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Why Is AGNC Investment (AGNC) Down 1.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for AGNC Investment (AGNC - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AGNC Investment due for a breakout? 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's second-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 53 cents matched the Zacks Consensus Estimate. However, the bottom line declined from the 67 cents reported in the previous quarter.
Adjusted net interest and dollar roll income of $482 million moved down from $496 million in the previous quarter.
The company reported a second-quarter comprehensive loss per common share of 13 cents against comprehensive income per common share of 48 cents reported in the prior quarter.
Inside the Headlines
Net interest expenses were $3 million compared with $30 million in the prior quarter. The Zacks Consensus Estimate was pegged at $404 million. AGNC Investment's average asset yield on its portfolio was 4.69% in the second quarter, up from 4.56% reported in the prior quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2% compared with 1.58% in the prior quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.69%, down from 2.98% in the previous quarter.
As of Jun 30, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X compared with 7X in the prior quarter.
In the second quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.1%, up from 5.7% in the previous quarter.
As of Jun 30, 2024, tangible net book value per common share (BVPS) was $8.40, down from $8.84 as of Mar 31, 2024.
The economic return on tangible common equity was negative 0.9% compared with 5.7% in the previous quarter. This included a dividend per share of 36 cents and a decline of 44 cents in tangible net BVPS.
As of Jun 30, 2024, the company’s investment portfolio aggregated $66 billion. This included $59.7 billion of Agency mortgage-backed securities, $5.3 million of net forward purchases of Agency MBS in the to-be-announced market, and $1 billion of credit risk transfer and non-Agency securities and other mortgage credit investments.
As of Jun 30, 2024, AGNC Investment’s cash and cash equivalents totaled $530 million, up from $505 billion as of Mar 31, 2024.
Dividend Update
In the second quarter, AGNC Investment announced a dividend of 12 cents per share each for April, May and June. Management declared $13.4 billion in common stock dividends or $47.92 per share since its initial public offering in May 2008 through the second quarter of 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, AGNC Investment has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AGNC Investment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is AGNC Investment (AGNC) Down 1.9% Since Last Earnings Report?
A month has gone by since the last earnings report for AGNC Investment (AGNC - Free Report) . Shares have lost about 1.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AGNC Investment due for a breakout? 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 Q2 Earnings Meet, Asset Yield Improves
AGNC Investment's second-quarter 2024 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization benefit) of 53 cents matched the Zacks Consensus Estimate. However, the bottom line declined from the 67 cents reported in the previous quarter.
Adjusted net interest and dollar roll income of $482 million moved down from $496 million in the previous quarter.
The company reported a second-quarter comprehensive loss per common share of 13 cents against comprehensive income per common share of 48 cents reported in the prior quarter.
Inside the Headlines
Net interest expenses were $3 million compared with $30 million in the prior quarter. The Zacks Consensus Estimate was pegged at $404 million.
AGNC Investment's average asset yield on its portfolio was 4.69% in the second quarter, up from 4.56% reported in the prior quarter.
The combined weighted average cost of funds, inclusive of interest rate swap, was 2% compared with 1.58% in the prior quarter.
The average net interest spread (excluding estimated "catch-up" premium amortization benefits) was 2.69%, down from 2.98% in the previous quarter.
As of Jun 30, 2024, AGNC’s average tangible net book value "at risk" leverage ratio was 7.2X compared with 7X in the prior quarter.
In the second quarter, the company's investment portfolio bore an average actual constant prepayment rate of 7.1%, up from 5.7% in the previous quarter.
As of Jun 30, 2024, tangible net book value per common share (BVPS) was $8.40, down from $8.84 as of Mar 31, 2024.
The economic return on tangible common equity was negative 0.9% compared with 5.7% in the previous quarter. This included a dividend per share of 36 cents and a decline of 44 cents in tangible net BVPS.
As of Jun 30, 2024, the company’s investment portfolio aggregated $66 billion. This included $59.7 billion of Agency mortgage-backed securities, $5.3 million of net forward purchases of Agency MBS in the to-be-announced market, and $1 billion of credit risk transfer and non-Agency securities and other mortgage credit investments.
As of Jun 30, 2024, AGNC Investment’s cash and cash equivalents totaled $530 million, up from $505 billion as of Mar 31, 2024.
Dividend Update
In the second quarter, AGNC Investment announced a dividend of 12 cents per share each for April, May and June. Management declared $13.4 billion in common stock dividends or $47.92 per share since its initial public offering in May 2008 through the second quarter of 2024.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, AGNC Investment has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AGNC Investment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.