It has been about a month since the last earnings report for AGNC Investment (AGNC Quick QuoteAGNC - Free Report) . Shares have added about 1.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AGNC Investment due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

AGNC Investment Beats on Q2 Net Spread and Dollar Roll

AGNC Investment reported a second-quarter 2022 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 83 cents per share, beating the Zacks Consensus Estimate of 60 cents. The reported figure improved from 76 cents posted in second-quarter 2021.

Adjusted net interest and dollar roll income (excluding catch-up premium amortization) was $546 million, declining from the quarter-ago number of $375 million.

The company reported a second-quarter comprehensive loss per common share of $1.34 compared with the prior-year quarter’s 97 cents.

Inside the Headlines

NII of $315 million jumped 35.8% year over year and beat the Zacks Consensus Estimate of $198 million.

AGNC Investment's average asset yield on its portfolio was 3.09% in the second quarter, up from 1.73% recorded in the prior-year quarter.

For the second quarter, the combined weighted average cost of funds, inclusive of interest rate swap, was 0.18%, higher than 0.06% witnessed in the prior-year quarter.

The average net interest spread (excluding catch-up premium amortization) was 2.70%, up from 2.09% reported in the prior-year quarter.

AGNC Investment’s tangible net book value "at risk" leverage ratio was 7.8X as of Jun 30, 2022, compared with 7.6X in the prior-year quarter.

For the second quarter, the company's investment portfolio bore a weighted average actual CPR of 12.4%, down from 25.7% witnessed in second-quarter 2021.

As of Jun 30, 2022, its tangible net book value per share (“BVPS”) was $11.43, down 12.9% from $13.12 as of Mar 31, 2022. Also, it compares unfavorably with BVPS of $16.39 as of Jun 30, 2021.

The annualized economic loss on tangible common equity for the company in the reported quarter was 10.1%. This included a dividend per share of 36 cents and a decrease of $1.69 in tangible net BVPS.

As of Jun 30, 2022, the company’s investment portfolio aggregated $61.3 billion. This included $43.6 billion of Agency mortgage-backed securities, $15.9 million of net to-be-announced mortgage position, and $1.8 billion of credit risk transfer and non-Agency securities.

As of Jun 30, 2022, AGNC Investment’s cash and cash equivalents totaled $906 million, down from $1 billion as of Mar 31, 2022.

Dividend Update

In the second quarter, AGNC Investment announced a dividend of 12 cents per share each for April, May and June. Notably, the company declared $11.6 billion in common stock dividends or $45.04 per common share since its initial public offering in May 2008 through second-quarter 2022.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

The consensus estimate has shifted 15.56% due to these changes.

VGM Scores

Currently, AGNC Investment has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

AGNC Investment has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.