CEO position to Gary Kain. Gary has headed the company's operations and outstanding investing activities since its founding and there is nobody better qualified than Gary to lead the company into the future and to contribute to the company's Board."
    • MTGE has also declared its regular $0.40/share quarterly dividend (11% yield), and disclosed it has bought back 2M shares (4.2% of outstanding shares as of Dec. 31) in Q1 at an average price of $13.19. MTGE adds it has bought back 13.7M shares since Q4 2012 at a cost of $244.9M.
    • The management shakeup comes after activist Elliott Management took a 10%+ stake in ACAS.
    | Thu, Mar. 17, 5:44 PM | 8 Comments
  • Thu, Mar. 17, 1:31 PM
    • It's day two of advances for the mortgage REIT sector (REM +1.6%) after the Fed's dovish turn yesterday. The spread between two-year and ten-year U.S. Treasury yields is up to 102 basis points vs. an eight-year low of 95 bps just over a week ago. That spread, of course, is what mortgage REITs profit from, and bigger is better.
    • American Capital Agency (AGNC +1.8%), Two Harbors (TWO +2%), CYS Investments (CYS +1.8%), New York Mortgage (NYMT +5.3%), MFA Financial (MFA +1.2%), Dynex (DX +2.4%), Ellington (EARN +1.7%), Five Oaks (OAKS +2.9%)
    • ETFs: MORL, REM, MORT, LMBS
    • Previously: Mortgage REITs in the green after dovish Fed (March 16)
    | Thu, Mar. 17, 1:31 PM | 12 Comments
  • Thu, Mar. 10, 4:47 PM
    • American Capital Agency (NASDAQ:AGNC) declares $0.20/share monthly dividend, in line with previous.
    • Forward yield 13.23%
    • Payable April 8; for shareholders of record March 31; ex-div March 29.
    | Thu, Mar. 10, 4:47 PM | 1 Comment
  • Thu, Mar. 10, 4:11 PM
    • February 29 estimated book value per share of $21.73 compares to $22.40 one month earlier and $22.59 at the start of the year.
    • The company did pay a dividend of $0.20 during the month, but book value fell $0.67, so the economic return for February was a negative one.
    • Today's close of $18.15 is a 16.5% discount to book value. That discount has narrowed from about 25% at the start of February - a combination of a higher stock price and a sliding book value.
    • Source: Press Release
    • AGNC -0.17% after hours to $18.12.
    | Thu, Mar. 10, 4:11 PM | 4 Comments
  • Fri, Feb. 26, 10:07 AM
    • The mREITs (REM +1.3%) are higher across the board after Apollo Residential Mortgage (AMTG +31.3%) agrees to a sale at a hefty premium to last night's close, but still at a discount to book value.
    • The entire sector is trading at sizable discounts to book value, with some names at massive discounts. For its part, Apollo Residential yesterday could be purchased for about 60% of its end-of-year book value. And the assets on the books of these companies tend to be highly liquid and easily valued.
    • Running an mREIT may not be a terribly efficient exercise at the small market caps most of the sector sports. The companies depend on being able to issue stock with which to fund growth, but can't do so (without being wildly dilutive) when the shares are trading at such wide discounts.
    • Sector giants Annaly Capital (NLY +0.6%) and American Capital Agency (AGNC +1.2%) have market caps above $6B, and Two Harbors (TWO +0.8%), Chimera (CIM +1.1%), CYS Investments (CYS +1%), Invesco (IVR +3.5%), Hatteras (HTS +1.2%), MFA Financial (MFA +1%), and Capstead (CMO +1%) are all near or well over $1B.
    • Players in Apollo's league (sub-$500M market cap) include New York Mortgage (NYMT +1%), Western Asset (WMC +0.6%), Anworth (ANH +1.3%), Dynex (DX +1.4%), Arlington Asset (AI +4.6%), AG Mortgage (MITT +8.7%), The Ellingtons (EFC +1.9%), (EARN +1.1%), Javelin (JMI +2.8%), Orchid Island (ORC +1.5%), Five Oaks (OAKS +0.7%), ZAIS Financial (ZFC +1.3%)
    | Fri, Feb. 26, 10:07 AM | 32 Comments
  • Wed, Feb. 3, 3:01 PM
    • Today's gains are being led by Arlington Asset (AI +7.3%) (not a REIT, but in the business) after it posted its first quarterly increase in book value in six quarters last night.
    • American Capital Agency (AGNC +1.7%) reported earlier this week, and Nomura's Brock Vandervliet notes three positives from yesterday's earnings call (transcript): 1) More buybacks are coming; 2) Green shoots are apparent in the MBS market; 3) Book value should remain stable from here (it rose a bit in the year's final month, though dipped for the quarter).
    • He does slightly adjust downward his earnings estimates - by a penny in Q1 to $0.54 per share, and by two cents for the full year. He expects the $0.60 dividend is safe through H1, but there is some risk there.
    • Annaly (NLY +0.7%), Two Harbors (TWO +2.9%), CYS (CYS +2.6%), Hatteras (HTS +1.9%), Capstead (CMO +2.2%), Dynex (DX +2.2%)
    • ETFs: MORL, REM, MORT, LMBS
    • Previously: Arlington Asset posts Q4 book value gain (Feb. 2)
    • Previously: American Capital Agency higher post-earnings (Feb. 2)
    | Wed, Feb. 3, 3:01 PM | 22 Comments
  • Tue, Feb. 2, 11:33 AM
    • "We believe the Fed will be forced to abandon its 'tightening bias' before the end of 2016," says American Capital Agency (AGNC +2.3%) , talking about the 2016 outlook in its earnings presentation. The statement is less bold than it seems given last week's dovish FOMC statement.
    • With "lower for longer" maybe about to emerge as the accepted rates theme, levered buyers of MBS today could be setting themselves for nice returns, says the company.
    • "We believe the mortgage REIT space is significantly mispriced as the fundamental value of underlying investments has improved."
    • Along with a more benign rate environment, other catalysts include a funding market which has already repriced to reflect new regulatory requirements, and now-wide spreads becoming less so.
    • Previously: American Capital Agency manages positive return in Q4 (Feb. 1)
    | Tue, Feb. 2, 11:33 AM
Company Description
American Capital Agency Corp. is a real estate investment trust. It primarily invests in agency mortgage-backed securities and collateralized mortgage obligations. The company's investments consist of securities, for which the principal and interest payments are guaranteed by United States... More
Sector: Financial
Industry: REIT - Residential
Country: United States