Why I Recommend A "Hold" On American Capital Agency's 16.1% Yield
By Todd Johnson:My favorite dividend stock is American Capital Agency (AGNC). The stock's core attributes are its peer outperformance and management's openness to shareholders. At the present time, however, the stock is overvalued and should be held and not bought. American Capital Agency offers shareholders a 16.1% annual dividend yield. I'll highlight why the stock is a hold at this time.
Background
American Capital Agency Corporation is a mortgage real estate investment trust (mREIT) that was formed in January 2008 under the sponsorship of American Capital, Ltd. (ACAS). American Capital Agency is externally managed by an affiliate of American Capital and leverages American Capital's expertise, industry contacts, capital raising capabilities, financial reporting systems, infrastructure and legal resources as needed, thereby reducing its own overhead expenses.American Capital Agency focuses purely on agency residential mortgage backed securities (RMBS) where principal and interest payments are guaranteed by U.S. government agencies (such as Government NationalComplete Story »
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