AGNC Investment (NASDAQ:AGNC) is joining a growing crowd of financial services companies cutting or even eliminating their dividends. On Thursday, the mortgage real estate investment trust (mREIT) declared that its next monthly payout will be $0.12 per share, down 25% from the $0.16 per share it distributed Thursday.
In the press release announcing the new payout, the company said that the cut was “[c]onsistent with the decline in AGNC’s book value during the first quarter of 2020 stemming from the financial market dislocations associated with the COVID-19 pandemic.”
In a recent update, AGNC said that as of late March, its tangible net book value per share had fallen by 25% to 30%. This was due to significant volatility in the market for agency mortgage-backed securities.
AGNC believes that — buttressed by supporting from the Federal Reserve — the market has been improving since the beginning of the second quarter.