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Stop Being Stubborn: Hunting For Dividends In AGNC's Preferred Share

Published Wed, 17 Apr 2019 06:15:00 -0400 on Seeking Alpha

There are a few ways to miss out when looking at preferred shares. One way is to pass on a very attractive security because investors refuse to own anything at a price higher than par value.

If investors absolutely refuse to pay $25.01, they will pass on several great investment opportunities. Rather than treating all securities that trade above par value as being useless for investing, investors should be prepared to amortize the premium over the life of the security.
Being stubborn does not change the facts.
AGNC Investment Corp.
We cover AGNC Investment Corp. (AGNC) occasionally, but we find their preferred shares are far more interesting for investing. The preferred shares carry a lower yield but offer a much more stable price. We recently suggested AGNCB (AGNCB) as a solid choice. Since that rating, the yield to call turned negative as shares went ex-dividend.
Our current (as of 04/09/2019) outlook on AGNCB is shown below:

When we highlighted AGNCB for investors, shares were trading at $25.49. However, they were about to go ex-dividend for $.48. The result was investors would have an effective cost of only $25.01 thanks to the dividend.
These differences may appear minor, but they are an important part of mitigating call risks. When the yield to call is positive, AGNCB is generally a good investment. When it turns negative, the shares become less appealing. A slightly negative yield to call can still be worth the risk, but the potential... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ANNALY CAPITAL MANAGEMENT 9.26   0.0 -1.59 1.20 12.82

ANNALY CAPITAL MANAGEMENT - NLY
ANNALY CAPITAL MANAGEMENT - NLY  


Older articles featuring Annaly Capital Management (NLY):
Don't Miss Out On This 6.85% Dividend Yield From AGNC Preferred Share
IShares Mortgage Real Estate ETF Has The Highest REIT Yield, But The Lowest Performance
3 “Cash Cow” Dividend Stocks Yielding Up to 21%
My Dividend Growth Portfolio April Update: 42 Holdings, 6 Buys, 5 New Holdings And 1 Called Away
Annaly Capital Management: Take A Look At This 6.8%-Yielding Preferred Stock
My K.I.S.S. Dividend Growth Portfolio: 1st Quarter 2019 Update
2019 First Quarter Update, 10% High Yield Stocks Massive-Recovery
Buy Rating For This 7.73% Yield From AGNC Investment Corp.'s Preferred Share
Is Orchid Island Capital's Current Dividend Safe? (Includes 2019 Monthly Dividend Projections)
5 High Yields: Even The Best Mortgage REITs Rallied Outside The Buy Range

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