Dynex Capital (NYSE:DX) Releases Quarterly Earnings Results, Meets Estimates

Dynex Capital (NYSE:DX) released its quarterly earnings results on Monday. The real estate investment trust reported $0.36 earnings per share (EPS) for the quarter, hitting analysts’ consensus estimates of $0.36, Zacks reports. Dynex Capital had a net margin of 49.18% and a return on equity of 9.63%. The company had revenue of $302.75 million during the quarter, compared to the consensus estimate of $103.62 million.

Here are the key takeaways from Dynex Capital’s conference call:

• Dynex reported a 6.4% total economic return in Q2, with book value per share rising to $12.90 from $12.60, helped by tighter mortgage spreads and accretive capital deployment.
• The company raised $391 million of capital during the quarter at levels management said were accretive to book value, and deployed that cash into Agency MBS as spreads remained supportive.
• Dynex emphasized its strategic focus on Agency MBS, arguing the asset class offers liquidity, flexibility, and better risk-adjusted returns in the current macro environment while supporting a more durable mortgage investment platform.
• Liquidity remains a major strength, with $1.6 billion of cash and unencumbered securities at quarter end, representing more than 51% of total equity, which management says gives it flexibility to act during market volatility.
• Management said the portfolio is positioned for a constructive MBS backdrop, with spreads still attractive, muted refinancing activity, and a lower 2026 net mortgage supply forecast of $165 billion versus $200 billion previously.

Dynex Capital Stock Down 0.6%

Shares of DX opened at $13.04 on Wednesday. The stock has a market cap of $2.80 billion, a P/E ratio of 4.96 and a beta of 0.95. The business’s 50 day moving average price is $13.03 and its 200-day moving average price is $13.42. Dynex Capital has a 52 week low of $11.82 and a 52 week high of $14.93.

Dynex Capital Announces Dividend

The business also recently declared a monthly dividend, which will be paid on Monday, August 3rd. Stockholders of record on Thursday, July 23rd will be given a $0.17 dividend. This represents a c) dividend on an annualized basis and a dividend yield of 15.7%. The ex-dividend date of this dividend is Thursday, July 23rd. Dynex Capital’s payout ratio is currently 120.71%.

Analyst Upgrades and Downgrades

A number of research analysts have weighed in on the company. Wall Street Zen downgraded Dynex Capital from a “hold” rating to a “sell” rating in a report on Saturday, May 9th. BTIG Research set a $14.50 target price on Dynex Capital in a research note on Wednesday, June 17th. JonesTrading restated a “buy” rating and set a $14.75 price target on shares of Dynex Capital in a research report on Tuesday. Weiss Ratings restated a “hold (c)” rating on shares of Dynex Capital in a research report on Wednesday, June 24th. Finally, UBS Group reaffirmed a “neutral” rating and issued a $14.50 price target (up from $14.00) on shares of Dynex Capital in a research note on Friday, April 24th. Two research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company. According to MarketBeat.com, Dynex Capital presently has a consensus rating of “Moderate Buy” and a consensus target price of $14.56.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the stock. Summit Financial LLC lifted its stake in Dynex Capital by 0.4% during the 4th quarter. Summit Financial LLC now owns 211,048 shares of the real estate investment trust’s stock valued at $2,957,000 after acquiring an additional 903 shares during the period. Brevan Howard Capital Management LP boosted its holdings in shares of Dynex Capital by 2.1% during the 3rd quarter. Brevan Howard Capital Management LP now owns 52,725 shares of the real estate investment trust’s stock valued at $648,000 after acquiring an additional 1,074 shares during the last quarter. Lido Advisors LLC grew its stake in shares of Dynex Capital by 2.3% in the third quarter. Lido Advisors LLC now owns 53,321 shares of the real estate investment trust’s stock worth $664,000 after acquiring an additional 1,179 shares during the period. Northwestern Mutual Wealth Management Co. grew its stake in shares of Dynex Capital by 124.3% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 2,378 shares of the real estate investment trust’s stock worth $33,000 after acquiring an additional 1,318 shares during the period. Finally, Xponance LLC raised its holdings in shares of Dynex Capital by 13.6% during the fourth quarter. Xponance LLC now owns 11,513 shares of the real estate investment trust’s stock valued at $161,000 after purchasing an additional 1,379 shares during the last quarter. Hedge funds and other institutional investors own 38.34% of the company’s stock.

About Dynex Capital

Dynex Capital, Inc is a mortgage real estate investment trust (REIT) that specializes in acquiring and managing mortgage-related assets. The company’s primary business involves investing in residential mortgage-backed securities (RMBS), including agency-backed pools issued or guaranteed by government-sponsored entities such as Fannie Mae, Freddie Mac and Ginnie Mae, as well as selected non-agency RMBS. Dynex Capital seeks to generate net interest income by earning interest on its portfolio while employing leverage through secured repurchase agreements and other debt facilities.

In pursuing its investment objectives, Dynex Capital manages portfolio duration and interest rate exposures, with a focus on preserving capital and optimizing yield over the economic cycle.