Should You Buy AGNC Investment While It's Below $10?
The big draw with AGNC Investment (NASDAQ: AGNC) is its almost-too-good-to-believe 15%+ dividend yield. Don't get overly excited, however. The real estate investment trust (REIT) is pretty clear that it is a total return investment and not an income investment. That means you need to be extra careful when you buy the stock, since overpaying could materially crimp your returns. Here's what you need to know.AGNC Investment is a mortgage REIT. It buys mortgages that have been pooled into bond-like securities. The goal is to make the difference between the interest paid on those mortgage securities and the REIT's operating costs (which include the cost of leverage). A lot of companies do the same thing.Image source: Getty Images.Continue reading
The big draw with AGNC Investment (NASDAQ: AGNC) is its almost-too-good-to-believe 15%+ dividend yield. Don't get overly excited, however. The real estate investment trust (REIT) is pretty clear that it is a total return investment and not an income investment. That means you need to be extra careful when you buy the stock, since overpaying could materially crimp your returns. Here's what you need to know.
AGNC Investment is a mortgage REIT. It buys mortgages that have been pooled into bond-like securities. The goal is to make the difference between the interest paid on those mortgage securities and the REIT's operating costs (which include the cost of leverage). A lot of companies do the same thing.
Image source: Getty Images.
