Does AGNC Investment's 13.2% Dividend Yield Look Sustainable?

One of the most closely watched aspects of AGNC Investment Corp.’s AGNC financial profile is its dividend policy. This publicly traded mortgage real estate investment trust (mREIT) offers attractive long-term returns and a high dividend yield that appeals to income-focused investors.

Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income as dividends.  AGNC has a record of paying out monthly dividends, currently yielding a staggering 13.2%. This is impressive and attracts investors as it represents a steady income stream.

Dividend Yield

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Dividends aside, AGNC has a share repurchase plan in place.  In October 2024, the company’s board of directors terminated the existing stock repurchase plan and replaced it with a new plan authorizing it to repurchase up to $1 billion of common stock through Dec. 31, 2026. As of March 31, 2026, the full authorization was available for repurchase. It plans to buy back shares only when the repurchase price is lower than the then-current estimate of tangible net book value per common share. The buyback program will enable it to respond to the volatility in its stock and boost shareholders’ wealth.

The company enjoys a decent financial position. As of June 30, 2026, AGNC Investment’s liquidity, including unencumbered cash and Agency MBS, was $7.5 billion. The company’s leverage rose modestly to 7.4X at the end of the second quarter 2026.

With relatively lower mortgage rates, operational and funding pressures may ease, expanding net interest spreads. This could boost AGNC Investment's profitability and enhance its ability to maintain, or even increase, its dividend in the near term.

How AGNC Competes With NLY & ABR in Terms of Dividends

AGNC Investment’s peers, such as Annaly Capital Management, Inc. NLY and Arbor Realty Trust, Inc. ABR, have also been focusing on maintaining shareholder returns through consistent dividend payouts.

Annaly’s dividend yield is currently a staggering 13.1%. In the past five years, Annaly has increased its dividends twice. At June 30, 2026, it had $9.6 billion in assets available for financing, including $5.5 billion in cash and unencumbered Agency MBS. A solid liquidity position supports Annaly's capital distribution in the future.

Alternatively, Arbor Realty has a dividend yield of 12.7%. In the past five years, ABR has raised its dividend eight times. As of June 30, 2026, Arbor Realty had cash and cash equivalents of $583 million against long-term debt of $5.2 billion. Such a narrow liquidity cushion raises concerns about the sustainability of its capital distribution in the long term.

AGNC Investment’s Price Performance & Zacks Rank

Over the past year, AGNC shares have gained 12.8% against the industry’s decline of 2.8%.

Price Performance

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The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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