Zacks Investment Research downgraded shares of American Capital Agency Corp. (AGNC) from OUTPERFORM to NEUTRAL on July 24, 2012, with a target price of $36.00.
We are changing our long-term recommendation for American Capital Agency from Outperform to Neutral as we anticipate it to perform in line with the broader market. American Capital Agency focuses exclusively on fixed-rate agency securities guaranteed by the U.S. government, which limits its credit risks. American Capital Agency is also among a selected group of companies who have increased its dividend during the economic crisis. The company paid a total of $1.5 billion in dividends or $20.11 per share since its initial public offering in May 2008. However, increased volatility and deterioration in the broader residential mortgage and RMBS markets limits the upside potential of the company going forward.
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