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American Capital Agency Corp. Message Board

  • jhgrsrch jhgrsrch May 14, 2013 8:21 AM Flag

    Will AGNC have to lower dividends??

    If so, that is when I want to buy. If they need to do this, they should go ahead and do it sooner rather than later. I currently own NLY and HTS.

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    • Unknown at this time. Looking at cashflow and TBD plus 'earned but not paid out' my guess is no cuts to the dividend until Q4 at the earliest. A decent quarter or two would be nice at this point.


    • I think AGNC will try their best to generate the taxable income that justifies the existing dividend of $1.25 per quarter. Stable performance leads to a greater stock price, which enables equity capital to be raised more easily. Growing the company, which leads to a greater management fee, is management's objective. Since a stable dividend is consistent with their primary objective, I believe RMBS and TBAs will be bought and sold to maintain taxable income and the dividend.

      AGNC may already have dumped some of the TBAs during the run up in price during April. That would easily have provided the taxable income they need. If they haven't traded any of the TBAs yet, they will probably have a second opportunity to do so before the end of June.

    • I have a 1,200 AGNC position. I think they have two options in regard to the next dividend. Either they can do another SPO (as they use to do) or they have to reduce the dividend. I expect a reduction to $ 4,00 ($ 1,00 per Q)

22.06+0.18(+0.82%)Jan 26 4:00 PMEST

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