Published on October 20th, 2025 by Felix Martinez
High-yield stocks pay out dividends that are significantly more than the market average dividends. For example, the S&P 500’s current yield is only ~1.2%.
High-yield stocks can be very helpful to shore up income after retirement. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.
AGNC Investment Corporation (AGNC) is part of our ‘High Dividend 50’ series, which covers the 50 highest-yielding stocks in the Sure Analysis Research Database.
We have created a spreadsheet of stocks (and closely related REITs and MLPs, etc.) with dividend yields of 5% or more…
You can download your free full list of all securities with 5%+ yields (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:
Next on our list of high-dividend stocks to review is AGNC Investment Corporation (AGNC).
Business Overview
Source: Investor Relations
The trust employs significant amounts of leverage to invest in these securities, boosting its ability to generate interest income. AGNC borrows primarily on a collateralized basis through securities structured as repurchase agreements.
The trust’s goal is to build value via monthly dividends and net asset value accretion. AGNC has done well with its dividends over time, but net asset value creation has sometimes proven elusive.
The company reported a strong third quarter for 2025, with comprehensive income of $0.78 per common share, including $0.72 in net income and $0.06 in other comprehensive income. Net spread and dollar roll income came in at $0.35 per share, excluding a small catch-up premium amortization cost. Tangible net book value rose to $8.28 per share, up 6% from the prior quarter, while dividends of $0.36 per share were declared, contributing to an economic return on tangible common equity of 10.6%.
The company’s investment portfolio totaled $90.8 billion, primarily consisting of Agency mortgage-backed securities ($76.3 billion) and net TBA positions ($13.8 billion), with credit risk transfer and non-Agency investments making up the remainder. AGNC maintained disciplined leverage at 7.6x “at risk” tangible net book value, while unencumbered cash and Agency MBS reached $7.2 billion, providing liquidity equal to 66% of tangible equity. The average projected CPR of 8.6% and an annualized net interest spread of 1.78% reflected stable portfolio performance in the quarter.
Management highlighted a favorable investment environment driven by easing Fed policy and strong Agency MBS demand. Capital markets activity included $309 million in net proceeds from common stock ATM offerings and a $345 million Series H preferred stock issuance. Hedging strategies remained robust, with interest rate swaps covering a significant portion of funding liabilities, and AGNC’s net short U.S. Treasury exposure was $16.7 billion. Overall, the company is positioned to deliver attractive risk-adjusted returns while maintaining strong liquidity and disciplined leverage.
Source: Investor Relations
Growth Prospects
The main challenge for mortgage REITs like AGNC is that rising interest rates can pressure their business model. AGNC earns by borrowing at short-term rates, lending at long-term rates, and capturing the spread. These REITs are also highly leveraged—AGNC currently carries a 7.5x leverage ratio—because spreads on mortgage securities are generally tight.
When interest rates rise, the value of mortgage REIT investments often falls. Fixed payments on their assets can lag behind variable borrowing costs, compressing interest margins. Last year, global central banks aggressively raised rates to curb inflation, pushing U.S. rates to 23-year highs and causing AGNC’s book value to decline in recent quarters. Consequently, the REIT’s high payout ratio and volatile model may limit earnings-per-share growth, and dividend increases are likely to remain modest in the near term.
On the upside, inflation has eased in many developed economies, including the U.S. The Fed has begun lowering rates, with guidance suggesting a drop from 4.75%-5.0% to 2.75%-3.0% by 2026. If this unfolds as expected, AGNC could benefit from lower borrowing costs and wider interest margins, providing a favorable boost to its business.
Competitive Advantages & Recession Performance
Dividend Analysis
AGNC has declared monthly dividends of $0.12 per share since April 2020. This means that AGNC has an annualized payout of $1.44 per share, which equals an extremely high current yield of 14.4% based on the current share price.
Source: Investor Presentation
High yields often signal elevated risk, and AGNC’s dividend is no exception. The company has reduced its payout several times over the past decade.
A near-term dividend cut appears unlikely, as the recent adjustment accounted for unfavorable interest rate changes, and AGNC’s net asset value has stabilized. Management has acted to protect interest income, and anticipated Fed rate cuts over the next few years should provide additional support. The payout ratio is expected to remain below 90% of earnings in 2025, reducing the immediate need for another cut.
That said, mortgage REITs inherently carry payout risk. Investors should remain aware of this, particularly given the volatility in interest rates in recent years.
Final Thoughts
High-yield, monthly dividend stocks can be very appealing to income investors, especially in a low-interest-rate environment where alternative income sources offer much lower returns.
AGNC currently offers a substantial 14.4% yield, which is exceptionally high. While we believe this yield is sustainable in the near term, the company’s business model and sensitivity to interest rates make it far from a low-risk investment.
Although AGNC’s dividend yield remains well above the S&P 500 average, it is not well-suited for conservative, risk-averse income investors.
High-Yield Individual Security Research
- 20 Highest Yielding Monthly Dividend Stocks
- 10 Super High Dividend REITs
- 5 Highest Yielding Royalty Trusts
Other Sure Dividend Resources
- Dividend Kings: 50+ years of rising dividends
- Dividend Champions: 25+ years of rising dividends
- Dividend Aristocrats: 25+ years of rising dividends and in the S&P 500
- Dividend Achievers: 10+ years of rising dividends and in the NASDAQ
- High Dividend Stocks: 5%+ dividend yields
- Monthly Dividend Stocks: Individual securities that pay out every month
- MLPs: List of MLPs and more
- REITs: List of REITs and more
- BDCs: List of BDCs and more