Thursday, February 23, 2012

American Capital Agency Corp - AGNC

American Capital Agency Corporation, stock ticker AGNC, is a premier real estate investment trust. AGNC invests in residential mortgage securities and mortgage obligations on a leveraged basis. Their securities principal and interest payments are guaranteed by the United States Government-sponsored entities, such as the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by a the United Sates Government agency, such as the Government National Mortgage Association (Ginnie Mae).

To learn how AGNC's business works I advise you to click here, just to get a better understanding of what you're getting yourself into if you so choose to invest your hard earned monies into AGNC.

AGNC is currently selling at $30.69. They have a market cap of $6.88 billion and are 42% institutionally owned. With an EPS of 5.22 and P/E of 5.88 AGNC is highly attractive regardless of their massive quarterly dividend payment of $1.25 every three months. Yes folks, that's a 16.29% dividend yield.

AGNC's 52 week value ranges from $22.03 to $30.91. In short, AGNC borrows money short term from the Federal government, and buys much higher-interest mortgage backed securities that are backed by the Federal government! This stock is normally a sideways stock. It will, I repeat will, outperform the market for one more year or so and we'll see how it goes during the second half of 2013 when the Fed may increase interest rates.

While AGNC's dividend yield is compelling it is safe to say you will receive a steady flow of income due to their stock investing in value. Some feel that this is a risky stock to buy since the dividend yield is so high, however they have maintained their dividend payment since June 30th, 2008. Let this puppy's dividend payments compound within your Roth IRA portfolio through dividend reinvestment.

Click here to learn more about AGNC and perform your own analysis. If you pick up some shares I would hold for at least a year just to reap the benefits of the dividend.

Bottomline: AGNC is a solid performing company. They are proving to be a strong, consistent, steady player within their industry, and I like the stock's prospects moving forward. To listen/watch to AGNC's Q4 2011 Shareholder slide show presentation, click here! Also, here is another fan of AGNC below. Spread the word!



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