American Capital Agency Corp.
) continued to repurchase its outstanding shares in the fourth
quarter. In particular, the company bought back approximately
28.2 million shares of its common stock, representing 7% of its
outstanding shares as of Sep 30, 2013, for around $586 million
through open market purchases.
With this, around 43.0 million shares have been bought back
for approximately $934 million, including expenses, since the
beginning of the buyback program in the fourth quarter of 2012.
In addition, American Capital Agency declared a dividend of 65
cents per share for fourth-quarter 2013. This dividend will be
paid on Jan 28, 2014, to shareholders of record as of Dec 31,
This news of a continuation of the dividend at the prior rate
and share repurchase comes at a time when a number of mortgage
REITs (mREITs) are coming up with a dividend cut. Among these are
Anworth Mortgage Asset Corp.
Hatteras Financial Corp.
), which slashed their dividend rates recently by 33.3% (to 8
cents) and 9.1% (to 50 cents per share), respectively.
The volatility in the interest rates and mortgage spreads
continued to affect the results of mortgage real estate
investment trust (commonly known as mREIT) and their book values.
Finally, the Federal Reserve has disclosed the tapering of its QE
bond buying program following a consistent improvement in the
economic activity and labor market conditions.
Fed will now buy $75 billion in assets every month (MBS
purchases of $35 billion and Treasury bonds at $40 billion), down
from the current rate of $85 billion a month. However, a low rate
is expected to continue for an extended period even if the
tapering comes in full in 2014.
American Capital Agency currently carries a Zacks Rank #5
(Strong Sell). However, investors interested in the mREIT
industry may consider stocks like
Apollo Commercial Real Estate Finance, Inc.
) that currently has a Zacks Rank #2 (Buy).
AMER CAP AGENCY (AGNC): Free Stock Analysis
ANWORTH MTGE (ANH): Free Stock Analysis
APOLLO COMMERCL (ARI): Free Stock Analysis
HATTERAS FIN CP (HTS): Free Stock Analysis
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