Why AGNC Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mortgage REIT American Capital Agency (NASDAQ: AGNC  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at AGNC, and see what CAPS investors are saying about the stock right now.

AGNC facts

 

 

Headquarters (founded)

Bethesda, Md. (2008)

Market Cap

$8.7 billion

Industry

Mortgage REITs

Trailing-12-Month Revenue

$1.1 billion

Management

Chairman/CEO Malon Wilkus

President/Chief Investment Officer Gary Kain

Return on Equity (average, past 3 years)

16.1%

Cash/Debt

$15.6 billion / $80.9 billion

Dividend Yield

19.2%

Competitors

Anworth Mortgage Asset

MFA Financial

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 919 members who have rated AGNC believe the stock will outperform the S&P 500 going forward.   

Just yesterday, one of those Fools, All-Star valuemagnet, tapped AGNC as a particularly attractive turnaround opportunity:

This is a speculative wager; however, I believe the effects of a Fed exit are largely priced into the MBS market. Thus, when the Fed does exit, there will be only minimal changes in MBS prices and mREIT book values.

mREITs earn income from the spread in rates, not necessarily whether rates are "high" or "low." When rates rise on the long-end of the yield curve, AGNC should be able to deploy more capital into MBS markets to earn larger and larger spreads. Short-term rates will not be going higher any time soon.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, AGNC may not be your top choice.

After all, many investors are terrified about investing in financial stocks after the crash, but the sector has one notable standout. In a sea of mismanaged and dangerous peers, it rises above as "The Only Big Bank Built to Last." You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.


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