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American Capital Agency Corp. Stock Hold Recommendation Reiterated (AGNC)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- American Capital Agency (Nasdaq: AGNC) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • AGNC's revenue growth has slightly outpaced the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 23.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 65.7% when compared to the same quarter one year ago, falling from $250.40 million to $86.00 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, AMERICAN CAPITAL AGENCY CORP's return on equity is below that of both the industry average and the S&P 500.

American Capital Agency Corp. operates as a real estate investment trust (REIT). American Capital Agency has a market cap of $10.79 billion and is part of the financial sector and real estate industry. The company has a P/E ratio of 13.1, below the S&P 500 P/E ratio of 17.7. Shares are up 9.3% year to date as of the close of trading on Tuesday.

You can view the full American Capital Agency Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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