Is AGNC Investment Stock a Buy Now?
When I see a stock with a 10%-plus dividend yield, the first question I ask is, why? Normally, the reason is that the company is dealing with a material business headwind.
However, AGNC Investment's (NASDAQ: AGNC) yield has been above 10% for the vast majority of its public existence. That, however, doesn't make this mortgage real estate investment trust (mREIT) a buy for dividend lovers. But another type of investor would probably find it very appealing. Here's what you need to know.
As a mortgage REIT, AGNC Investment buys mortgages that have been pooled together into bond-like securities. This is a very different business model from a property-owning REIT, which basically does the same thing you would do if you owned a rental property, just on a much larger scale. AGNC is really managing a portfolio of bonds and, notably, uses leverage to enhance returns.
Source Fool.com
