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One of the key metrics for AGNC Investment Corp. AGNC, book value per share (BVPS), a reflection of the underlying portfolios, continues to witness a declining trend in recent months.
The performance of mREITs like AGNC Investment is closely tied to macroeconomic trends and financial market conditions. Volatility in the mortgage market, interest-rate swings, and an unfavorable yield curve can impact investment returns. Over the past few years, high interest rates and market instability have increased debt servicing costs and weakened fixed-income performance. As a result, AGNC Investment’s tangible net book value per share is witnessing a declining trend in recent months. Specifically, in the second quarter of 2025, AGNC BVPS declined 7% year over year to $7.81.
This notable decrease stemmed primarily from a combination of market volatility, compressed interest spreads and unrealized losses tied to the valuation of mortgage-backed securities (MBS). One of the most significant contributors to this decline was the widening of mortgage spreads relative to U.S. Treasuries. As interest rate volatility increased in the quarter, agency MBS underperformed, leading to a drop in fair market values. These unrealized losses impacted book value. AGNC Investment's economic return on tangible common equity came in at negative 1% in the second quarter of 2025.
Following the broader market trend, AGNC peers Arbor Realty Trust ABR and Orchid Island Capital ORC are also witnessing declines in their book values.
Annaly’s BVPS was $18.45 as of June 30, 2025, down from $19.25 in the prior-year quarter. Annaly generated an economic return of 0.7% for the second quarter of 2025.
Similarly, Orchid Island’s book value per share as of June 30, 2025, was $7.21, down from $8.58 in the prior-year quarter. Orchid Island generated a negative economic return of 4.7% for the second quarter of 2025.
AGNC shares have gained 11.9% over the past year, outperforming the industry’s growth of 6.9%.
Price Performance
From a valuation standpoint, AGNC Investment trades at a forward price-to-tangible (P/TB) ratio of 1.24X, above the industry’s average of 0.97X.
Price-to-Tangible Book TTM
The Zacks Consensus Estimate for AGNC’s 2025 and 2026 earnings implies year-over-year declines of 15.4% and 0.9%, respectively. The estimates for 2025 and 2026 have been unchanged over the past seven days.
Earnings Estimates
AGNC currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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