AGNC, Dynex, IVR, NLY, ORC nab Buy ratings as Janney starts coverage

Janney analyst Jason Stewart on Thursday initiated coverage on several mortgage REITs with a Buy rating, including AGNC Investment (NASDAQ:AGNC), Dynex Capital (NYSE:DX), Invesco Mortgage Capital (NYSE:IVR), Annaly Capital Management (NYSE:NLY) and Orchid Island Capital (NYSE:ORC).

The aforementioned companies are poised to benefit from potentially tighter mortgage spreads as fixed-income volatility eases, Stewart wrote in a note to clients. Such a dynamic should drive book values higher, he added.

“Historically, investors have fared well capitalizing on government intervention as non-economic participants in markets,” the note said. “Thematically, investment in the high-quality, liquid agency [mortgage-backed securities] market at current economic returns is attractive.”

SA’s Peer tab provides a detailed comparison of various metrics for the REITs previously discussed.

In premarket trading, AGNC, -0.4%, DX, -3.1%, NLY, -0.3%, and ORC, -0.4%, edged down, while IVR inched up 0.2%.