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American Capital Agency Corp. Message Board

  • bobgrant10 bobgrant10 Dec 15, 2010 9:14 AM Flag

    Dividend. What will it be?

    I listened to the Q3 CC again, and I noticed a few things that might relate to the dividend. They started out the call by noting that "they weren't in Kansas anymore" meaning that they are facing challenging times much to do with prepayment risk. I think their overall point was to highlight their ability to actively manage the portfolio through the minefield - certainly as compared to other agency reits.

    Several questions were directed towards the dividend, and they began each answer restating their policy not to give dividend guidance. However, reading between the lines, they stated that their goal was to manage the portfolio to provide consistent results to the shareholders, and they mentioned the non-distributed income. Earlier in the call they said they planned on rolling much of it forward, but then at the end, in response to the dividend question, they said that they were planning on distributing every last bit of it - sometime. To me, they are saying that the dividend will remain $1.40. In good quarters, the non-distributed income will increase, and in bad it will decrease all to maintain the $1.40 dividend. Of course, that is not what they said, but my interpretation.

    So, despite the gloomy tone of the call, I got the impression that they would not be cutting the dividend.


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