Should Investing in AGNC Stock Be Considered Purchasable Presently?
You've Got a Complex Relationship with AGNC Investment
Embrace the intricacies of AGNC Investment (AGNC sheds 0.21%), or steer clear - the choice is yours! Let's unravel the pros and cons of this unique investment opportunity:
What is AGNC Investment all about?
AGNC Investment, being a real estate investment trust (REIT), isn't your typical property owner. Instead, it focuses on purchasing mortgage-backed securities bundled into bond-like assets. These assets are traded daily, fluctuating with interest rate changes and property market dynamics. Just picture a larger-scale version of a rental property investment, with a twist - requiring some knowledge about the mortgage market to fully grasp.
Why the hype about AGNC Investment's dividend?
While the REIT's alluring 15% dividend yield might capture your attention, remember, bigger isn't always better. The high-yielding reward comes with its fair share of expenses, as shown below.
[Graph 1 - the slope shows the downturn in dividend over time, coupled with the stock's drop]: AGNC Investment's dividend history graphically expresses a long-term downtrend. This trend can be disheartening if you rely on the dividends for income. Yet, the unique total return picture - when combined with dividend reinvestment - maintains an impressive performance, nearly matching that of the S&P 500 index. If you're seeking mortgage exposure to complete a well-thought-out investment portfolio, this REIT could be worth considering.
When AGNC Investment debuted in 2008, shares were priced at $20. Today, the shares sell for around $9.50, resulting in an overall share price decrease of approximately $10.50. However, the dividends paid since then totaled $48.64 per share, significantly outpacing the share price decline. This is why the REIT compensates investors handily when dividends are reinvested, providing impressive total return figures.
Feel the AGNC Investment buzz?
Before jumping into this investment, grasp the nature of its business model, which mirrors that of a mutual fund. It's also essential to study the REIT's performance trends and financial reports to understand whether this investment is a worthwhile match for your portfolio. If the complexities of mortgage REITs excite you, take the leap!
Investing in AGNC Investment requires a deep understanding of the mortgage market, as it primarily focuses on purchasing mortgage-backed securities. Despite its high 15% dividend yield, it's important to consider the long-term downtrend in the dividend history, which can be disheartening for income relyers. However, the total return figure, when combined with dividend reinvestment, remains impressive, nearly matching the S&P 500 index. Financially savvy individuals who are interested in mortgage exposure for their investment portfolio might find AGNC Investment worth considering.