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NEW YORK (

TheStreet

) --

American Capital Agency Corp.

(AGNC) - Get AGNC Investment Corp. Report

shares were poised for a rally Wednesday morning as investors digested news about the mortgage real estate investment trust's reduced dividend.

AGNC cut its quarterly dividend to $1.05 per share from the $1.25 it had paid previously, the REIT announced before Tuesday's market close. AGNC shares were flat to lower in late trading Tuesday, finishing the day a penny higher at $25.34.

However, they were up more than 3% in pre-market trading Wednesday.

The dividend cut was "arguably in line with most expectations," according to a report published late Tuesday from Sterne Agee analyst Henry Coffey, who predicted a "snap-back" trade. Longer-term, Coffey's sector favorites are

Dynex

(DX) - Get Dynex Capital, Inc. Report

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MFA Financial

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.

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Written by Dan Freed in New York

.

Follow @dan_freed

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.