Rating Change #2
American Capital Agency Corp (AGNC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, attractive valuation levels, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- AGNC's very impressive revenue growth greatly exceeded the industry average of 17.8%. Since the same quarter one year prior, revenues leaped by 332.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN CAPITAL AGENCY CORP's return on equity exceeds that of both the industry average and the S&P 500.
- The gross profit margin for AMERICAN CAPITAL AGENCY CORP is currently very high, coming in at 96.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 87.80% significantly outperformed against the industry average.
American Capital Agency Corp. operates as a real estate investment trust (REIT). The company has a P/E ratio of 5.2, above the average real estate industry P/E ratio of 5.1 and below the S&P 500 P/E ratio of 17.7. American Capital Agency has a market cap of $9.61 billion and is part of the financial sector and real estate industry. Shares are up 14.4% year to date as of the close of trading on Friday.You can view the full American Capital Agency Ratings Report or get investment ideas from our investment research center.
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