AGNC Stock Recent News

U.S. equity markets extended gains to a fourth-straight week despite a resurgence in benchmark interest rates after a critical slate of employment data showed surprisingly strong labor market trends. One of several strong employment reports, Nonfarm Payrolls data showed that the U.S. economy added 254k jobs in September - the strongest in six months and well above consensus estimates. Combined with a nearly 10% surge in crude oil prices driven by renewed Middle East tensions, markets reflected a significantly less aggressive Fed rate cut path in the months ahead.

Investing in AGNC Investment offers a high dividend yield of 14%, but this comes with significant risks, including interest rate, default, pre-payment, and liquidity risks. AGNC's elevated yield is largely a return of investor capital. Investors should be cautious of high-yield investments, as they often result in lower risk-adjusted returns and significant principal losses during market downturns.

With interest rates set to fall over the next year, these three stocks could be smart buys today.

The mortgage REIT offers a prodigious dividend yield.

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24/7 Wall St. Insights Companies that pay ultra-high-yield dividends are perfect for those seeking passive income.

AGNCN offers a floating rate yield of about 10.3%, but future dividends should be lower due to the recent cut by the Federal Reserve. AGNCO is a better deal than AGNCN, with a similar floating spread and a lower stripped price, reducing call risk and simply offering more cash in the pocket. The primary risk factor for AGNC's preferred shares is the path of future interest rates. Recession fears can become relevant if they're significant.

I frequently discuss high-yield sectors like mortgage REITs, BDCs, and preferred shares, emphasizing the importance of knowing when not to buy. Preferred shares have rallied above targets, reducing buying opportunities, while common shares offer higher risks. Some offer upside, but others mostly offer downside. I'll kick off the weekend by highlighting one with a high valuation, as investors pay top dollar for earnings that are about to melt away.

During times of turbulence and uncertainty in the markets, many investors turn to dividend-yielding stocks. These are often companies that have high free cash flows and reward shareholders with a high dividend payout.

Mortgage REITs struggled the past few years to manage a rate-hike cycle and widening MBS-to-Treasury spreads. The sector is set to rebound with the Fed potentially cutting rates this week and spreads possibly tightening.