AGNC Investment Could Turn $1,000 Into Decades of Monthly Passive Income
The high-yielding mREIT pays a high yield but comes with some hidden risks.
Overview
AGNC (NASDAQ: AGNC), one of the world's largest mortgage real estate investment trusts (mREITs), pays a massive forward dividend yield of 13.6%. Should investors put $1,000 into this stock to generate decades of monthly passive income, or does it come with some hidden risks?
AGNC purchases mortgages and mortgage-backed securities (MBS), collects interest from those investments, and pays out at least 90% of its taxable income as dividends to maintain a lower tax rate. It allocates 89% of its $97.2 billion portfolio to Agency MBS assets (backed by Fannie Mae, Freddie Mac, or Ginnie Mae) to protect itself from another housing market crash.
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Originally published at www.fool.com.