Although AGNC Investment (currently trading at $9.88 per share) has gained 14.1% over the last six months, it has trailed the S&P 500’s 33.2% return during that period. This was partly due to its softer quarterly results and might have investors contemplating their next move.
Is now the time to buy AGNC Investment, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free for active Edge members.
Why Do We Think AGNC Investment Will Underperform?
We're cautious about AGNC Investment. Here are three reasons why AGNC doesn't excite us and a stock we'd rather own.
1. Declining Net Interest Income Reflects Weakness
Net interest income commands greater market attention due to its reliability and consistency, whereas one-time fees are often seen as lower-quality revenue that lacks the same dependable characteristics.
AGNC Investment’s net interest income has declined by 28.5% annually over the last five years, much worse than the broader banking industry. This shows that lending underperformed its other business lines.
2. EPS Trending Down
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Sadly for AGNC Investment, its EPS declined by 7.1% annually over the last five years while its revenue grew by 16.6%. This tells us the company became less profitable on a per-share basis as it expanded.
3. Declining TBVPS Reflects Erosion of Asset Value
For banks, tangible book value per share (TBVPS) is a crucial metric that measures the actual value of shareholders’ equity, stripping out goodwill and other intangible assets that may not be recoverable in a worst-case scenario.
Disappointingly for investors, AGNC Investment’s TBVPS declined at a 8.9% annual clip over the last two years.
Final Judgment
AGNC Investment falls short of our quality standards. With its shares underperforming the market lately, the stock trades at 1.1× forward P/B (or $9.88 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. Let us point you toward our favorite semiconductor picks and shovels play.
Stocks We Would Buy Instead of AGNC Investment
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
