AGNC Investment: Risks Behind High Dividend Yield
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 29 2026
0mins
Should l Buy AGNC?
Source: Fool
- Dividend Yield Analysis: AGNC Investment boasts an 11.98% dividend yield; however, its highly volatile dividends have been trending downward for over a decade, indicating significant risks for income-seeking investors.
- Business Model Insight: As a mortgage REIT, AGNC operates by purchasing mortgages pooled into bond-like securities, which is fundamentally different from traditional property-owning REITs, necessitating a deeper understanding of its investment portfolio for potential investors.
- Investor Suitability: While AGNC's total return since inception has outperformed the S&P 500 ETF, its high volatility and lower capital returns make it unsuitable for dividend-dependent investors, yet appealing for those focused on total return and diversification.
- Investment Decision Advice: For investors looking to cover living expenses through dividends, AGNC may not be the best choice; however, for those prioritizing total return, the current market conditions could present a compelling investment opportunity.
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Analyst Views on AGNC
Wall Street analysts forecast AGNC stock price to rise
10 Analyst Rating
4 Buy
6 Hold
0 Sell
Moderate Buy
Current: 11.310
Low
10.00
Averages
11.71
High
13.00
Current: 11.310
Low
10.00
Averages
11.71
High
13.00
About AGNC
AGNC Investment Corp. is an internally managed real estate investment trust (REIT). The Company provides private capital to the United States housing market, enhancing liquidity in the residential real estate mortgage markets and, in turn, facilitating home ownership in the United States. The Company invests primarily in Agency residential mortgage-backed securities (Agency RMBS) on a leveraged basis. These investments consist of residential mortgage pass-through securities and collateralized mortgage obligations for which the principal and interest payments are guaranteed by a United States Government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac, and together with Fannie Mae, the GSEs), or by a United States Government agency, such as the Government National Mortgage Association (Ginnie Mae). It may also invest in other assets related to the housing, mortgage or real estate markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
High-Yield Stocks Boost Passive Income Potential
- AGNC Investment Returns: With a dividend yield of 12.6%, investing $1,000 in AGNC generates $125.80 in annual income, showcasing its strength in low-risk fixed-income investments, and it is expected to continue paying high dividends.
- Ares Capital Growth Potential: Ares Capital offers a 10% dividend yield, providing $100.30 in annual income from a $1,000 investment, and with a $29.5 billion portfolio and stable earnings, it is likely to maintain its 16-year record of stable dividend payments.
- Western Midstream Cash Flow: With an 8.9% dividend yield, a $1,000 investment in Western Midstream yields $88.60 annually, and last year, its cash flow was sufficient to cover distributions and capital expenditures, indicating future distribution increases.
- Market Appeal: The stable dividend payment records of these three high-yield stocks make them attractive options for investors looking to turn $3,000 into hundreds of dollars in annual passive income, especially in the current market environment.
See More
High-Yield Stocks Maintain Strong Dividend Performance
- AGNC's Stable Dividends: AGNC Investment has maintained its monthly dividend of 12.6% for over five years, with a 16% return on equity in Q4 2022, ensuring sustainability and attracting income-seeking investors.
- Ares Capital's Growth Potential: As the largest business development company, Ares Capital has delivered stable or increasing dividends for over 16 years, with a weighted average yield of 9.3%, and committed $5.8 billion in new investments last quarter, showcasing strong capital growth capabilities.
- Western Midstream's Cash Flow Advantage: Western Midstream Partners generated enough cash flow last year to cover its distributions and capital expenditures, with $95 million in excess free cash flow enhancing financial flexibility, and plans to achieve a 2.2% distribution increase by 2026 to support future payouts.
- Demand for High-Yield Stocks: With the S&P 500's dividend yield at a mere 1.1%, companies like AGNC, Ares, and Western Midstream offer yields above market averages, allowing investors to generate $314.7 in annual passive income from a $3,000 investment, appealing to those seeking high returns.
See More
Robinhood and Royal Caribbean See Active Options Trading
- Robinhood Options Volume: Robinhood Markets Inc saw options trading volume of 153,085 contracts, representing approximately 15.3 million underlying shares, which is about 41.5% of its average daily trading volume of 36.9 million shares over the past month, indicating strong investor interest in the stock.
- High Volume Contracts: Notably, the $80 strike call option expiring on February 20, 2026, has seen 12,436 contracts traded today, equating to approximately 1.2 million underlying shares, suggesting a bullish outlook on Robinhood's future performance.
- Royal Caribbean Options Activity: In parallel, Royal Caribbean Group experienced options trading volume of 10,645 contracts, representing around 1.1 million underlying shares, or about 41.4% of its average daily trading volume of 2.6 million shares over the past month, reflecting active trading in the stock.
- Key Contract Insights: Particularly, the $360 strike call option expiring on March 20, 2026, has seen 4,035 contracts traded today, representing approximately 403,500 underlying shares, indicating investor confidence in Royal Caribbean's growth prospects.
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Comparison of Dividends: AGNC Investment vs Realty Income
- Dividend Yield Volatility: AGNC Investment has maintained a dividend yield above 10% for most of its existence; however, its unreliable nature stems from significant volatility and a long-term downward trend in dividends over the past decade, potentially leading to reduced income and capital for investors.
- Total Return Performance: While AGNC Investment has outperformed the S&P 500 in total return since its IPO in May 2008, relying on dividends for living expenses without reinvestment poses a risk of diminished income for dividend investors.
- Reliability of Realty Income: In contrast, Realty Income has consistently increased its dividend annually for three decades, with an annualized growth rate of approximately 4.2%, slightly above the long-term inflation growth rate, indicating a steady increase in the purchasing power of its dividends over time.
- Diversified Portfolio: Realty Income is recognized for its diversified portfolio and conservative financial strategies; although its 4.9% yield is lower than AGNC Investment's 12.6%, it still offers an attractive income stream compared to other options in the market.
See More
AGNC Investment Starts 2026 Strong with High Dividend Yield
- Stock Performance: AGNC Investment has started 2026 strong, with shares up over 5% year-to-date, which has slightly reduced its dividend yield to 12.7%, still significantly higher than the S&P 500's 1.2% yield.
- Dividend Income: At the current yield, a $500 investment generates $5.28 in monthly dividend income, amounting to an annualized $63.40, showcasing its attractiveness compared to most other assets, although it's lower than a few months ago.
- Dividend Sustainability: AGNC has maintained its dividend payments for over five consecutive years despite interest rate volatility, highlighting its financial stability in the current market environment.
- Investment Environment: The current strong environment for Agency MBS investments positions AGNC well, as it focuses exclusively on these securities, suggesting it can continue generating returns sufficient to cover its capital costs and enhance liquidity for future investments.
See More
Comparing High Dividends of AGNC and Ares Capital
- AGNC Overview: AGNC Investment boasts a monthly dividend yield exceeding 12.5%, significantly higher than the S&P 500's current yield of about 1.1%, indicating its appeal in low-risk fixed-income investments, although its 7.2x leverage ratio could impact dividend stability if market conditions worsen.
- Ares Capital Strength: As the largest BDC, Ares Capital focuses on providing direct loans to middle-market companies, achieving a 9.3% weighted average yield in its portfolio, and has maintained stable or growing dividends for over 16 consecutive years, showcasing its strong balance sheet and liquidity.
- Yield vs. Growth Trade-off: AGNC's higher yield and monthly dividend payments make it an ideal choice for risk-tolerant investors seeking income, while Ares Capital offers greater growth potential through increasing portfolio value and dividends, appealing to those seeking higher total returns.
- Long-term Return Performance: Since its IPO in 2008, AGNC has delivered an average annualized total return of 11.8%, while Ares Capital has provided a 12% annualized total return to investors over the past 20 years, highlighting both companies' stability and attractiveness under varying market conditions.
See More
High-Yield Stocks Boost Passive Income Potential
- AGNC Investment Returns: With a dividend yield of 12.6%, investing $1,000 in AGNC generates $125.80 in annual income, showcasing its strength in low-risk fixed-income investments, and it is expected to continue paying high dividends.
- Ares Capital Growth Potential: Ares Capital offers a 10% dividend yield, providing $100.30 in annual income from a $1,000 investment, and with a $29.5 billion portfolio and stable earnings, it is likely to maintain its 16-year record of stable dividend payments.
- Western Midstream Cash Flow: With an 8.9% dividend yield, a $1,000 investment in Western Midstream yields $88.60 annually, and last year, its cash flow was sufficient to cover distributions and capital expenditures, indicating future distribution increases.
- Market Appeal: The stable dividend payment records of these three high-yield stocks make them attractive options for investors looking to turn $3,000 into hundreds of dollars in annual passive income, especially in the current market environment.
See More
High-Yield Stocks Maintain Strong Dividend Performance
- AGNC's Stable Dividends: AGNC Investment has maintained its monthly dividend of 12.6% for over five years, with a 16% return on equity in Q4 2022, ensuring sustainability and attracting income-seeking investors.
- Ares Capital's Growth Potential: As the largest business development company, Ares Capital has delivered stable or increasing dividends for over 16 years, with a weighted average yield of 9.3%, and committed $5.8 billion in new investments last quarter, showcasing strong capital growth capabilities.
- Western Midstream's Cash Flow Advantage: Western Midstream Partners generated enough cash flow last year to cover its distributions and capital expenditures, with $95 million in excess free cash flow enhancing financial flexibility, and plans to achieve a 2.2% distribution increase by 2026 to support future payouts.
- Demand for High-Yield Stocks: With the S&P 500's dividend yield at a mere 1.1%, companies like AGNC, Ares, and Western Midstream offer yields above market averages, allowing investors to generate $314.7 in annual passive income from a $3,000 investment, appealing to those seeking high returns.
See More
Robinhood and Royal Caribbean See Active Options Trading
- Robinhood Options Volume: Robinhood Markets Inc saw options trading volume of 153,085 contracts, representing approximately 15.3 million underlying shares, which is about 41.5% of its average daily trading volume of 36.9 million shares over the past month, indicating strong investor interest in the stock.
- High Volume Contracts: Notably, the $80 strike call option expiring on February 20, 2026, has seen 12,436 contracts traded today, equating to approximately 1.2 million underlying shares, suggesting a bullish outlook on Robinhood's future performance.
- Royal Caribbean Options Activity: In parallel, Royal Caribbean Group experienced options trading volume of 10,645 contracts, representing around 1.1 million underlying shares, or about 41.4% of its average daily trading volume of 2.6 million shares over the past month, reflecting active trading in the stock.
- Key Contract Insights: Particularly, the $360 strike call option expiring on March 20, 2026, has seen 4,035 contracts traded today, representing approximately 403,500 underlying shares, indicating investor confidence in Royal Caribbean's growth prospects.
See More
Comparison of Dividends: AGNC Investment vs Realty Income
- Dividend Yield Volatility: AGNC Investment has maintained a dividend yield above 10% for most of its existence; however, its unreliable nature stems from significant volatility and a long-term downward trend in dividends over the past decade, potentially leading to reduced income and capital for investors.
- Total Return Performance: While AGNC Investment has outperformed the S&P 500 in total return since its IPO in May 2008, relying on dividends for living expenses without reinvestment poses a risk of diminished income for dividend investors.
- Reliability of Realty Income: In contrast, Realty Income has consistently increased its dividend annually for three decades, with an annualized growth rate of approximately 4.2%, slightly above the long-term inflation growth rate, indicating a steady increase in the purchasing power of its dividends over time.
- Diversified Portfolio: Realty Income is recognized for its diversified portfolio and conservative financial strategies; although its 4.9% yield is lower than AGNC Investment's 12.6%, it still offers an attractive income stream compared to other options in the market.
See More
AGNC Investment Starts 2026 Strong with High Dividend Yield
- Stock Performance: AGNC Investment has started 2026 strong, with shares up over 5% year-to-date, which has slightly reduced its dividend yield to 12.7%, still significantly higher than the S&P 500's 1.2% yield.
- Dividend Income: At the current yield, a $500 investment generates $5.28 in monthly dividend income, amounting to an annualized $63.40, showcasing its attractiveness compared to most other assets, although it's lower than a few months ago.
- Dividend Sustainability: AGNC has maintained its dividend payments for over five consecutive years despite interest rate volatility, highlighting its financial stability in the current market environment.
- Investment Environment: The current strong environment for Agency MBS investments positions AGNC well, as it focuses exclusively on these securities, suggesting it can continue generating returns sufficient to cover its capital costs and enhance liquidity for future investments.
See More
Comparing High Dividends of AGNC and Ares Capital
- AGNC Overview: AGNC Investment boasts a monthly dividend yield exceeding 12.5%, significantly higher than the S&P 500's current yield of about 1.1%, indicating its appeal in low-risk fixed-income investments, although its 7.2x leverage ratio could impact dividend stability if market conditions worsen.
- Ares Capital Strength: As the largest BDC, Ares Capital focuses on providing direct loans to middle-market companies, achieving a 9.3% weighted average yield in its portfolio, and has maintained stable or growing dividends for over 16 consecutive years, showcasing its strong balance sheet and liquidity.
- Yield vs. Growth Trade-off: AGNC's higher yield and monthly dividend payments make it an ideal choice for risk-tolerant investors seeking income, while Ares Capital offers greater growth potential through increasing portfolio value and dividends, appealing to those seeking higher total returns.
- Long-term Return Performance: Since its IPO in 2008, AGNC has delivered an average annualized total return of 11.8%, while Ares Capital has provided a 12% annualized total return to investors over the past 20 years, highlighting both companies' stability and attractiveness under varying market conditions.
See More
