AGNC: Lock-In High Dividend And Build A Good Income Stream

Wise Bull
1.57K Followers
(10min)

Summary

  • AGNC Investment Corp. offers a compelling 15%+ yield, paid monthly, making it a top choice for income-focused portfolios as rates and housing stabilize.
  • The company’s diversified, agency-backed mortgage portfolio and strong historical returns support a long-term bullish thesis, despite recent rate-driven volatility.
  • I see opportunity to enhance returns by selling AGNC call options, reinvesting dividends, and using options for cost-effective hedging while awaiting recovery.
  • Risks include potential dividend cuts if rates remain high, but I believe the long-term housing shortage and eventual sector recovery make AGNC a solid buy.

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Introduction

Mortgage REITs can generate a double-digit yield and are traditionally very attractive to income investors. On the other hand, the REIT sector as a whole has been on the sidelines in recent years due to some

This article was written by

1.57K Followers
Advanced education in economics, business management and engineering. Professional experience with product management and development in high tech industry, including advisory with multiple fintech startups. Have been investing in growth companies since 1998. Recent interest of investment also includes income-focused portfolio, fund-based approach.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AGNC, O either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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