AGNCN

We're at the halfway point of another surprisingly strong REIT earnings season, with property fundamentals continuing to improve despite a materially tougher interest rate and capital market backdrop. Among 52 equity REITs providing full-year FFO guidance, 44 raised their outlooks (85%), six maintained guidance, and just two lowered (4%) their FFO outlook. REITs have significantly outperformed during earnings season, with the Equity REIT Index gaining nearly 4% during this stretch versus a -3% decline for the S&P 500.

Annaly Capital Management (NLY) preferred NLY-G offers an 8.75% stripped yield and carries the lowest risk rating of 1. NLY-G trades above the buy range at $24.96, making it a hold rather than a buy despite its low risk profile. NLY-G's low floating spread (4.172%) limits income upside and reduces call risk, while alternatives like NLY-F and AGNCN offer higher yields with more risk.

Rate Shock: REITs enter earnings season on their back foot amid a renewed surge in long-term rates, facing a materially different cost-of-capital and financing environment than just three months ago. The rate surge is again stressing highly leveraged borrowers, particularly across private markets. Public REITs are better positioned, but remain exposed through refinancing, tenant credit, and equity valuations. Higher rates have brought an important silver lining: years of expensive capital are finally curbing construction, with shrinking pipelines beginning to support occupancy, rents, and landlord pricing power.

Five high-yield tickers have ex-dividend dates arriving in days, and buying even one session too late means the seller collects your payment instead.

The Fed's recent hawkish pivot sharply increased interest rates, negatively impacting most income sectors. CMT preferreds emerge as a compelling sub-sector, offering potential protection against rising long-term rates. Screening CMT preferreds by reset yield and yield-to-call can help identify attractive opportunities.

Pareto upgrades - swapping into strictly superior securities within the same issuer - can materially improve portfolio yield without increasing risk. Repeated Pareto upgrades raised yield on invested capital from 8.53% to 11.33% in under two years, demonstrating powerful compounding effects. Current actionable opportunity: ABR-D preferred offers an 18 basis point yield advantage over ABR-E with identical upside to par and risk profile.

AGNC Investment Corp. (AGNC) Q1 2026 Earnings Call Transcript

AGNC Investment Corp. CUM 1/1000 7% C stands out among AGNC preferreds for its balanced yield, price, and risk profile. AGNC's agency MBS strategy delivered strong returns in 2025, with the mREIT environment stabilizing and supporting preferred share income appeal. Yield-chasing among AGNC preferreds often exposes investors to call risk or lower income; AGNCN avoids these extremes.