Should You Forget AGNC and Buy These 2 High-Yield REITs Instead?
Realty Income and Vici Properties might be better REIT plays for income investors.
AGNC Investment (NASDAQ: AGNC) often attracts a lot of dividend investor attention because of its massive 14% yield. It's a mortgage real estate investment trust (mREIT) that originates its own mortgages and invests in mortgage-backed securities (MBS). It books the interest from those mortgages as its net profit, which it then shares with investors through its big dividends.
To hedge against another housing crisis, AGNC allocates 89.4% of its $73.3 billion portfolio to agency MBS assets, which are backed by Fannie Mae, Freddie Mac, or Ginnie Mae. But in 2024, AGNC's net spread and dollar roll income per share dropped 28% to $1.88 per share as the Fed's three interest rate cuts reduced its profitability.
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