2022 was an extremely bad year for stocks. And this year's, despite January's growth, does not bode well. But dividend stocks are always a good choice for bad times. Could this stock be a good choice for your portfolio?

The Dow Jones Industrial Average $^DJI, the S&P 500 $SPY and the Nasdaq Composite $^NDX have entered a bear market🐻 and posted their worst performance since 2008, down 9%, 19% and 33%, respectively.

However, if there's one investment strategy that tends to do quite well during a bear market, it's buying dividend stocks. Companies that pay a dividend have demonstrated the ability to successfully weather economic downturns and tend to be repeatedly profitable. Best of all, income stocks have a long history of outperforming companies that don't offer a dividend.

Dividend stocks with superior yields may be tempting, but the risk tends to grow with the yield. However, this is not true for all dividend stocks with such high yields. Or does it?

I'm going to focus on a much-loved company today, $AGNC. This is a mortgage real estate investment trust (REIT) that has paid a monthly dividend for 14 years in a row.

The operating model for mortgage REITs tends to be simple. They are businesses that seek to borrow money at low short-term lending rates and use that capital to buy higher-yielding long-term assets. As you may have guessed by the name of the industry (mortgage REIT), these long-term assets are mortgage-backed securities (MBS).

Last year, however, everything that could go wrong for AGNC and its peers did go wrong. With inflation soaring, the Federal Reserve was forced to aggressively raise interest rates. This led to a substantial increase in short-term borrowing costs and an inversion of the Treasury yield curve. This is bad news because it reduces AGNC 's net interest margin , which is the average yield on the assets it owns less the average borrowing rate. Fortunately for AGNC and its investors, the new year should bring a more favorable operating environment. For example, the pace of interest rate increases by the nation's central bank should slow considerably in the first half of 2023.

Although earnings growth is probably the best indicator of a company's financial health, no such thing happens if a business is unable to grow its revenues. After all, it's almost impossible for a company to increase its profits for an extended period of time without increasing its sales. It is therefore important to know the potential revenue growth of a company.

In the case of AGNC, the consensus revenue estimate for the current quarter of USD 293.5 million suggests a year-on-year change of -30.6%. For the current and next fiscal year, the estimates are $1.12 billion and $1.04 billion, respectively. This would be +19.4% and -7.2%, respectively. AGNC reported sales of $25 million in the most recent quarter under review, representing a year-over-year change of -94.3%. Earnings per share of $0.74 for the same period compares to $0.75 a year ago.

While its P/E is quite high, it appears to be trading at a cheaper valuation compared to its peers in the same industry. This could also indicate solid potential.

https://www.youtube.com/watch?v=ox8Dx4q5Vlc

What about you? Do you own AGNC? Or maybe you are considering it?

Disclaimer: This is in no way an investment recommendation. It is purely my summary and analysis based on data from the internet and other sources. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.