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Comparing mortgage REITs with price-to-book value means dividing the share price by a clearly identified, per-common-share book value reported for a specific date. The calculation is useful only when the denominator excludes preferred equity where appropriate, uses the same book-value definition for every company, and is paired with the change in book value, leverage, asset mix, and dividend coverage. A stock trading below book is not automatically cheap: the book may be stale, still falling, or calculated on a different basis from the figure used for a peer.
The examples below use figures available in November 2026. Prices are cited market snapshots, while book values are quarterly figures that can be weeks old. Rebuild each ratio from the latest company release before making an investment decision.
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At a glance
| Name | Best for | Key spec | Checked |
|---|---|---|---|
| AGNC Investment Corp. | Agency-MBS benchmark | $8.20 cited Nov. 12 close ÷ $7.13 tangible net book value per common share at Sept. 30 = 1.15x | November 2026 |
| Annaly Capital Management | Mixed agency, residential-credit and servicing comparison | $17.57 cited Nov. 12 close ÷ $17.86 third-quarter tangible book per share reported by The Motley Fool = about 0.98x | November 2026 |
These are worked examples, not a complete ranking of the mortgage-REIT universe. Annaly’s book figures in this article are attributed to The Motley Fool because the underlying Annaly filing was not opened.
What does price-to-book mean for a mortgage REIT?
Price-to-book (P/B) compares what investors pay for one common share with the accounting value attributable to that common share:
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Price-to-book = common share price ÷ book value per common share.
For a mortgage REIT, book value is especially important because the balance sheet is largely a portfolio of mortgages, mortgage-backed securities (MBS), hedges and financing. Nareit describes mortgage REITs as companies that finance income-producing real estate by purchasing or originating mortgages and MBS and earning interest income on those investments. Most securities are marked to market, so changes in Treasury yields, mortgage spreads and volatility can move equity value quickly.
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Which book-value denominator should you use?
Use the issuer’s own per-common-share figure first, and write down exactly what it measures. “GAAP book value,” “common book value,” “tangible net book value,” “economic book value” and a vendor’s “TTM tangible book” are not interchangeable.
1. Issuer tangible net book value per common share
This is usually the cleanest starting point for an agency mortgage REIT. It generally removes goodwill and preferred equity and divides the residual by common shares. AGNC’s third-quarter 2026 release, for example, reported tangible net book value of $7.13 per common share at September 30, 2026 and said $526 million of goodwill, or $0.42 per share, was excluded.
2. Common book value before removing goodwill
A vendor may subtract preferred stock but leave goodwill in equity. That number can be reasonable for a general accounting comparison, but it will be higher than tangible book when goodwill is material.
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3. Total equity divided by common shares
This shortcut subtracts liabilities from assets and divides by shares without removing preferred equity. Preferred stock remains part of the numerator, making the company appear to trade at a lower P/B than common shareholders actually receive.
4. Trailing or “TTM” tangible book
A trailing series can use an older quarter or a vendor-specific adjustment. It is not a current estimate merely because the page labels it “TTM.” If the market price is from November and the book value is from June, the ratio may describe a book value that has already changed materially.
GuruFocus and YCharts illustrate the issue. In November 2026, the same roughly $8.20 AGNC price produced readings near 1.14, 1.08 and 0.90 depending on whether the denominator was vendor tangible book, common book including goodwill, or total equity that still included preferred stock.
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How do you calculate mortgage-REIT price-to-book correctly?
Follow the same sequence for every company in the comparison.
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Repair common Windows errors and clear accumulated junk for a smoother, more stable PC - no reinstall needed.Free scan · no reinstall- Record the price date and price. Use a regular-session close or a clearly labeled intraday quote. Do not pair an unlabeled live price with a historical book value.
- Open the latest earnings release or filing. Find tangible net book value per common share, common shares outstanding, preferred equity and goodwill. Note the reporting date.
- Confirm the denominator. Determine whether the company reports GAAP common equity, tangible net book value, economic book value or another non-GAAP measure. Preserve the company’s wording.
- Calculate the ratio. Divide the price by the selected per-share book value and round only at the end. A ratio of 1.15 means the stock trades at 115% of book, or about a 15% premium.
- Calculate the discount or premium. Discount to book = 1 − P/B. Premium to book = P/B − 1. A 0.98 ratio is about a 2% discount, not a 98% discount.
- Check the book-value trend. Compare at least the latest two or three quarters. A low P/B against a rapidly shrinking denominator is not the same opportunity as a low P/B against stable book.
- Check asset mix and leverage. Compare only companies with similar exposure and verify how each defines leverage.
- Test the dividend against the issuer’s own earnings measure. Put distributable or core earnings beside GAAP income and the change in book value.
Why do mortgage-REIT price-to-book websites disagree?
They usually disagree because they are using different denominators or dates, not because the arithmetic is difficult. AGNC provides a useful reconciliation.
| Source and date | Price | Book per share | Implied P/B | Denominator indicated |
|---|---|---|---|---|
| AGNC release, book Sept. 30, 2026; cited Nov. 12 close | $8.20 | $7.13 | 1.15x | Issuer tangible net book value per common share |
| GuruFocus tangible-book field, Nov. 13, 2026 | $8.20 | $7.185 | 1.14x | Equity less preferred and intangibles, divided by shares |
| GuruFocus standard P/B | $8.20 | $7.60 | 1.08x | Common book before removing goodwill |
| YCharts displayed reading | $8.21 | About $7.60 | 1.080x | Matches the $7.60 vendor field |
| Macrotrends/FinanceCharts field | $8.20 | $9.16 | 0.90x | Total equity divided by shares; preferred stock remains included |
| Stock Alarm TTM field | $8.20 | $9.19 | About 0.89x | Not reconciled to the issuer’s quarterly figure |
The bridge is visible in the reported balance-sheet numbers. FinanceCharts shows AGNC equity of $11.560 billion ($133.432 billion of assets minus $121.872 billion of liabilities) and about 1.262 billion shares, producing $9.16 per share. Subtracting approximately $1.56 per share of preferred stock and $0.42 per share of goodwill produces about $7.18, close to the GuruFocus tangible figure. AGNC’s own $7.13 has a residual difference of roughly five cents that is not reconciled here.
Use $7.13 when describing AGNC’s reported tangible net book value. Use $7.18 or $7.60 only when explicitly describing the relevant vendor field. Do not silently substitute a vendor’s number for the issuer’s measure.
Worked example: is AGNC above book and Annaly below book?
Using the cited November 12, 2026 regular-session prices, AGNC was at about 1.15 times September 30 tangible book ($8.20 ÷ $7.13). Annaly was about 0.98 times third-quarter tangible book if the $17.86 figure reported by The Motley Fool is used with its $17.57 price. That does not establish that Annaly is the better value.
AGNC: the price is above a sharply lower book value
- Tangible net book value was $7.13 at September 30, 2026, down $1.45, or 16.9%, from $8.58 at June 30.
- Economic return on tangible common equity was negative 12.7% for the quarter, combining a $0.36 dividend with the $1.45 book-value decline.
- Comprehensive loss was $1.28 per common share, including a $1.17 net loss and $0.11 of other comprehensive loss.
- Net spread and dollar-roll income, a non-GAAP measure, was $0.37 per share against a $0.36 dividend.
- At-risk leverage was 7.9 times tangible net book value at quarter-end, with $6.3 billion of unencumbered cash and Agency MBS.
- The $94.4 billion portfolio was 94% 30-year fixed-rate Agency MBS and TBA securities.
The 1.15 ratio is therefore a premium to a book value that had already fallen 16.9% in one quarter. It is not a premium to an estimated November book value; no intra-quarter AGNC book estimate is used here.
Annaly: the ratio depends on using the current quarter
The Motley Fool reported Annaly tangible net book value of $20.15 at June 30, 2026 and $17.86 for the third quarter, a $2.29 decline in one quarter. Using $17.86 with the $17.57 cited close gives approximately 0.98 times book. FinanceCharts instead shows about 0.87 because it uses roughly $20.16, which corresponds to the older June figure. The apparent 13% discount is largely a stale-denominator artifact.
The businesses also differ. AGNC’s disclosed portfolio was overwhelmingly Agency MBS and TBAs. A June 30, 2026 secondary description of Annaly cited agency assets including TBAs at about 57% of capital, residential credit at about 22% and mortgage servicing rights at about 21%. Those exposures respond differently to interest rates, prepayments, mortgage spreads and credit losses, so a lower ratio is not automatically a cheaper version of AGNC.
Which mortgage REITs should be compared with each other?
Start with peer groups, not the entire list of listed mortgage REITs. Nareit reported 29 mortgage REITs in the FTSE Nareit US Real Estate Indexes in 2026, but their assets and funding models vary widely.
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- Agency mortgage REITs: Primarily government-sponsored Agency MBS and related financing. They are highly sensitive to rates, prepayments, mortgage spreads and leverage. AGNC is the worked example.
- Residential hybrid or credit REITs: Combine Agency assets with non-Agency credit, residential loans or other investments. Credit losses and underwriting matter more than in a pure Agency portfolio.
- Originators and servicers: May own mortgage servicing rights, loans and operating platforms. Earnings and book value can reflect servicing values and origination economics.
- Commercial mortgage REITs: Hold whole loans or commercial real-estate debt. Property cash flow, collateral values, maturities and borrower credit are central risks.
Examples shown on a November 2026 YCharts comparison included Annaly at 0.9836, Dynex Capital at 0.9137, Rithm Capital at 0.7193, Angel Oak Mortgage REIT at 0.6536 and Starwood Property Trust at 0.7134. Those are one vendor’s standardized readings, not a fair-value table. Rithm, Angel Oak and Starwood have materially different credit, servicing or commercial exposure from an Agency-focused company.
Do not import an equity-REIT benchmark without qualification. GuruFocus showed a 0.82 median P/TB for 946 REIT companies, but that universe mixes mortgage and equity REITs. Equity REIT analysis commonly emphasizes property values and funds from operations; those metrics do not create a clean fair-value benchmark for an Agency mortgage REIT.
How should book-value change and economic return affect the decision?
Price-to-book is a level; economic return measures what happened during the holding period. For AGNC, the third quarter’s negative 12.7% economic return showed why a covered dividend does not automatically mean a successful quarter. The company defines economic return as dividends plus the change in tangible net book value, divided by beginning tangible book.
AGNC’s $0.37 net spread and dollar-roll income slightly exceeded its $0.36 dividend, but tangible book still fell from $8.58 to $7.13. The company’s measure starts with GAAP net interest income or expense, adjusts for retrospective premium-amortization changes, includes TBA dollar-roll and swap income or cost, and subtracts operating expenses and preferred dividends. AGNC warns that the measure is non-GAAP and may not match similarly named measures at other companies.
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Read the dividend test in three layers:
- Compare the declared dividend with the company’s named distributable, core or spread-income measure.
- Compare that income with comprehensive income, so mark-to-market gains and losses remain visible.
- Subtract the period’s book-value loss from the dividend to calculate the economic return.
A high yield can compensate investors for risk, but it cannot erase a continuing erosion of book value. Nareit reported a 16.59% mortgage-REIT dividend yield, a negative 16.25% year-to-date total return and a negative 4.45% October total return as of October 30, 2026. Those sector figures are context, not evidence that any individual stock is cheap.
What leverage and funding details belong beside P/B?
Leverage magnifies both gains and losses in a mortgage portfolio. Agency-focused guides commonly describe repo leverage around six to eight times equity, while non-Agency and commercial lenders often use lower leverage; these are guide ranges, not regulatory limits or a sector census.
AGNC reported 7.9 times tangible net book value “at risk” leverage at September 30, 2026 and an average of 7.6 times during the quarter. Do not compare that number with another company’s headline leverage until you know whether the numerator includes repo debt, other debt, unsettled securities, TBA and forward positions, and whether Treasury repurchase agreements are excluded. A June 2026 AGNC explanation described those inclusions and exclusions in detail.
Also record:
- Repo maturities, counterparties and collateral terms.
- Unencumbered cash and securities available to meet margin calls.
- Hedge instruments and the portion of risk they actually address.
- Net interest spread and how it changes when the yield curve moves.
- Agency versus non-Agency exposure and the sensitivity to credit losses or prepayments.
AGNC’s annualized net interest spread was 1.86% in the third quarter of 2026, down from 2.00% in the prior quarter. That figure sits within the 1.0% to 2.5% range described by one mREIT analysis guide, but the range is illustrative rather than a universal standard.
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Yes, but the reason must be operational and measurable rather than simply a high dividend. A premium can reflect a more resilient portfolio, better funding, lower operating costs, stronger risk management, or a demonstrated ability to grow book value. It can also give a company an opportunity to issue shares accretively.
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AGNC said it issued $992 million of common stock through its at-the-market program at a significant premium to tangible net book value after being added to the S&P MidCap 400. Issuing shares above book can increase book value per share for existing holders; issuing below book can dilute them. Therefore, a premium is not automatically unsafe, and a discount is not automatically safe.
What does a reliable mortgage-REIT comparison worksheet contain?
Use one row per company and one column per explicitly defined item:
- Share price and price date.
- Book-value reporting date.
- Issuer tangible net book value per common share.
- Vendor common-book and tangible-book fields, if used, each in separate columns.
- Preferred equity and goodwill per common share.
- Calculated P/B, premium or discount.
- Book-value change for the latest quarter and for several quarters.
- Economic return on common equity.
- Asset mix by Agency MBS, credit, servicing rights, whole loans and other assets.
- Leverage, with the company’s exact formula.
- Liquidity and unencumbered assets.
- Named dividend-coverage measure and declared dividend.
- Share issuance or repurchase activity.
Keep every date in the worksheet. AGNC’s own P/B series moved from 1.040 on September 29, 2026 to 1.193 on September 30 and later showed 1.080 on a YCharts page. The denominator may have updated when quarterly book was released, while the price moved daily. A chart without dates can conceal that distinction.
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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteWhat price-to-book level counts as cheap?
There is no regulator, Nareit rule or universal threshold declaring a mortgage REIT cheap at a particular P/B. A discount is a research prompt, not a verdict. The same 0.85 ratio can represent a bargain when book is stable and a value trap when book is falling, leverage is high or the portfolio faces losses.
GuruFocus reported AGNC’s 13-year price-to-tangible-book range as 0.77 to 1.26, with a median of 1.04 and a November 2026 reading of 1.14 on its own definition. That history can frame AGNC’s valuation, but it should not be generalized to commercial or credit mortgage REITs, and it does not forecast the next quarter’s book value.
A practical conclusion is conditional: investigate a discount when the denominator is current, comparable, and supported by stable or recovering book value; demand more evidence when the discount follows a large book-value decline; and treat a premium as a capital-allocation and portfolio-quality question rather than proof of safety.
Mortgage REIT price-to-book checklist
- Did I use the latest reported quarter?
- Is the price date stated next to the book date?
- Does the denominator belong to common shareholders?
- Did I remove preferred equity and identify goodwill treatment?
- Are all companies using the same definition?
- Do the companies hold comparable assets?
- What happened to book value over several quarters?
- What was the economic return, not just the dividend?
- How is leverage calculated?
- Does the issuer’s own earnings measure cover the dividend?
- Could issuing shares at the current P/B help or hurt existing holders?
- Am I mistaking an equity-REIT median or a stale vendor field for a mortgage-REIT benchmark?
How often should I recalculate a mortgage-REIT price-to-book ratio?
Recalculate whenever a company reports a new quarter, issues or repurchases a material number of shares, or provides an intra-quarter book-value estimate. The share price changes every trading day, but the authoritative book value usually changes only when the company reports.
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Between reports, label the ratio as price divided by the latest reported book, not as current book value. That wording prevents readers from treating a stale denominator as a live estimate.
Does a discount to book protect me if the mortgage REIT is highly leveraged?
No. Leverage can turn a relatively small decline in MBS prices or mortgage spreads into a much larger decline in common equity. A discount can widen while book value falls, so review funding, margin liquidity, hedge limits and asset duration before treating the discount as a margin of safety.
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Should preferred stock be included in a mortgage-REIT book-value calculation?
Not when the question is what remains for common shareholders. Preferred stock is part of total equity but has a senior claim to common equity, so leaving it in the numerator understates the effective price-to-common-book ratio.
If you present a total-equity measure for transparency, label it separately and do not compare it directly with tangible net book value per common share.
Can I compare a mortgage REIT’s P/B with an ordinary equity REIT?
Only with substantial qualification. Equity REITs own properties and are often evaluated with property net asset value and funds from operations, while mortgage REITs own and finance loans and MBS whose market values, hedges and funding costs change rapidly.
Use an equity-REIT statistic as a broad market reference at most, never as the main fair-value benchmark for an Agency or credit mortgage REIT.
Frequently Asked Questions
What is tangible net book value per share?
It is the portion of equity attributable to common shareholders after preferred equity and specified intangible assets, commonly goodwill, are removed and the remainder is divided by common shares. The exact adjustments are company- and vendor-specific, so read the reconciliation rather than relying on the label alone.
Why can a mortgage REIT’s dividend yield rise while its valuation worsens?
The yield is calculated from the dividend and a falling share price. If the price falls because investors expect lower book value or weaker earnings, the mathematical yield can rise even as total-return prospects deteriorate.
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Trailing book value is the last formally reported quarter’s figure. Current book value would require a newer company estimate or a fresh report; using the word “current” for an older quarterly number can make a discount or premium look larger than it really is.
How should share issuance affect a price-to-book comparison?
A company issuing common shares above tangible book can increase book value per share, while issuance below book can dilute it. Check the share count and issuance price in the latest release before comparing two companies with different capital-raising activity.
