How Safe Is AGNC's 13% Dividend Right Now?

AGNC Investment Corp., a major mortgage REIT, offers a 13.1% dividend yield, but its sustainability is questionable. While the dividend is currently covered by net interest spreads and dollar roll income, the gap has been shrinking over two years. Fed rate cuts reduced borrowing costs but also diminished the value of older mortgages. Future rate increases could simultaneously raise borrowing costs and cool the housing market, potentially making the dividend unsustainable.