Compare mortgage REITs (mREITs) using the same reporting date and each company’s own definitions—not headline leverage or dividend yield alone. Start with leverage and how it is calculated, examine whether funding can be renewed or replaced under stress, then assess the assets’ credit and market risks alongside the hedges and return measures. Agency-focused and credit-focused mREITs take different risks, so neither category is automatically “better.”
Make the comparison consistent before judging the numbers
Use each issuer’s latest Form 10-K or 10-Q, earnings supplement, and relevant portfolio disclosures. For a peer comparison, align the reporting date and period wherever possible. A quarter-end balance-sheet figure is not directly comparable to a quarterly average, and a company-defined ratio is not necessarily calculated the same way as a similarly named ratio at another company.
Build a worksheet that records the value, date, definition, and source for each measure. Keep reported figures distinct from estimates or non-GAAP measures, and read their footnotes. The core questions are:
| Comparison area | Record | Why it matters |
|---|---|---|
| Leverage | Gross, recourse, and “at-risk” leverage where reported; numerator and denominator; on- and off-balance-sheet financing; period-end and average figures | Debt, unsettled trades, TBA positions, preferred equity, and the equity measure used can change the result. |
| Funding and liquidity | Borrowing mix, average cost and included costs, maturity profile, counterparties, collateral terms, and unencumbered liquid assets | Funding cost affects earnings, while renewal, collateral, or counterparty stress can pressure liquidity. |
| Portfolio | Agency and non-Agency exposure; asset type; credit and collateral characteristics; coupon, vintage, prepayment behavior, and concentrations where disclosed | These characteristics influence credit losses as well as interest-rate, spread, prepayment, extension, and liquidity risk. |
| Risk management | Hedge instruments and notionals, ratio definition, duration gap, scenario sensitivities, and hedge costs | A hedge can reduce selected exposures without eliminating other risks. |
| Outcomes | Book-value changes, dividends, realized and unrealized gains or losses, and total or economic return over matching periods | A dividend yield or one quarter’s earnings alone does not show the full effect of leverage and market-value changes. |
Compare leverage by definition, not just by the multiple
Leverage magnifies both return potential and losses: when asset values fall or funding becomes harder or more expensive, a highly levered mREIT can face greater pressure on equity and collateral. AGNC’s 2025 Form 10-K describes risks that include greater sensitivity to funding costs and asset values, margin calls, defaults under funding agreements, and forced asset sales in adverse conditions. Those are company disclosures, not a recommended leverage range for the sector (AGNC 2025 Form 10-K).
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Before comparing multiples, find out what each issuer counts as debt or financing and what it uses for equity. One company’s “at-risk” leverage may include unsettled securities balances and net TBA positions; another issuer’s headline measure may treat such exposures differently. Check whether the denominator is total equity, tangible equity, or another defined measure, and whether preferred equity or goodwill is adjusted. Also distinguish recourse from non-recourse funding and period-end leverage from the average over the quarter.
AGNC reported 7.4x at-risk leverage to tangible equity at June 30, 2026, and average at-risk leverage of 7.4x for the quarter. Its definition includes repo, other debt, unsettled securities balances, and net TBA and forward-settling non-Agency positions at cost, divided by equity less goodwill. The figure is useful as an example of a company-specific definition, not as a peer benchmark (AGNC 2026 Q2 Form 10-Q).
Assess funding resilience as well as funding cost
A low reported borrowing cost does not, by itself, establish strong funding. For repo and other borrowing, examine how much funding is short-term, when it matures, how often it must be renewed, and whether the company has alternative channels if markets tighten. Look for disclosures about funding counterparties, collateral requirements or haircuts, and unencumbered assets available to support liquidity. A maturity ladder can reveal near-term renewal exposure that an average maturity figure might obscure.
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AGNC’s portfolio page reported $79.5 billion of investment-securities repo outstanding and an average cost of funds of 2.89% for the quarter ended June 30, 2026. The company says that cost measure includes repo, implied net TBA funding costs, and periodic swap costs. Compare it with another issuer only after checking that issuer’s period and included cost components (AGNC portfolio page).
Counterparty disclosures add another layer. At June 30, 2026, AGNC said its maximum amount at risk with any repo counterparty other than FICC was 1% of tangible stockholders’ equity; its five largest such counterparties together represented less than 5%. It separately reported less than 11% of tangible equity at risk with FICC. These point-in-time figures show the kind of concentration information to seek; they are not sector-wide limits or evidence that another issuer has the same exposure (AGNC 2026 Q2 Form 10-Q).
Funding channels can have different economics. Annaly notes that implied financing rates in the TBA market can at times offer a cheaper alternative to Agency repo; that qualification matters, since TBA financing is not always cheaper (Annaly’s Agency overview). Nareit’s 2014 discussion describes Agency mREIT liquidity practices such as staggering maturities and maintaining liquidity, but it is dated industry background, not proof of a particular issuer’s current funding position. Its historical statement that Agency mREIT sales of Agency RMBS in 2013 were less than a single day’s average market trading volume should likewise be read as a 2013 claim, not a current measure of market depth (Nareit’s 2014 paper).
Judge portfolio quality by the risks in the assets
“Agency” and “non-Agency” describe important differences in the assets and their risks, but they are not a simple quality ranking. Agency mortgage-backed securities have guarantees for covered credit obligations, which can reduce credit risk on those assets. That does not remove exposure to interest rates, mortgage spreads, prepayments, extensions, liquidity, or the cost and availability of funding. AGNC describes its portfolio as focused on Agency mortgage-backed securities on its portfolio page.
For a credit-focused or non-Agency portfolio, investigate the credit and collateral supporting the assets rather than treating the absence of an Agency guarantee as a single quality score. Relevant disclosures include borrower credit characteristics, collateral type and value, delinquency and performance trends, and the issuer’s exposure to losses. Separate residential from commercial exposure and loans from securities or servicing rights where the company reports those distinctions. The available company examples here do not establish a full, same-date primary-source comparison of credit-focused mREITs, so a ranking across those issuers would require reviewing their own filings.
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Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Read hedge ratios alongside the risks they leave open
Record which instruments a company uses—such as swaps, options, or Treasury positions—and how it calculates a hedge ratio. The numerator may include different instruments across issuers, and a ratio may exclude option-based hedges. Pair it with duration gap and modeled rate and spread sensitivities; also consider convexity, basis, prepayment, and extension risk, as well as the cost of maintaining the hedges.
AGNC’s June 30, 2026 Form 10-Q reported an 82% hedge ratio for swaps and U.S. Treasury hedges, excluding option-based hedges, and a 0.7-year duration gap. The company’s portfolio page reported a 73% hedge ratio for that date using a stated measure that includes swaps, swaptions, and net U.S. Treasury positions. These are differently defined measures, not contradictory values to treat as interchangeable. The filing also describes its sensitivities as modeled estimates; scenario results depend on the assumptions used (AGNC 2026 Q2 Form 10-Q; AGNC portfolio page).
A ratio does not show the risk left unhedged. AGNC says its hedges generally are not designed to protect net book value from mortgage spread risk—the risk that the yield spread between its investments and the benchmark rates linked to its hedges changes. Compare modeled rate shocks and spread shocks separately, and check whether disclosures indicate exposure to prepayment, extension, or basis moves. A hedge can reduce a selected sensitivity while leaving these other drivers of book value and earnings in place (AGNC 2025 Form 10-K).
Check returns and book value over matching periods
After comparing balance-sheet risk, review what shareholders experienced over consistent periods. Track changes in book value or tangible net book value, dividends, realized and unrealized gains or losses, and total or economic return if the issuer reports it. Read the company’s definitions, especially for non-GAAP measures, and distinguish per-share changes from aggregate figures where relevant.
A dividend yield is only one part of the result: it does not account by itself for changes in book value or market valuation, nor does it reveal how much risk the company took to support distributions. Compare the components and the period together rather than using a single quarter’s earnings or yield as a proxy for portfolio quality.
Turn the disclosures into a repeatable peer comparison
For each mREIT, assemble the latest same-date figures and their definitions before drawing conclusions. A useful comparison records leverage and its inputs; funding mix, maturities, costs, counterparties, and liquidity; asset composition and credit or market exposures; hedge instruments and scenario sensitivities; and book-value and shareholder-return outcomes over aligned periods. Where issuers define a metric differently, preserve those differences in the comparison instead of forcing unlike figures into one ranking.
SEC filings and issuer materials establish what a company reports; they are not independent assessments of management quality or a forecast of future performance. The result is a way to compare disclosed risks and outcomes—not a stock recommendation.
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