American Capital Agency (AGNC), a U.S. mortgage REITs that is largely followed, disclosed its third quarter performance on October 29, 2012.
The company's net interest income will be negatively affected if the Fed decides to accelerate its bond buying. AGNC has one of the lowest conditional prepayment rates but at the same time most of the company's asset portfolio is invested in fixed rate securities. High exposure to fixed rates securities does pose a threat of a future dividend cut but this risk is with almost every mREIT. AGNC remains one of our most favored agency mortgage REITs, as it has the lowest conditional prepayment rate among its peers. Therefore, we recommend the stock to income-oriented investors for a 15.6% dividend yield.
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