Dallas, Texas 10/04/2013 (Financialstrend) – American Capital Agency Corp. (NASDAQ:AGNC) slashed its third quarter dividend payout by 24% in an announcement on September 19. It will be paying out $0.8 per share as against its previous quarter payout of $1.05 per share. The lowered dividends will be paid out on October 28, to share holders on record as of September 30. The stock goes ex dividend on October 3.
As second part of the announcement from AGNC declared that in a bid to increase its stock value, the firm has also repurchased close to 11.9 million shares of common stock in the current quarter. The repurchased shares represent 3% of the 396 million outstanding shares of common stock. The average price of these purchases is $22.16 which translates to a 3.8% dip in comparison to the share price as of October 3. The company spent close to $263 million to fund this repurchase exercise. With the completion of the recent buy back exercise American Capital has spent close to $347 million over the past 12 months to acquire close to 14.8 million shares of common stock.
The recent cut in dividend by AGNC is in line with cuts that other Mortgage have been forced to undertake as the stock is getting re-priced to level with changed monetary and economic scenarios. Other major REIT who have slashed dividend are Annaly which cut dividend by 12.5% and American Capital Mortgage which also cut its dividend by same percentage. Even at these cut down dividend levels, the AGNC fund averages an annual dividend yield of 13.88%.
The firm has a market cap of close to $9.1 billion with sales of $2.18 billion and net income of $2.94 billion. In the past 12 weeks the shares of AGNC has gone up by close to 14%.