Why This 13% Yield Is Better Than Its 19% Yielding Peer

Why This 13% Yield Is Better Than Its 19% Yielding Peer

AGNC leverages its ~27% premium to book value via its ATM program, issuing new equity above net asset value, making every new share accretive to existing investors. IVR issued over 36 million shares below book value, permanently diluting book value per share. IVR's eye-popping ~19% yield is largely due to shrinking book value and falling share price; AGNC's ~13% yield is backed by expanding net spread income and a growing asset base. Avoid reaching for the highest nominal yield when it is fueled by dilutive capital raises; accumulate AGNC to secure high, durable cash flow supported by smart capital management.