Reviewing AGNC Investment (NASDAQ:AGNC) and Dynex Capital (NYSE:DX)

Dynex Capital (NYSE:DX) and AGNC Investment (NASDAQ:AGNC) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Insider & Institutional Ownership

38.3% of Dynex Capital shares are held by institutional investors. Comparatively, 38.3% of AGNC Investment shares are held by institutional investors. 1.0% of Dynex Capital shares are held by insiders. Comparatively, 0.4% of AGNC Investment shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Dynex Capital and AGNC Investment’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dynex Capital	17.27%	4.19%	0.57%
AGNC Investment	11.50%	19.32%	1.71%

Volatility and Risk

Dynex Capital has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, AGNC Investment has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Dividends

Dynex Capital pays an annual dividend of $2.04 per share and has a dividend yield of 15.3%. AGNC Investment pays an annual dividend of $1.44 per share and has a dividend yield of 14.4%. Dynex Capital pays out 261.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AGNC Investment pays out 423.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dynex Capital has raised its dividend for 5 consecutive years. Dynex Capital is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Dynex Capital and AGNC Investment, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dynex Capital	0	3	2	0	2.40
AGNC Investment	0	4	6	0	2.60

Dynex Capital presently has a consensus price target of $13.08, indicating a potential downside of 1.67%. AGNC Investment has a consensus price target of $9.75, indicating a potential downside of 2.60%. Given Dynex Capital’s higher probable upside, equities research analysts plainly believe Dynex Capital is more favorable than AGNC Investment.

Earnings & Valuation

This table compares Dynex Capital and AGNC Investment”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dynex Capital	$107.76 million	16.04	$113.90 million	$0.78	17.06
AGNC Investment	$2.95 billion	3.54	$863.00 million	$0.34	29.44

AGNC Investment has higher revenue and earnings than Dynex Capital. Dynex Capital is trading at a lower price-to-earnings ratio than AGNC Investment, indicating that it is currently the more affordable of the two stocks.

Summary

Dynex Capital beats AGNC Investment on 9 of the 17 factors compared between the two stocks.

About Dynex Capital

Dynex Capital, Inc., a mortgage real estate investment trust, invests in mortgage-backed securities (MBS) on a leveraged basis in the United States. It invests in agency and non-agency MBS consisting of residential MBS, commercial MBS (CMBS), and CMBS interest-only securities. Agency MBS have a guaranty of principal payment by an agency of the U.S. government or a U.S. government-sponsored entity, such as Fannie Mae and Freddie Mac. Non-Agency MBS have no such guaranty of payment. The company has qualified as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal income taxes if it distributes at least 90% of its taxable income to its stockholders as dividends. Dynex Capital, Inc. was incorporated in 1987 and is headquartered in Glen Allen, Virginia.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).