Analyzing American Capital Agency Corp. (AGNC) and AG Mortgage Investment Trust (MITT)

American Capital Agency Corp. (NASDAQ: AGNC) and AG Mortgage Investment Trust (NYSE:MITT) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, institutional ownership, risk and analyst recommendations.

Dividends

American Capital Agency Corp. pays an annual dividend of $2.16 per share and has a dividend yield of 10.1%. AG Mortgage Investment Trust pays an annual dividend of $1.90 per share and has a dividend yield of 9.8%. American Capital Agency Corp. pays out 44.6% of its earnings in the form of a dividend. AG Mortgage Investment Trust pays out 58.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Capital Agency Corp. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares American Capital Agency Corp. and AG Mortgage Investment Trust’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Capital Agency Corp. 161.49% 12.08% 1.55%
AG Mortgage Investment Trust 85.21% 11.97% 2.12%

Earnings & Valuation

This table compares American Capital Agency Corp. and AG Mortgage Investment Trust’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Capital Agency Corp. N/A N/A N/A $4.84 4.43
AG Mortgage Investment Trust $119.69 million 4.50 $89.88 million $3.23 5.99

AG Mortgage Investment Trust has higher revenue and earnings than American Capital Agency Corp.. American Capital Agency Corp. is trading at a lower price-to-earnings ratio than AG Mortgage Investment Trust, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for American Capital Agency Corp. and AG Mortgage Investment Trust, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Capital Agency Corp. 1 5 2 0 2.13
AG Mortgage Investment Trust 0 3 0 0 2.00

American Capital Agency Corp. presently has a consensus price target of $19.68, indicating a potential downside of 8.17%. AG Mortgage Investment Trust has a consensus price target of $18.17, indicating a potential downside of 6.07%. Given AG Mortgage Investment Trust’s higher probable upside, analysts plainly believe AG Mortgage Investment Trust is more favorable than American Capital Agency Corp..

Institutional & Insider Ownership

55.8% of American Capital Agency Corp. shares are held by institutional investors. Comparatively, 66.6% of AG Mortgage Investment Trust shares are held by institutional investors. 0.5% of American Capital Agency Corp. shares are held by company insiders. Comparatively, 1.6% of AG Mortgage Investment Trust shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

American Capital Agency Corp. has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, AG Mortgage Investment Trust has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

About American Capital Agency Corp.

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

About AG Mortgage Investment Trust

AG Mortgage Investment Trust, Inc. is a real estate investment trust (REIT). The Company focuses on investing in, acquiring and managing a diversified portfolio of residential mortgage assets, other real estate-related securities and financial assets, which the Company refers to as its target assets. It also focuses on investing in residential mortgage-backed securities (RMBS) issued or guaranteed by a government-sponsored enterprise, such as The Federal National Mortgage Association (Fannie Mae) or The Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, GSEs), or any agency of the United States Government, such as The Government National Mortgage Association (Ginnie Mae) (collectively Agency RMBS), and other real estate-related securities and financial assets, including Non-Agency RMBS, asset backed securities (ABS), commercial mortgage-backed securities (CMBS) and loans.

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