Is American Capital Agency Corp. (AGNC) Making All the Right Moves?

Invesco notes that it has recently moved into lower-coupon paper, where borrowers are less apt to prepay their loans. This has resulted in about 90% of the company’s agency portfolio being prepayment protected. American Capital Agency has taken a similar tack and has been scarfing up the types of low loan balance mortgages that are less apt to be refinanced, and thus paid off early. In addition, the company has stocked up on loans refinanced via the Home Affordable Refinance Program.

In addition to all of these prescient moves — or, perhaps because of them — American Capital Agency has also been able to bestow upon its investors a juicy dividend of $5.00 per share, annualized. From the looks of this earnings report, I don’t see that ending any time soon.

The article Is American Capital Agency Making All the Right Moves? originally appeared on Fool.com and is written by Amanda Alix.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool owns shares of Annaly Capital Management.

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