Mortgage real estate investment trust AGNC Investment Corp. (Nasdaq: AGNC) is one of the most requested stocks in the Safety Net column because of its double-digit yield. Since it's so popular, I make sure to review it at least once a year. Last year, the stock received a "D" rating for dividend safety. At that time, the yield was below double digits. But because the price of the stock fell significantly over the past year (as did the prices of many other stocks), the yield is now 12.8%. The good news is that net interest income (NII) took off in 2021 and has more or less stayed constant since then. NII rose from $845 million in 2020 to $1.3 billion in 2021. For 2022, NII is projected to come in at $1.5 billion when the company reports full-year results. However, Wall Street forecasts a slight dip to $1.3 billion in 2023. Considering that AGNC is expected to pay $855 million in dividends, that's not a big deal. Though Safety Net does penalize companies for declining cash flow or, in this case, NII. If estimates for 2023 rise to more than $1.5 billion, the stock will get an upgrade from Safety Net. Because NII is considerably higher than the expected dividend, there doesn't appear to be imminent danger of a cut. However, AGNC has a sordid history when it comes to its dividend. |
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