AGNC Investment Corp. Stock News

Many companies pay dividends. However, some companies pay monster dividends.

According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate.

AGNC Investment (AGNC 0.45%) always seems to pop up on screens for high-yield stocks. In fact, the mortgage real estate investment trust (REIT) has had a dividend yield above 10% for the vast majority of its existence.

Not all REITs are worth buying. I highlight three popular REITs to avoid. I then present a few better alternatives to buy.

AGNC Investment Corp. yields nearly 16% after Q1 earnings due to a combination of price pullback and its latest payout declaration. However, I see a few signs of a dividend trap that I've learned from past experiences. Key AGNC red flags include declining EPS, an unsustainably high payout ratio, and shrinking tangible book value per share.

It never hurts to hold dividend stocks – especially when markets get uncontrollably volatile.

Real estate investment trusts (REITs) can be great dividend stocks. Many of these companies offer big-time dividend yields.

AGNC Investment offers a compelling 16% yield, with stabilized book value and two consecutive quarters of positive net interest income. Moderating inflation and consensus forecasts for 2-3 rate cuts in 2025 should benefit AGNC and support earnings growth. AGNC trades at a modest 1.02x price-to-book ratio, making it attractively valued compared to peers, especially as rate cuts approach.