Are Mortgage REITs Income Machines or Capital Destroyers? Here's How to Tell the Difference.
AGNC Investment has a 12% dividend yield, but its dividend has been trending lower for over a decade.
Overview
It might seem shocking, but AGNC Investment (NASDAQ: AGNC) has a 12% dividend yield. In fact, if you look back at the stock's history, the yield has been above 10% for most of the company's public existence. Given that investors generally expect a 10% return over time from the market, AGNC Investment's yield looks almost too good to be true. And it could be, depending on how you use it. Here's what you need to know before you buy AGNC Investment or any other mortgage real estate investment trust (REIT).
AGNC Investment is a well-respected mREIT. In fact, if you look back at the history here, the stock has provided pretty impressive total returns. Since its initial public offering, its total return is a hair better than that of the S&P 500 index (SNPINDEX: ^GSPC). Beating the S&P 500 is no small feat, but total return requires reinvesting dividends.
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Originally published at www.fool.com.