This week I bought 91 shares AGNC Investment Corp at a price of $17,60. AGNC is a mortgage REIT. AGNC is an internally-managed mortgage REIT which is predominantly investing in agency mortgage-backed securities.
AGNC Investment Corp is currently paying a monthly dividend of $0,18. On a yearly basis the yield is 12,3%. As a result of the 91 shares I purchased, my yearly estimated dividend income increased by $196,56.
Mortage REIT’s are a very specific investment category. Mortage REIT’s provide financing for real estate by purchasing or originating mortgages and mortgage-backed securities. mReit’s are basically earning their income by the difference between the interest they receive on the mortages or mortage-backed securities they own and the interest they pay on their loans.
Mortgage REITs often attract short term loans against a low interest rate to originate long term mortgages or buy long term mortgage-back securities. As a result mREIT’s are extremely sensitive to interest rate increases, because this will reduce the spread between the interest they receive and pay.
I own shares in REIT’s in various categories. Already for a long term I have AGNC investment corp on my watchlist to also have exposure to the mortgage REIT category.
I have to say that I consider it difficult to understand a company like AGNC. Normally when I read the annual report or other presentations of the company it’s rather easy to get an idea about what a company is doing from the brands they own, the products they produce or the list of properties they own.
In the annual report of AGNC is a list with the duration and interest rates of their assets, but I consider it difficult to see in this what the MOAT is of a mortgage REIT. AGNC is mainly investing in securities backed by single-family residential mortgages and collateralized mortgage obligations guaranteed by government agencies Fannie Mae, Freddie Mac, and Ginnie Mae. For this reason and their monthly payments I decided to add AGNC Investment Corp as mREIT to my portfolio.
I will enjoy their monthly payments, but I don’t expect any capital appreciation from this investment. Also I realize that rising interest rates will mean a dividend cut. To keep a balanced portfolio I will probably add another mREIT, but I doubt these will ever be among my biggest positions as mREIT’s are able to often bring high yields, but also volatile yields.
Amsterdam Commodities (Acomo) announced a decrease of their final dividend from €0,70 to €0,60. As a result my yearly estimated dividend income is decreasing by €4,50.
The full year dividend is now €1,00 instead of €1,10.
The net profit declined from €32.5 to €31.1 mainly due to the increase of declining commodities prices.
Yield on cost will now be 3,94%. This is the first dividend decrease this year. I keep Acomo in my portfolio as the change in net profit is modest. Nevertheless I will be cautious with the next profit report to monitor if I need to change my position from ‘hold’ to sell.
In January I received €140,32 in dividend payments. Previous year in January I received €42,43 so my dividend income is up 231%.
The first month of the year is never a big dividend income month for me. Actually normally January is the lowest dividend income month for me, but this year probably February will be the lowest month, because I expect €123,86 next month.
This month I received payments from 7 companies. Dividend payments from Wereldhave, Altria and Coresite Realty are responsible for over 50% of my income this month.