Where Will AGNC Investment Be in 10 Years?

At first glance, AGNC Investment (NASDAQ: AGNC) looks like a high-yield story, given its huge 14%+ dividend yield. It really isn't, but you have to dig into the story a little bit to understand why. And, perhaps just as important, the value that management likes to highlight from its dividend payments isn't as great as you might think. Here's what you need to know about the past 10 years and what it suggests about the next 10 years.

To get a couple of perfunctory issues out of the way, AGNC is a mortgage real estate investment trust (REIT). That's a somewhat unique corner of the REIT sector that is far more complex than a typical property-owning REIT. Essentially, AGNC buys mortgages that have been pooled into bond-like securities, which makes it more like a mortgage-focused mutual fund than a REIT. But the graph below will explain why most income investors probably won't like AGNC.