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American Capital Agency Corp. Message Board

  • jing_sun01 jing_sun01 Feb 7, 2013 4:30 PM Flag

    $1.25 Divi is Safe for 2013!!!


    With $1.96 taxable income from Q4 earning, or $1.76 has to be distributed, plus the $2.16 undistributed funds in hand, I can easily see that the $1.25 qtrly divi will be safe at least for the rest of the 2013. Now that the interest spread is getting wider, I see earnings to go higher from here. So, if AGNC can diliver a similar taxable income of $1.90 or higher every qtr in 2013, I can see the divi to not only be safe at $1.25, perhaps even go back up to $1.40 in year 2014.

    I for one has held my 2000sh of AGNC shares, not options, for the past 3 years, and am planning to hold them for many years to come. In addition to that, with the optimism for the whole mREITS group, I actually bought 3000sh of MORL (2x Bull) as well. So far, both shares have been paying great divi for me!

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    • I agree. Looking at these numbers, I agree.

    • 2012 income was $6.87, so the div should have been at least .9*6.87 = 6.18, or 1.54 per quarter instead of 1.25.

      And there was .80 of undistributed income at the end of 2011. So if any of that was over the 10% retainable limit, then it should have been paid in the div as well.

      So for 2012, the div was a good 30 cents short each quarter.

      And, right now, there's no reason to believe Q1 and Q2 won't be the same. And if the economy starts to heat up, and the Fed sticks to its low-rate promise, spreads will only get bigger...

      So why on earth wouldn't they increase the div, by up to 30 cents?

    • I agree. Undistributed taxable income of 2.18 per share is AFTER deducting the 1.25 dividend paid in Jan 2013. They have until they file their 2012 tax return in September to pay out the 2.18 to avoid paying income taxes for 2012 undistributed. So, April and August must equal or exceed 2.18 to pay no income taxes for 2012. This from press release:

      "The Company had approximately $740 million of estimated undistributed taxable income as of December 31, 2012, or $2.18 per common share, after adjusting for the fourth quarter common and preferred dividends declared, but without adjustment for future quarterly dividends not yet declared on the Company's Series A Preferred Stock."

      Plus we get almost half a buck of 2012 dividends as a long term capital gain. That eases the tax bill, at least for me.

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