Dynex Capital (NYSE:DX) Hits New 52-Week Low on Disappointing Earnings

Dynex Capital, Inc. (NYSE:DX)’s stock price reached a new 52-week low during trading on Tuesday after the company announced weaker than expected quarterly earnings. The stock traded as low as $10.31 and last traded at $10.5710, with a volume of 11,729,819 shares changing hands. The stock had previously closed at $10.93.

The real estate investment trust reported $0.38 earnings per share for the quarter, missing analysts’ consensus estimates of $0.39 by ($0.01). The firm had revenue of $101.56 million for the quarter, compared to analysts’ expectations of $113.48 million. Dynex Capital had a negative net margin of 4.65% and a positive return on equity of 10.45%.

Dynex Capital Dividend Announcement

The firm also recently disclosed a monthly dividend, which will be paid on Monday, November 2nd. Shareholders of record on Thursday, October 22nd will be paid a $0.17 dividend. This represents a $2.04 dividend on an annualized basis and a dividend yield of 18.7%. The ex-dividend date of this dividend is Thursday, October 22nd. Dynex Capital’s dividend payout ratio (DPR) is presently 77.57%.

Key Headlines Impacting Dynex Capital

Here are the key news stories impacting Dynex Capital this week:

• Positive Sentiment: CEO Smriti Popenoe purchased 12,000 shares for approximately $156,600, while CFO Michael Sartori bought 1,000 shares for $10,700. The insider purchases increase their respective holdings and may signal management’s confidence that the stock is undervalued. CEO insider purchase filing CFO insider purchase filing
• Positive Sentiment: Management said stable funding and limited refinancing needs are allowing Dynex to earn attractive spreads without relying on near-term interest-rate cuts. The company also believes wider mortgage-backed securities spreads could create better future investment opportunities. Dynex Capital earnings call highlights
• Neutral Sentiment: JonesTrading lowered its price target from $14.75 to $12.50 but maintained a “buy” rating, implying analysts still see potential upside despite the weaker quarter. JonesTrading price target update
• Negative Sentiment: Third-quarter results were disappointing: Dynex reported a $335.5 million net loss, or $1.34 per share, and book value per share fell to $10.91 from $12.90. Wider Agency MBS spreads reduced portfolio values, producing a negative economic return of $1.48 per share. EPS of $0.38 also narrowly missed estimates, while revenue of $101.6 million fell short of the $113.5 million consensus. Leverage increased to 9.0 times equity, adding risk. Dynex Capital third-quarter results

Analyst Ratings Changes

DX has been the topic of several recent analyst reports. Weiss Ratings downgraded Dynex Capital from a “hold (c-)” rating to a “sell (d+)” rating in a report on Friday. JonesTrading dropped their price objective on Dynex Capital from $14.75 to $12.50 and set a “buy” rating for the company in a report on Monday. Keefe, Bruyette & Woods reaffirmed an “outperform” rating on shares of Dynex Capital in a research report on Tuesday. Finally, BTIG Research set a $12.00 target price on Dynex Capital and gave the stock a “buy” rating in a research note on Tuesday, October 6th. Three 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. Based on data from MarketBeat, Dynex Capital presently has an average rating of “Hold” and a consensus target price of $13.38.

Insider Activity

In other news, CIO Terrence John Connelly, Jr. acquired 2,500 shares of Dynex Capital stock in a transaction that occurred on Friday, September 25th. The stock was purchased at an average price of $11.18 per share, for a total transaction of $27,950.00. Following the purchase, the executive directly owned 58,695 shares in the company, valued at $656,210.10. The trade was a 4.45% increase in their position. The purchase was disclosed in a document filed with the SEC, which can be accessed through this link. Also, CEO Smriti Popenoe bought 12,000 shares of Dynex Capital stock in a transaction that occurred on Tuesday, October 20th. The shares were acquired at an average cost of $13.05 per share, for a total transaction of $156,600.00. Following the completion of the transaction, the chief executive officer directly owned 541,098 shares in the company, valued at $7,061,328.90. This represents a 2.27% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. In the last 90 days, insiders bought 15,500 shares of company stock valued at $195,250. Company insiders own 0.76% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in DX. BlackRock Inc. lifted its holdings in Dynex Capital by 14.6% in the second quarter. BlackRock Inc. now owns 18,437,985 shares of the real estate investment trust’s stock valued at $241,722,000 after acquiring an additional 2,355,906 shares during the period. Callodine Capital Management LP acquired a new stake in shares of Dynex Capital during the 1st quarter worth approximately $21,320,000. Segall Bryant & Hamill LLC purchased a new position in shares of Dynex Capital during the 1st quarter valued at approximately $19,581,000. Royal Bank of Canada increased its holdings in shares of Dynex Capital by 2,358.9% during the 1st quarter. Royal Bank of Canada now owns 1,531,103 shares of the real estate investment trust’s stock valued at $19,537,000 after purchasing an additional 1,468,836 shares in the last quarter. Finally, Wellington Management Group LLP increased its holdings in shares of Dynex Capital by 142.9% during the 2nd quarter. Wellington Management Group LLP now owns 2,221,800 shares of the real estate investment trust’s stock valued at $29,128,000 after purchasing an additional 1,307,100 shares in the last quarter. Hedge funds and other institutional investors own 38.34% of the company’s stock.

Dynex Capital Stock Performance

The company has a debt-to-equity ratio of 0.01, a quick ratio of 1.16 and a current ratio of 1.16. The firm’s 50 day moving average is $12.07 and its 200-day moving average is $12.73. The stock has a market capitalization of $2.70 billion, a price-to-earnings ratio of 8.31 and a beta of 0.98.

About Dynex Capital

Dynex Capital, Inc (NYSE: DX) is an internally managed real estate investment trust that invests in mortgage-related assets. The company primarily focuses on agency mortgage-backed securities, including securities backed by the U.S. government or government-sponsored enterprises, as well as selected non-agency residential and commercial mortgage-backed securities.

Dynex Capital uses financing and other investment strategies to generate income from its portfolio of mortgage assets. Its investments are tied primarily to the U.S.