Dynex Capital (NYSE:DX) Issues Quarterly Earnings Results, Misses Expectations By $0.01 EPS

Dynex Capital (NYSE:DX) released its quarterly earnings data on Monday. The real estate investment trust reported $0.38 EPS for the quarter, missing the consensus estimate of $0.39 by ($0.01), Zacks reports. Dynex Capital had a net margin of 49.18% and a return on equity of 8.85%.

Here are the key takeaways from Dynex Capital’s conference call:

• Book value fell sharply: Book value per common share declined 15.4% to $10.91 in the third quarter, producing a negative total economic return of approximately 11.5% as Treasury yields rose above 5% and Agency MBS spreads widened.
• Liquidity and financing remained robust: Dynex ended the quarter with $1.3 billion of cash and unencumbered securities, more than $24 billion of repo financing across over 25 counterparties, and said funding markets remained deep and resilient through the volatility.
• Management sees an attractive forward opportunity: Wider mortgage spreads, limited refinancing incentives, and substantially improved convexity have reduced cash-flow uncertainty; management estimates static levered ROEs of roughly 20% for lower coupons and up to 25% for current coupons.
• Capital flexibility increased: The company raised $384 million during the quarter, including $116 million through its first preferred equity offering since 2020, which increased preferred equity to about 7% of total equity and diversified its funding base.
• Risk positioning favors spread exposure: Dynex maintained its positions rather than deleveraging, increased spread sensitivity to about 5.7% of common equity per 10 basis points, and ended at 9.0x leverage while adding hedges as rates rose.

Dynex Capital Price Performance

Shares of DX traded down $0.41 during mid-day trading on Monday, reaching $10.52. The stock had a trading volume of 3,640,644 shares, compared to its average volume of 5,993,042. The firm has a market cap of $2.60 billion, a price-to-earnings ratio of 4.00 and a beta of 0.98. Dynex Capital has a 12 month low of $10.31 and a 12 month high of $14.93. The business has a fifty day moving average of $12.15 and a 200 day moving average of $12.75. The company has a debt-to-equity ratio of 0.01, a quick ratio of 1.16 and a current ratio of 1.16.

Dynex Capital Announces Dividend

The company also recently announced a monthly dividend, which will be paid on Monday, November 2nd. Investors of record on Thursday, October 22nd will be issued a $0.17 dividend. This represents a $2.04 annualized dividend and a yield of 19.4%. The ex-dividend date of this dividend is Thursday, October 22nd. Dynex Capital’s dividend payout ratio is currently 77.57%.

Analyst Upgrades and Downgrades

DX has been the topic of a number of recent research reports. JonesTrading reiterated a “buy” rating and set a $14.75 price target on shares of Dynex Capital in a research report on Tuesday, July 21st. Weiss Ratings cut Dynex Capital from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Friday. BTIG Research set a $12.00 price objective on shares of Dynex Capital and gave the stock a “buy” rating in a report on Tuesday, October 6th. Finally, Keefe, Bruyette & Woods restated an “outperform” rating on shares of Dynex Capital in a report on Tuesday, July 21st. Three investment analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, the company presently has a consensus rating of “Hold” and a consensus price target of $13.94.

Insider Activity at Dynex Capital

In other Dynex Capital news, CIO John Jr bought 2,500 shares of the firm’s stock in a transaction that occurred on Friday, September 25th. The shares were bought at an average price of $11.18 per share, with a total value of $27,950.00. Following the purchase, the executive owned 58,695 shares of the company’s stock, valued at $656,210.10. This trade represents a 4.45% increase in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. 0.76% of the stock is owned by insiders.

Dynex Capital Company Profile

Dynex Capital, Inc (NYSE: DX) is a mortgage real estate investment trust that invests in mortgage-related assets. Its portfolio primarily consists of agency mortgage-backed securities, including securities backed by residential and commercial mortgages, as well as other mortgage assets.

The company uses financing arrangements, including repurchase agreements, to support its investment activities and seeks to generate income from the spread between the returns on its investments and its financing and operating costs.