My bottom call on AGNC--impact of earnings

American Capital Agency Reported Q2 comprehensive income of $862 million or $2.43 per share.

Only $0.28 of was considered taxable REIT income but the company paid $0.65 in dividends resulting in a $0.37 deficit.

Net interest spread improved drastically quarter-over-quarter from 1.43% to 1.84%.

While I maintain a buy rating, I no longer have the conviction I had from my prior article this year. Wait for pullbacks and pick your spots wisely.

American Capital Agency (NASDAQ:AGNC) reported its second-quarter earnings figures. The company's comprehensive income was approximately $862 million, or $2.43 per share. This was made up of $0.08 net income per common share and $2.35 of other comprehensive income, which ultimately led to $0.28 estimated taxable income per share, which is far below the $0.65 per common share paid in dividends for the quarter, resulting in a $0.37 per share deficit. However, when it is all tallied, the company still had an additional $0.04 per share in undistributed taxable income. This is a positive but clearly the company needs to step up its earnings game to cover its dividend. The annualized yield on average interest-earning assets was 2.71%, and the annualized cost of funds on average interest-bearing liabilities was 1.45%. If we exclude................READ MORE