American Capital Agency (AGNC) Dividend Cut Viewed as 'Derisking'

Yesterday American Capital Agency Corp. (NASDAQ: AGNC) declared a quarterly dividend of $1.05 per share. This is a 16% decrease from the prior dividend of $1.25. American Capital Mortgage Investment Corp (Nasdaq: MTGE) also lowered its dividend, cutting it to $0.80 from $0.90

Commenting, Wunderlich analyst Merrill Ross told Bloomberg American Capital Agency could rally on the dividend cut because investors may perceive this as a "de-risking" business strategy. Ross expected American Capital Agency to cut its dividend. He did not expect at cut at American Capital Mortgage Investment Corp. (Nasdaq: MTGE).

Ross thinks earnings may show American Capital Agency could have paid out the full dividend, but he thinks book value would have gone down even more.

Wunderlich Securities has a Buy rating on American Capital Agency with a price target of $33.00

For an analyst ratings summary and ratings history on American Capital Agency (NASDAQ: AGNC) click here. For more ratings news on American Capital Agency click here.

Shares of American Capital Agency closed at $25.34 yesterday, with a 52 week range of $24.01-$36.77.

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