Nomura Securities Maintains a 'Buy' on American Capital Agency (AGNC); Returns Delivered!

Nomura Securities maintains a 'Buy' on American Capital Agency (NASDAQ: AGNC) price target of $36.50.

Analyst, Bill Carcache, said, "AGNC has delivered 31% total returns since the beginning of the year, well above its mortgage REIT peers, other financial stocks, and the broader market. We expect continued outperformance as we look ahead and see upside to our dividend and book value growth expectations. We continue to see significant value in AGNC shares, which trade at just 1.15x book and generate a stable $1.25 quarterly dividend. Our target price and dividend projections suggest that AGNC will produce total returns of ~22% over the next 12 months despite the uncertain macro environment. While the future of the GSEs is unclear, we do know that their portfolios are going to continue to shrink at least 10% per year until they go away. We believe AGNC is positioned to continue to outperform under various scenarios, including one where the Fed pursues QE3 (would produce an outsized book value benefit despite less attractive reinvestment outlook) or one where the economy muddles ahead at low growth (no QE3)."

For an analyst ratings summary and ratings history on American Capital Agency click here. For more ratings news on American Capital Agency click here.

Shares of American Capital Agency closed at $33.89 yesterday.

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