I have been invested in AGNC since 2008 and I liked this company. But it is time to depart from this investment as it no longer meets my requirements for Dividend investing. I wish, it was. But it isn’t.
At first, the company looked great. They started increasing dividend every year, although the very first increase in 2009 from 2.51 Annual Dividend a share to 5.15 was large and raised many questions but the company earnings and cash flow could cover the payout. So, why not. I liked it.
Then, in 2010, the company increased the dividend again to 5.60 a share Earnings and cash flow covered the payout well above. And that was the last increase investors ever saw. Two years later, as earnings started deteriorating, the company went on a path of 6 consecutive years of dividend cut.
At first, I believed in the company, and I loved them (a thing a true dividend growth investor should never ever do!) and provided excuses to myself and everybody who asked for the company, that “this is just a temporary, it is to protect the company’s ability to make money and improve”, and all sorts of other excuses. And when the company changed into monthly dividend paying company I loved them even more because I thought, I would be making money faster by re-investing the dividends.
There are better companies than this.
So I am selling all AGNC shares from all my portfolios and re-allocating to Helmerich & Payne Inc (HP) which is a dividend champion, increasing dividends every year since 1973 for 46 years. Their current dividend yield is 6.29%, and annual dividend growth 1.4%.