Wunderlich Securities Reiterates Buy, $34 Target on American Capital Agency
Wunderlich Securities maintains its Buy rating and $34 target price on American Capital Agency (NASDAQ: AGNC) as company reports 4Q11 results that outperformed expectations.
Wunderlich Securities comments, "American Capital Agency (AGNC) reported $0.99 of net income for 4Q11. We had estimated EPS of $1.38 and year-end book value of $26.91, while actual results were $0.99 and BVPS of $27.71; so the company actually outperformed our expectations. Value creation in 2011 consisted of $5.60 in dividends and $3.47 in book value accretion. In the current low spread environment, the board chose to lower the dividend to $5/year for 2012. We believe that dividends could have been maintained, though at much higher risk. Optimal returns are not always the equivalent of maximum returns."
AGNC closed at $29.48 a share on Monday.
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