AGNC Dividend Ain't So Bad

Tickers in this article: AGNC DX MFA PMT

NEW YORK (TheStreet) -- American Capital Agency Corp. shares were poised for a rally Wednesday morning as investors digested news about the mortgage real estate investment trust's reduced dividend.

AGNC cut its quarterly dividend to $1.05 per share from the $1.25 it had paid previously, the REIT announced before Tuesday's market close. AGNC shares were flat to lower in late trading Tuesday, finishing the day a penny higher at $25.34.

However, they were up more than 3% in pre-market trading Wednesday.

The dividend cut was "arguably in line with most expectations," according to a report published late Tuesday from Sterne Agee analyst Henry Coffey, who predicted a "snap-back" trade. Longer-term, Coffey's sector favorites are Dynex , MFA Financial and PennyMac .

-- Written by Dan Freed in New York.