<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>January and February were great months for Agency MBS investments. </li><li>Market conditions worsened when the war began in March.</li><li>AGNC Investment is optimistic that an end to the war will return the market to earlier conditions. </li><li>10 stocks we like better than AGNC Investment Corp. ›</li></ul>This year started as the best of times for AGNC Investment (NASDAQ: AGNC). Several positive catalysts in January and February drove strong performances for mortgage-backed securities (MBS) during that period. However, the start of the war with Iran in March caused some headwinds for the real estate investment trust (REIT) that month, which has continued into April. Here's a look at whether this shift puts the mortgage REIT's high-yielding monthly dividend (currently over 13%) at risk of a reduction.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NjYxMy9hZ25jLWludmVzdG1lbnQtY29ycC1sb2dvLW9uLXNtYXJ0cGhvbmUtd2l0aC1zdG9jay1jaGFydC1iYWNrZ3JvdW5kLWFnbmMuanBlZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg2NjYxMy9hZ25jLWludmVzdG1lbnQtY29ycC1sb2dvLW9uLXNtYXJ0cGhvbmUtd2l0aC1zdG9jay1jaGFydC1iYWNrZ3JvdW5kLWFnbmMuanBlZyZ3PTcwMA"/>Image source: Getty Images. <h2>It was the best of times and then the worst of times</h2>The Trump Administration began the year focused on improving the housing market. That helped reduce interest rate volatility, maintain mortgage spread stability, and improve housing affordability. It also helped drive strong performance across most fixed income investments in January and February, especially Agency MBS (pools of residential mortgages guaranteed against credit losses by government agencies such as Fannie Mae). As the leading investor in Agency MBS, AGNC Investment benefited from these market conditions. Unfortunately, those robust market conditions came to an abrupt halt in March when the U.S. and Israel launched attacks against Iran, which retaliated by attacking energy targets throughout the Middle East, effectively closing the Strait of Hormuz. The war drove volatility higher and investor sentiment lower. As a result, Agency MBS spreads widened, causing AGNC to generate a negative economic return of 1.6% in the quarter due to a $0.50-per-share decrease in the tangible book value of its stock. The REIT also reported a comprehensive loss of $0.18 per share. <h2>Prepared for whatever comes next</h2>The first quarter didn't end well, and those more challenging conditions have persisted into the second quarter due to uncertainty over peace talks with Iran. However, AGNC remains optimistic despite the current challenges. CEO Peter Federico commented in the first-quarter earnings press release that, &#34;We continue to believe that many of the factors we cited at the beginning of the year remain positive catalysts for Agency MBS performance.&#34; As a result, the company believes that &#34;with some form of resolution or easing of tensions in the Middle East, these factors could quickly revert to positive catalysts for Agency MBS.&#34; That drives the company's long-term outlook that Agency MBS remain strong investment despite the near-term challenges posed by the war. Further, the company is in a strong position to capitalize on these favorable conditions when they return. It had a significant liquidity position of $7 billion in cash and Agency MBS at the end of the quarter. However, all this assumes there's a quick resolution to the war and a return to normal market conditions. That's not a guarantee, as even the ceasefire hasn't reopened the Strait of Hormuz, which is crucial to keeping a lid on inflation to support lower interest rates in the future. If the war resumes and further disrupts global energy supplies, it heightens the risk of a recession and potential credit market issues. If conditions deteriorate significantly, AGNC might need to reset its dividend, as it did in 2020 during the pandemic. <h2>A heightened risk of a reduction</h2>While this year started great for AGNC, conditions have deteriorated due to the war. If the U.S. secures a peace deal with Iran, the market could go back to where it was earlier in the year, easing the risk that AGNC would need to reduce its dividend. However, a resumption of the war could worsen conditions in the Agency MBS market. That near-term uncertainty increases the risk of a dividend reduction for AGNC, which income-focused investors need to watch closely in the coming months. <h2>Should you buy stock in AGNC Investment Corp. right now?</h2> Before you buy stock in AGNC Investment Corp., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AGNC Investment Corp. wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $511,411!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,238,736!* Now, it’s worth noting Stock Advisor’s total average return is 986% — a market-crushing outperformance compared to 199% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of April 22, 2026. Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

AGNCO

AGNC

AGNCP

AGNCN

AGNCM

AGNC Investment started the year strong, benefiting from favorable market conditions for Agency MBS in January and February. However, the onset of the war in March led to increased volatility and a negative economic return of 1.6% for the REIT. Despite current challenges, AGNC remains optimistic about a potential resolution in the Middle East that could restore positive market conditions. Investors should be cautious, as ongoing uncertainty raises the risk of a dividend reduction, similar to actions taken during the pandemic.

nasdaq

AGNC Investment Pref Share AGNC 6.5 Prep 10/15/24 E

AGNC Investment

AGNC Investment Pref Share AGNCP 6.125 Perp 04/15/25 F

AGNC Investment Pref Shares AGNC 9.67459 Perp 04/11/25

AGNC INVESTMENT CORP 6.875% DEP SHS REP 1/1000TH PFD SR D

NVIDIA

Intel

Federal National Mortgage Association

Netflix

AGNC INVESTMENT CORP DEP SHS REPSTG 1/1000TH PFD SER H

AGNC Investment Pref Share AGNCL 7.75 Perp 10/15/27

NVIDIA Corporation

It Was a Tale of Two Quarters for AGNC Investment to Start the Year. Is its 13%-Yielding Monthly Dividend at Risk?