Why Is AGNC's Dividend So High?
Not all real estate investment trusts (REITs) are the same, a fact that's particularly important to remember when you venture into the mortgage REIT sector. Indeed, when investors see AGNC Investment's (NASDAQ: AGNC) huge 14% dividend yield, they need to consider a lot more than just the big dividend checks. Here's why AGNC's yield is so high and why conservative dividend investors may not want to buy it.
When most people think of a REIT, they probably conjure up a physical property, like an apartment building, strip mall, or office building. In general, owning such assets is a pretty stable business as the landlord gets to collect regular rent checks. The income generated is passed on to investors via well-supported dividends. There are a lot of well-run REITs with incredible dividend histories out there, including Federal Realty Investment Trust (NYSE: FRT), which has increased its dividend annually for more than five decades! (That's the longest streak in the REIT sector.)
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Source Fool.com
