a/ $1.25 Q4 dividend $0.36 Q4 comprehensive income
b/ $2.18 per share undistributed taxable income at Dec 31 is not a part of shareholders equity/book value
c/ The following page on book value rollover from their Q4 presentation
(In millions, except per share data)
Sept 30, 2012 Net Common Equity (1) $11,100 341.6 $32.49
Net Income 810
Other Comprehensive Loss (684)
Dividend on Common Stock (424)
Dividend on Preferred Stock (3)
Balance before Capital Transactions 10,798 341.6 $31.61
Repurchase of Common Stock (77) (2.7) $29.00
Dec 31, 2012 Net Common Equity $10,722 338.9 $31.64
When the earnings aren't there the dividend payment has to come from somewhere.
MBS's got more expensive last quarter? Not compared to Sept 30 market values they didn't. They fell. And they are falling even more significantly in Q1. Last I checked falling MBS prices lowers the BV.
With respect to the SPO, my take is that AGNC management saw that falling MBS prices were not being reflected in the PPS. When the premium over BV got significant they went ahead with the SPO. So it all comes down to what you think the current BV is. Given the brutal week for MBS prices and news that they are maintaining their dividends through their reserves, I believe BV is currently in the $30 and lower range. Hence the concern over the drop after EX. What is your guess at BV Doc?
MBS prices are getting killed this quarter. Look for BV dropping and even more SPOs. Add that to the fact that AGNC dug into its BV to maintain the dividend and this thing could drop big time after EX. Thoughts?
That part is good. I can't say I really like earnings going from 30 cents to 19 cents though. I guess we'll see what they say tomorrow. That would be a pretty big div cut given it was 27 cents last quarter.
Earnings set to be released Tuesday after close. Watch for the book value as this stock appears to be trading well above it. Sept 30 BV was $6.52 and one would guess it drops in Q4. Wednesday should be interesting.
Help me out on this one because I am trying to see what AGNC management is looking at with respect to book value. ARR has a similar long duration low coupon portfolio and the BV dropped 7.8% from Dec 31 to Feb 12. Apply that to the $31.64 Dec 31 BV for AGNC and you get $29.17 at Feb 12 which was a low for MBS. They have come back a bit so say the current BV is $29.50 to $30 range. My take is it was trading around 10% over BV when they went for the SPO. Unfortunately this means it has a ways to drop. Thoughts?