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.
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×tamp=20110113225400
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