AGNC Investment (NASDAQ: AGNC) and Hatteras Financial (NYSE:HTS) are both financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider and Institutional Ownership

65.4% of AGNC Investment shares are held by institutional investors. 0.5% of AGNC Investment shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.


AGNC Investment pays an annual dividend of $2.16 per share and has a dividend yield of 10.9%. Hatteras Financial pays an annual dividend of $1.80 per share and has a dividend yield of 11.0%. AGNC Investment pays out 53.3% of its earnings in the form of a dividend. Hatteras Financial pays out -2,000.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hatteras Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.


This table compares AGNC Investment and Hatteras Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AGNC Investment 145.02% 12.00% 1.51%
Hatteras Financial N/A -16.93% -1.89%

Earnings and Valuation

This table compares AGNC Investment and Hatteras Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AGNC Investment $927.00 million 8.34 $623.00 million $4.05 4.88
Hatteras Financial N/A N/A N/A ($0.09) -181.00

AGNC Investment has higher revenue and earnings than Hatteras Financial. Hatteras Financial is trading at a lower price-to-earnings ratio than AGNC Investment, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for AGNC Investment and Hatteras Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AGNC Investment 0 3 2 0 2.40
Hatteras Financial 0 0 0 0 N/A

AGNC Investment currently has a consensus price target of $19.45, suggesting a potential downside of 1.57%. Given AGNC Investment’s higher possible upside, research analysts plainly believe AGNC Investment is more favorable than Hatteras Financial.


AGNC Investment beats Hatteras Financial on 10 of the 12 factors compared between the two stocks.

About AGNC Investment

AGNC Investment Corp., formerly American Capital Agency Corp., is a real estate investment trust. The Company invests in agency residential mortgage-backed securities on a leveraged basis. Its investments consist of residential mortgage pass-through securities and collateralized mortgage obligations (CMOs) for which the principal and interest payments are guaranteed by a government-sponsored enterprise, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), or by the United States Government agency, such as the Government National Mortgage Association (Ginnie Mae) (collectively, GSEs). Its agency securities include agency residential mortgage-backed securities (Agency RMBS) and to-be-announced forward contracts (TBAs). Its Non-Agency Securities include credit risk transfer securities (CRT), non-agency residential mortgage-backed securities (Non-Agency RMBS) and commercial mortgage-backed securities (CMBS).

About Hatteras Financial

Hatteras Financial Corp. is an externally managed mortgage real estate investment trust (REIT) that invests in single-family residential mortgage real estate assets, such as mortgage-backed security (MBS), mortgage servicing right (MSR), residential mortgage loans and other financial assets. MBS are pass-through securities consisting of a pool of mortgage loans. Its primary business is owning and managing agency securities, with a primary focus on adjustable-rate mortgage securities. Its primary investment assets include Agency MBS; other agency issued securities, such as credit-risk transfer bonds; MSR; non-agency securities; residential mortgage loans, and other real estate related assets as permitted by its investment guidelines and REIT requirements. Its business operations consist of the Hatteras Financial Corp., Onslow Bay Financial LLC, First Winston Securities, Inc. and Wind River TRS LLC. It is externally managed and advised by its manager, Atlantic Capital Advisors LLC.

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