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Federal Agricultural Mortgage Corp. (AGM)
NYSE:AGM
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Federal Agricultural
(NYSE:AGM)
63Neutral
Federal Agricultural (AGM) vs. S&P 500 (SPY)
Market Cap
$2.01B
Dividend Yield2.97%
Average Volume (3M)37.73K
Price to Earnings (P/E)11.5
Beta (1Y)1.19
Revenue Growth26.19%
EPS Growth3.95%
CountryUS
Employees191
SectorFinancial
Sector Strength81
IndustryFinancial - Credit Services
Share Statistics
EPS (TTM)16.45
Shares Outstanding9,360,484
10 Day Avg. Volume36,819
30 Day Avg. Volume37,731
Financial Highlights & Ratios
PEG Ratio2.90
Price to Book (P/B)N/A
Price to Sales (P/S)5.56
Price to Cash Flow (P/CF)1.40
P/FCF Ratio1.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$232.50Price Target Upside23.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Federal Agricultural Business Overview & Revenue Model
Company DescriptionFederal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through four segments: Farm & Ranch, USDA (United States Department of Agriculture) Guarantees, Rural Utilities, and Institutional Credit. The Farm & Ranch segment purchases and retains eligible mortgage loans that are secured by first liens on agricultural real estate; securitizes eligible mortgage loans, and guarantees the timely payment of principal and interest on securities representing interests in or obligations secured by pools of mortgage loans; and issues long-term standby purchase commitments (LTSPC) on designated eligible mortgage loans. The USDA Guarantees segment purchases portions of certain agricultural and rural development loans guaranteed by the USDA. The Rural Utilities segment purchases and guarantees securities that are backed by loans for electric or telecommunications facilities by lenders organized as cooperatives to borrowers; and purchases eligible rural utilities loans and guarantees of securities backed by those loans, as well as LTSPCs for pools of eligible rural utilities loans. The Institutional Credit segment guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of loans eligible under the Farmer Mac's Farm & Ranch, USDA Guarantees, or Rural Utilities lines of business. Federal Agricultural Mortgage Corporation was founded in 1987 and is headquartered in Washington, District of Columbia.
How the Company Makes MoneyFarmer Mac makes money primarily through the purchase and securitization of agricultural loans. It earns revenue by charging guarantee and commitment fees for the loans it securitizes or holds in its portfolio. The company also generates income from the interest on loans and mortgage-backed securities it retains. Significant partnerships with agricultural lenders and rural infrastructure providers contribute to its earnings, as these relationships help Farmer Mac maintain a steady flow of loan acquisitions and securitization opportunities. Additionally, it manages a diversified investment portfolio that generates interest income, further contributing to its revenue streams.
Federal Agricultural Financial Statement Overview
Summary
Federal Agricultural shows strong revenue growth and steady profit margins, though rising costs and heavy debt reliance pose financial stability risks. Inconsistent cash flows highlight the need for improved cash management.Income Statement
Federal Agricultural has demonstrated consistent revenue growth over the years, with a notable increase in Total Revenue from $206.9 million in 2020 to $361.99 million in 2024. The company maintains a strong Gross Profit Margin, consistently at 100%, due to the nature of its revenue structure. However, the Net Profit Margin showed a slight decline from 2023 to 2024, indicating higher costs or other expenses. The EBIT margin has shown strength, although there was a dip in 2024. The lack of EBITDA data for recent years limits the comprehensive assessment of operating performance.75
Positive
Balance Sheet
Federal Agricultural exhibits a high Debt-to-Equity Ratio, reflecting significant leverage, which is common in the Credit Finance industry. The Stockholders' Equity has grown, which is a positive sign, yet the Equity Ratio remains low, indicating heavy reliance on debt. Return on Equity (ROE) has fluctuated, showing strong performance in some years but dipping in 2024, suggesting potential risks associated with the high debt levels.65
Positive
Cash Flow
The company's cash flow generation has been inconsistent, with negative Free Cash Flow in certain years. The absence of Operating Cash Flow data for 2024 complicates a full assessment, but previous years show a pattern of fluctuating cash flows. The company needs to stabilize its cash flow to ensure financial flexibility and reduce reliance on external financing.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 361.99M | 346.59M | 309.11M | 238.84M | 206.89M | Gross Profit |
| 361.99M | 349.21M | 308.29M | 238.84M | 206.89M | EBIT |
| 323.75M | 249.49M | 644.42M | 167.61M | 137.43M | EBITDA |
| 0.00 | 0.00 | 645.14M | 0.00 | 137.43M | Net Income Common Stockholders |
| 180.43M | 200.00M | 178.14M | 136.09M | 108.65M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 7.00B | 5.87B | 5.49B | 11.07B | 11.84B | Total Assets |
| 31.32B | 29.52B | 27.33B | 25.15B | 24.36B | Total Debt |
| 27.37B | 27.69B | 25.65B | 23.70B | 23.17B | Net Debt |
| 26.35B | 26.80B | 24.79B | 22.79B | 22.14B | Total Liabilities |
| 29.84B | 28.11B | 26.06B | 23.94B | 23.36B | Stockholders Equity |
| 1.49B | 1.41B | 1.27B | 1.20B | 992.48M |
| Cash Flow | Free Cash Flow | |||
| 607.37M | 375.80M | 809.27M | 436.41M | -94.55M | Operating Cash Flow |
| 612.65M | 375.80M | 809.27M | 436.41M | -94.55M | Investing Cash Flow |
| -1.68B | -1.96B | -3.04B | -1.10B | -1.74B | Financing Cash Flow |
| 1.21B | 1.61B | 2.19B | 534.63M | 2.26B |
Federal Agricultural Technical Analysis
Negative
188.58
Price Trends
196.49
Negative
198.46
Negative
191.15
Negative
Market Momentum
-1.57
Positive
39.86
Neutral
31.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGM, the sentiment is Negative. The current price of 188.58 is below the 20-day moving average (MA) of 194.54, below the 50-day MA of 196.49, and below the 200-day MA of 191.15, indicating a bearish trend. The MACD of -1.57 indicates Positive momentum. The RSI at 39.86 is Neutral, neither overbought nor oversold. The STOCH value of 31.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AGM.
Federal Agricultural Risk Analysis
Federal Agricultural disclosed 25 risk factors in its most recent earnings report. Federal Agricultural reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Federal Agricultural Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $126.29B | 20.62 | 27.91% | 1.29% | -20.93% | -34.33% | |
64 Neutral | $8.64B | 49.96 | 1.47% | 3.08% | -18.79% | -84.24% | |
64 Neutral | $14.24B | 10.27 | 8.97% | 4.33% | 16.38% | -11.94% | |
63 Neutral | $2.01B | 11.47 | 14.28% | 2.97% | 26.19% | 3.95% | |
63 Neutral | $5.27B | 15.57 | 9.02% | 5.50% | -5.36% | -74.25% | |
60 Neutral | $22.99B | 13.11 | 7.78% | 4.20% | -9.01% | -43.53% | |
52 Neutral | $6.98B | 46.40 | -10.11% | 1.17% | -19.08% | -136.41% |
* Financial Sector Average
Performance Comparison
AGM
Federal Agricultural
188.58
3.00
1.62%
AGCO
Agco
93.53
-22.91
-19.68%
ADM
Archer Daniels Midland
47.87
-12.21
-20.32%
DE
Deere
465.31
65.69
16.44%
FMC
FMC
42.21
-18.63
-30.62%
MOS
Mosaic Co
27.25
-4.16
-13.24%
Federal Agricultural Earnings Call Summary
Earnings Call Date: Feb 21, 2025 | % Change Since: -2.86% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong financial performance, record earnings, successful securitization transactions, and growth in key segments like renewable energy and broadband infrastructure. However, there were challenges, including increased operating and credit expenses, specific credit events causing economic losses, and tight credit spreads affecting certain volumes. The highlights significantly outweigh the lowlights, suggesting a robust financial position and strategic growth potential.Highlights
Record Net Effective Spread and Core Earnings
Achieved record net effective spread and core earnings in 2024, driven by consistent loan growth, effective asset liability management, and funding execution.
Successful Securitization Transactions
Successfully closed two $300 million farm securitization transactions, marking the first time two issuances were completed in one year.
Dividend Increase
Announced the fourteenth consecutive annual dividend increase, with a 7% increase in quarterly common stock dividend to $1.50 per share.
Total Revenue Improvement
Total revenues in 2024 improved to $362 million compared to $349 million in 2023, primarily due to higher net effective spread.
Renewable Energy and Broadband Growth
Renewable energy segment nearly doubled each year since 2020 with $1.5 billion in volume. Broadband infrastructure segment grew over $300 million or 60% year over year.
Strong Capital Position
Core capital as of December 31, 2024, was $1.5 billion, exceeding statutory requirements by $583 million or 64%.
Strong Liquidity and Capital Levels
Reported 264 days of liquidity with approximately $1 billion in cash and short-term instruments.
Lowlights
Increased Operating and Credit Expenses
Core earnings in the fourth quarter declined by $1.4 million due to an increase in operating expenses and credit expenses.
Challenges with Credit Events
Incurred an aggregate economic loss of $2.5 million related to a single $14.5 million agricultural storage and processing borrower exposure.
Substandard Asset Volume Increase
Substandard asset volume increased to $440.7 million from $402 million, representing 1.5% of the total outstanding business volume.
Tight Credit Spreads in AgVantage
Credit spreads for investment-grade counterparties remain extremely tight, affecting AgVantage volumes.
Company Guidance
During the Federal Agricultural Mortgage Corporation's fourth-quarter 2024 earnings call, several key metrics and strategic initiatives were highlighted. The company reported a total revenue increase to $362 million in 2024, up from $349 million in 2023, driven by an improved net effective spread and consistent loan growth across farm and ranch, renewable energy, and broadband infrastructure segments. Core earnings reached $172 million, slightly exceeding the previous year's record due to effective asset management and tax credits from renewable energy investments. The company successfully executed two $300 million farm securitization transactions and expanded its renewable energy volume to $1.5 billion by year-end. Additionally, the broadband infrastructure segment grew by $300 million, reflecting a 60% increase year-over-year. The company also announced a 7% increase in its quarterly common stock dividend, raising it to $1.50 per share, and maintained a robust capital position with a Tier 1 capital ratio of 14.2%. Despite some credit challenges, with substandard assets representing 1.5% of the portfolio, the company's overall credit profile remained strong, supported by a $25.3 million allowance for losses. Looking ahead to 2025, the company plans to continue its strategic growth, leveraging its diversified business mix, resilient business model, and strong capital position to navigate market volatility and regulatory changes.Federal Agricultural Corporate Events
Executive/Board Changes
Federal Agricultural Appoints Daniel L. Shaw to Board
Neutral
Mar 26, 2025
On March 26, 2025, Daniel L. Shaw was appointed to the Board of Directors of Farmer Mac, filling the vacancy left by the late Roy H. Tiarks. Mr. Shaw, a seasoned agricultural professional with extensive experience in farming and agribusiness, will serve on several key committees, contributing to Farmer Mac’s strategic and risk management efforts.
Executive/Board ChangesBusiness Operations and Strategy
Farmer Mac Enhances Executive Compensation Strategy
Positive
Mar 12, 2025
On March 6, 2025, Farmer Mac’s Human Capital and Compensation Committee approved increases in the annual base salaries of several executive officers, effective retroactively to January 1, 2025. Additionally, the committee granted stock appreciation rights and restricted stock units to executive officers and directors under the company’s 2008 Omnibus Incentive Plan. These equity awards are designed to align executive compensation with long-term company performance goals. The committee also approved performance-based cash bonuses for the executive officers based on their achievements in 2024. These compensation changes are part of Farmer Mac’s strategy to incentivize leadership and align executive interests with company performance, potentially impacting the company’s operational focus and stakeholder relations.
DividendsFinancial Disclosures
Farmer Mac Reports Strong 2024 Financial Results
Positive
Feb 21, 2025
On February 21, 2025, Farmer Mac announced its financial results for the fiscal year ending December 31, 2024, highlighting an 8% increase in net interest income to $353.9 million and net income attributable to common stockholders rising to $180.4 million. The Board declared a 7% increase in quarterly dividends for common stock, reflecting strong earnings potential and a solid capital position, with a payout set for March 31, 2025.
Executive/Board Changes
Farmer Mac Board Member Roy H. Tiarks Passes Away
Neutral
Feb 7, 2025
On February 7, 2025, Federal Agricultural Mortgage Corporation, known as Farmer Mac, reported the passing of Roy H. Tiarks, a board member since May 2021 and chair of the Enterprise Risk Committee. His tenure included roles in the Business Development and Business Strategy Committee and the Credit Committee. The Board is considering filling the vacancy created by his death before the next stockholders’ meeting in May 2025.
Financial Disclosures
Farmer Mac Schedules Conference Call for Financial Results
Neutral
Feb 6, 2025
On February 6, 2025, Farmer Mac announced the upcoming conference call to discuss its financial results for the fiscal quarter and year ended December 31, 2024. This announcement provides stakeholders an opportunity to gain insights into Farmer Mac’s financial performance and operational strategies impacting its industry positioning.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.