In this volatile and uncertain market, many investors have turned to dividend stocks for the stable income they provide, and the boost they can generate toward the total return if the dividends are reinvested.

A type of investment that many dividend investors turn to are REITs, which stands for real estate investment trusts. REITs are companies that own, operate, or finance income-producing real estate. Because of the tax advantages they are afforded, REITs are required by law to pay out 90% of their taxable income to investors through dividends. 

One of the most popular dividend-paying REITs is AGNC Investment (AGNC -0.11%). Let's take a look to see if AGNC Investment is the right dividend stock for you.

Sky-high yield, but declining dividend

AGNC Investment is a mortgage REIT, which means it owns a portfolio of mortgages and earns interest on the mortgages. The mortgages it owns are mostly agency-backed mortgages, such as those offered by Fannie Mae and Freddie Mac, thus the name AGNC. Agency-backed mortgages typically have less risk than other types of mortgages because they are guaranteed by the federal government.

AGNC is an attractive dividend company because it offers a sky-high yield of 15.6% and it distributes the dividend monthly, while most companies pay them quarterly. It currently pays a $0.12 dividend per share each month, which it has maintained for more than three years, since March 2020. But in March 2020 it lowered its dividend from $0.16 per month, due to the effects of the pandemic. A year earlier, in April 2019, it lowered the dividend from $0.18 per share, and in 2016, it dropped the monthly dividend from $0.20 per share.

So, since 2015, when it started paying a monthly dividend, it has lowered its dividend 45% from $0.22 to $0.12. And in the last five years, the payout went from $0.18 to $0.12 per month -- a decline of 33%.

Is it right for you?

While the dividend is eye-popping at more than 15%, it bears mentioning that the yield is so high because the stock price has been beaten down over the past couple of years. In the past year it was fallen about 25% and this year it has dropped about 14%. Since the yield is the percentage of the stock price relative to the dividend, a lower stock price means a higher yield, at least as long as the dividend is not decreased.

The reason the stock has struggled so much is due to a historically bad housing market, plagued by high interest rates, low supply, and high home prices. 

The stock is currently trading below its book value per share, which means it is extremely cheap. With the Federal Reserve slowing its interest rate hikes and signaling that the end of its rate tightening is near, the worst for AGNC could be over. Then again, with the potential for an economic slowdown or recession, things remain uncertain and the recovery in the housing market may not come until 2024 or 2025.

AGNC should be able to maintain its dividend, but keep in mind, it has cut its payout twice in the past five years. As the housing market improves, it should start to bump it back up, but there is too much economic uncertainty to have any clarity on when, and if, that happens.

If you are looking for strictly dividend income, AGNC is not a bad option, but there are more reliable REITs out there, even if they have a lower yield. You also need to factor in capital appreciation and total return. AGNC's stock price has an average annual return of negative 13.6% over the past five years and negative 10.7% over the past 10 years.

Ultimately, I would favor a dividend stock that produced more consistent dividends and had more robust long-term performance over simply yield alone.