Many investors look to $AGNC (+0.71%) Investment Corp. because of the high dividend yield of the common stock.
But the preferred shares ("preferred shares") $AGNCN can be an even more attractive alternative for those seeking income stability.
✅ How they work:
Preferred shares combine characteristics of stocks and bonds: they offer fixed or predetermined dividends, with priority on payments than ordinary shares. They are exchange-traded, so liquid like stocks, but do not have a maturity date like bonds (they are "perpetual").
✅ Difference from bonds:
Unlike a bond, AGNC is not obligated to repay them at a specific date. However, the company often has the option to call them back ("call") at par value - typically $25 per share-if market conditions make it worthwhile.
✅ Why they matter:
- Dividend flow more stable at about 9% (with quarterly coupon)
- Priority in payouts
- Lower volatility than common stocks
- High return potential for those targeting passive income
In summary, for an investor focused on stability and cash flow, AGNC preferred shares can be an attractive portfolio component.