Warning – AGNC dividend payout ratio might exceed 115%

Warning – AGNC dividend payout ratio might exceed 115% for 4Q2010.

AGNC’s last quarterly dividend was $1.40 per share.  They announced in December that they would pay a $1.40 dividend for 4Q2010.  They have paid $1.40 per share since 3Q2009.  However, AGNC disclosed on January 12th, 2011 that it expects to earn at least $1.20 in 4Q2010.  That isn’t enough to cover the dividend.  I wrote about this on December 17th, 2010.

http://bit.ly/how-much-longer

Their dividend payout ratio will rise above 100%.  That is a warning to high dividend stock investors that a cut to the dividend in coming in future quarters unless something changes that course.  A $1.40 divided by $1.20 equals a dividend payout ratio of 116%.  Yikes!  If the unnamed analysts are correct, then the payout ratio will be 108.5% for 4Q2010.  Factor this into your investment plans if you own AGNC.

Disclosure: I don’t own AGNC shares.

American Capital Agency Corp. Issues Q4 2010 EPS Guidance In Line With Analysts’ Estimates
Wednesday, 12 Jan 2011 04:08pm EST 

American Capital Agency Corp. announced that for the fourth quarter of 2010, it expects earnings per share (EPS) to exceed $1.20, including an anticipated benefit from slower projected prepayment speeds. According to Reuters Estimates, analysts are expecting the Company to report EPS of $1.29 for the fourth quarter of 2010. 

http://www.reuters.com/finance/stocks/keyDevelopments?rpc=66&symbol=AGNC.O&timestamp=20110113225400

Be seeing you!

Advertisements
Published in: on January 14, 2011 at 1:30 pm  Leave a Comment  

The URI to TrackBack this entry is: https://myhighdividendstocks.wordpress.com/2011/01/14/warning-agnc-dividend-payout-ratio-might-exceed-115/trackback/

RSS feed for comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: