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Invesco Mortgage Capital Inc (IVR)
NYSE:IVR
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Invesco Mortgage
(NYSE:IVR)58Neutral
Invesco Mortgage (IVR) vs. S&P 500 (SPY)
Market Cap
$527.79M
Dividend Yield18.71%
Average Volume (3M)1.18M
Price to Earnings (P/E)13.2
Beta (1Y)1.56
Revenue Growth137.36%
EPS GrowthN/A
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.65
Shares Outstanding61,729,694
10 Day Avg. Volume1,310,356
30 Day Avg. Volume1,181,579
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.69
Price to Cash Flow (P/CF)2.20
P/FCF Ratio2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.00Price Target Upside-7.08% Downside
Rating ConsensusHold
Number of Analyst Covering2
Invesco Mortgage Business Overview & Revenue Model
Company DescriptionInvesco Mortgage Capital, Inc. is a holding company, which engages in investing, financing and managing residential and commercial mortgage-backed securities and mortgage loans. The firm primarily invests in the following: residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS), non-agency RMBS, non-agency CMBS, credit risk transfer securities that are unsecured obligations issued by government-sponsored enterprises, residential and commercial mortgage loans, and other real estate-related financing arrangements. The company was founded on June 5, 2008 and is headquartered in Atlanta, GA.
How the Company Makes MoneyInvesco Mortgage Capital makes money primarily through the interest income generated from its portfolio of mortgage-backed securities and mortgage loans. The company's revenue model involves acquiring high-quality mortgage-backed securities, both residential and commercial, and earning the spread between the interest income on these securities and the cost of borrowing to finance them. By utilizing leverage, Invesco Mortgage Capital seeks to enhance its returns on equity. The company also engages in active portfolio management to optimize its asset mix and manage interest rate risks. In addition to interest income, the company may realize gains or losses from the sale of securities within its portfolio. Key factors contributing to its earnings include the performance of the housing and commercial real estate markets, interest rate trends, and government policies affecting mortgage financing.
Invesco Mortgage Financial Statement Overview
Summary
Invesco Mortgage shows moderate financial health with stable cash flow management and a relatively low debt-to-equity ratio. However, the income statement reflects significant revenue and profit volatility, posing risks to financial stability.Income Statement
The income statement shows significant fluctuations in total revenue and profitability over recent years. Notably, revenue recovered in 2024 compared to previous years, but the company still reported a net income of zero, indicating challenges in achieving profitability. The gross profit margin is 100% in 2024, which is unusual and suggests potential accounting adjustments or unique revenue recognition practices. The overall lack of consistent profitability and revenue volatility poses a risk to financial stability.25
Negative
Balance Sheet
Invesco Mortgage's balance sheet shows a relatively low debt-to-equity ratio in 2024 due to zero reported total debt, which is a positive indicator. However, the equity ratio is 12.85%, pointing to modest equity backing for the assets. The company's financial health has improved from earlier years, but the overall balance sheet strength is moderate, given the historical volatility in liabilities and equity.55
Neutral
Cash Flow
The cash flow analysis reveals a stable operating cash flow, which is a positive sign of operational efficiency. Free cash flow has shown a decline in 2024 compared to 2023, but still remains positive, indicating some level of financial resilience. The company's ability to generate operating cash flow despite net income challenges suggests effective cash management, although growth in free cash flow remains a concern.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 286.55M | 4.19M | 194.51M | -63.41M | -1.65B | Gross Profit |
| 286.55M | 4.19M | 177.61M | -126.81M | -3.30B | EBIT |
| 0.00 | 0.00 | -351.36M | -90.00M | -1.67B | EBITDA |
| 0.00 | 0.00 | 0.00 | -101.54M | -1.48B | Net Income Common Stockholders |
| 59.88M | -15.86M | -454.48M | -90.00M | -1.67B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 73.40M | 76.97M | 175.53M | 357.13M | 148.01M | Total Assets |
| 5.69B | 5.28B | 5.10B | 8.44B | 8.63B | Total Debt |
| 0.00 | 4.46B | 4.23B | 6.99B | 7.23B | Net Debt |
| -73.40M | 4.26B | 4.06B | 6.63B | 7.08B | Total Liabilities |
| 4.96B | 4.50B | 4.29B | 3.06M | 2.27M | Stockholders Equity |
| 730.73M | 782.66M | 804.08M | 1.40B | 1.37B |
| Cash Flow | Free Cash Flow | |||
| 183.16M | 237.79M | 196.08M | 152.29M | 170.46M | Operating Cash Flow |
| 183.16M | 237.79M | 196.08M | 152.29M | 170.46M | Investing Cash Flow |
| -497.43M | -536.80M | 2.42B | 120.75M | 11.55B | Financing Cash Flow |
| 326.51M | 218.87M | -2.92B | -88.57M | -11.62B |
Invesco Mortgage Technical Analysis
Positive
8.61
Price Trends
8.32
Positive
8.14
Positive
8.13
Positive
Market Momentum
0.10
Positive
50.97
Neutral
17.72
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IVR, the sentiment is Positive. The current price of 8.61 is below the 20-day moving average (MA) of 8.71, above the 50-day MA of 8.32, and above the 200-day MA of 8.13, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 50.97 is Neutral, neither overbought nor oversold. The STOCH value of 17.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IVR.
Invesco Mortgage Risk Analysis
Invesco Mortgage disclosed 83 risk factors in its most recent earnings report. Invesco Mortgage 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
Invesco Mortgage Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.36B | 10.99 | 9.58% | 14.09% | 384.69% | 963700.00% | |
68 Neutral | $12.38B | 13.21 | 8.40% | 12.14% | 13.33% | ― | |
62 Neutral | $1.44B | 5.82 | 13.74% | 13.04% | 28.33% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $1.08B | 12.88 | 6.35% | 13.30% | 26.34% | 79.07% | |
58 Neutral | $527.79M | 13.23 | 8.19% | 18.71% | 137.36% | ― | |
52 Neutral | $1.42B | 8.01 | -1.09% | 15.53% | -46.65% | 76.86% |
* Real Estate Sector Average
Performance Comparison
IVR
Invesco Mortgage
8.61
1.10
14.65%
AGNC
AGNC Investment
10.29
2.02
24.43%
NLY
Annaly Capital
21.69
4.71
27.74%
ARR
ARMOUR Residential REIT
18.69
2.03
12.18%
MFA
MFA Financial
10.63
0.84
8.58%
TWO
Two Harbors
13.93
2.79
25.04%
Invesco Mortgage Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -3.91% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Invesco Mortgage Capital Inc. While there were improvements in the capital structure and a positive start to 2025, the company faced challenges with a negative economic return and a decline in earnings. The underperformance of agency RMBS also contributed to the cautious sentiment around future performance.Highlights
Improvement in Capital Structure
Invesco Mortgage Capital notably improved its capital structure and reduced its cost of capital by funding the redemption of Series E preferred stock in December with lower-cost repurchase agreements. This resulted in an increase in the debt-to-equity ratio to 6.7 times at the end of the fourth quarter, up from 6.1 times at the end of the third quarter.
Positive Start to 2025
The company reported a modestly positive start to 2025 with interest rate volatility stabilizing and the market's outlook for future monetary policy coalescing around one or two additional cuts in the FOMC this year. Book value per common share increased approximately 2% excluding the dividend approval.
Selective Capitalization on Agency RMBS
Invesco Mortgage Capital continues to capitalize on historically attractive agency RMBS spreads, which are poised to perform well as interest rate volatility continues to moderate.
Lowlights
Negative Economic Return
The company reported a negative economic return of 0.5% for the fourth quarter, with a decrease in book value per common share by 4.8% to $8.92 per share.
Earnings Decline
Earnings available for distribution declined from $0.68 in the third quarter to $0.53 in the fourth quarter due to a one-time charge associated with the redemption of Series B preferred stock.
Underperformance of Agency RMBS
Agency RMBS underperformed treasury during the fourth quarter, primarily in lower coupons as a sharp move higher in interest rates limited demand for discount securities.
Company Guidance
During the Invesco Mortgage Capital Inc. Fourth Quarter 2024 Earnings Call, the company presented several key metrics and guidance. The book value per common share decreased by 4.8% to $8.92, contributing to a negative economic return of 0.5% for the quarter, despite a $0.40 per share dividend. As of February 14, 2025, the estimated book value per share was between $8.90 and $9.26. The debt-to-equity ratio rose to 6.7 times due to the redemption of Series E preferred stock and increased repurchase agreements, while 85% of the $5.4 billion investment portfolio was in agency mortgages. Earnings available for distribution fell from $0.68 to $0.53, affected by a one-time charge from redeeming Series B preferred stock. The company also increased its hedge ratio from 83% to 95% and maintained a robust liquidity position with $389 million in unrestricted cash and unencumbered investments. Looking forward, Invesco Mortgage Capital Inc. remains cautiously optimistic about agency RMBS given current valuations and anticipated demand improvements, while also expecting a gradual increase in agency CMBS issuance met with strong investor demand.Invesco Mortgage Corporate Events
Delistings and Listing ChangesBusiness Operations and Strategy
Invesco Mortgage: Termination and Stock Reclassification Events
Neutral
Dec 27, 2024
Invesco Mortgage Capital Inc. announced the termination of its Equity Distribution Agreement, which allowed the company to offer and sell preferred stocks through an agent. The company did not sell any shares under this agreement and faces no penalties for the termination. Additionally, the company redeemed all outstanding shares of its Series B Preferred Stock, reclassifying the authorized but unissued shares to Preferred Stock without designation and completing the redemption on December 27, 2024.
Executive/Board ChangesDividends
Invesco Mortgage Appoints CFO and Declares Dividend
Positive
Dec 19, 2024
Invesco Mortgage Capital Inc. announced the appointment of Mark Gregson as Chief Financial Officer, effective December 19, 2024, after serving as Interim CFO since October 7, 2024. Gregson’s extensive experience with Invesco, including his role as Global Controller, positions him well for this leadership role. Additionally, the company’s Board of Directors declared a cash dividend of $0.40 per share for the fourth quarter of 2024, to be paid on January 24, 2025, signaling continued shareholder returns.
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.