NYSE:AGM

Stock Analysis Report

Federal Agricultural Mortgage

Executive Summary

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States.

Rewards

Trading at 27.9% below its fair value

Earnings are forecast to grow 10.14% per year

Pays a high and reliable dividend of 4.04%

Risk Analysis

No risks detected for AGM from our risk checks.


Snowflake Analysis

6 star dividend payer and undervalued.


Similar Companies

Share Price & News

How has Federal Agricultural Mortgage's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AGM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.5%

AGM

-4.8%

US Mortgage

-7.6%

US Market


1 Year Return

-8.6%

AGM

1.8%

US Mortgage

10.2%

US Market

Return vs Industry: AGM underperformed the US Mortgage industry which returned 2.2% over the past year.

Return vs Market: AGM underperformed the US Market which returned 10.5% over the past year.


Shareholder returns

AGMIndustryMarket
7 Day3.5%-4.8%-7.6%
30 Day-7.1%-5.2%-4.5%
90 Day-9.8%-7.6%-0.6%
1 Year-5.2%-8.6%4.3%1.8%12.5%10.2%
3 Year43.9%31.8%14.3%6.3%37.1%28.3%
5 Year166.2%132.6%50.2%33.7%60.8%43.2%

Price Volatility Vs. Market

How volatile is Federal Agricultural Mortgage's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Federal Agricultural Mortgage undervalued compared to its fair value and its price relative to the market?

28.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AGM ($69.31) is trading below our estimate of fair value ($96.07)

Significantly Below Fair Value: AGM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AGM is good value based on its PE Ratio (8.8x) compared to the Mortgage industry average (13.4x).

PE vs Market: AGM is good value based on its PE Ratio (8.8x) compared to the US market (17.2x).


Price to Earnings Growth Ratio

PEG Ratio: AGM is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: AGM is overvalued based on its PB Ratio (1.4x) compared to the US Mortgage industry average (1.1x).


Next Steps

Future Growth

How is Federal Agricultural Mortgage forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

6.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AGM's forecast earnings growth (10.1% per year) is above the savings rate (1.7%).

Earnings vs Market: AGM's earnings (10.1% per year) are forecast to grow slower than the US market (13.2% per year).

High Growth Earnings: AGM's earnings are forecast to grow, but not significantly.

Revenue vs Market: AGM's revenue (7.8% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: AGM's revenue (7.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AGM's Return on Equity is forecast to be low in 3 years time (14.7%).


Next Steps

Past Performance

How has Federal Agricultural Mortgage performed over the past 5 years?

18.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AGM has high quality earnings.

Growing Profit Margin: AGM's current net profit margins (47.5%) are lower than last year (50%).


Past Earnings Growth Analysis

Earnings Trend: AGM's earnings have grown by 19.3% per year over the past 5 years.

Accelerating Growth: AGM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AGM had negative earnings growth (-8.6%) over the past year, making it difficult to compare to the Mortgage industry average (10.7%).


Return on Equity

High ROE: AGM's Return on Equity (13.3%) is considered low.


Next Steps

Financial Health

How is Federal Agricultural Mortgage's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: AGM has a low level of unsold assets or inventory.

Debt Coverage by Assets: AGM's debt is not covered by short term assets (assets are 0.4x debt).


Financial Institutions Analysis

Asset Level: AGM's level of assets compared to its equity is very high.

Allowance for Bad Loans: Insufficient data to determine if AGM has a sufficient allowance for bad loans.

Low Risk Liabilities: AGM reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if AGM has an acceptable proportion of non-loan assets held.

Low Risk Deposits: AGM has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if AGM has an appropriate level of bad loans.


Next Steps

Dividend

What is Federal Agricultural Mortgage's current dividend yield, its reliability and sustainability?

3.74%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AGM's dividend (4.04%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: AGM's dividend (4.04%) is in the top 25% of dividend payers in the US market (3.9%)


Stability and Growth of Payments

Stable Dividend: AGM's dividends per share have been stable in the past 10 years.

Growing Dividend: AGM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34%), AGM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AGM's dividends in 3 years are forecast to be well covered by earnings (34% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Brad Nordholm (62yo)

1.3yrs

Tenure

US$560,836

Compensation

Mr. Bradford T. Nordholm also known as Brad has been President and Chief Executive Officer of Federal Agricultural Mortgage Corporation since October 15, 2018. Prior to being appointed as an executive offi ...


CEO Compensation Analysis

Compensation vs Market: Brad's total compensation ($USD560.84K) is below average for companies of similar size in the US market ($USD2.57M).

Compensation vs Earnings: Insufficient data to compare Brad's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Bradford Nordholm
President & CEO1.3yrsUS$560.84kno data
Stephen Mullery
Executive VP7.7yrsUS$868.64k0.15% $1.2m
Brian Brinch
Senior Vice President of Rural Infrastructure1.8yrsUS$475.71k0.069% $547.3k
Aparna Ramesh
Executive VP0.08yrsno datano data
Mario Morais
Vice President of Operations & Technology1.8yrsno datano data
Gregory Ramsey
VP, Controller & Principal Accounting Officer6.3yrsno datano data
Jalpa Nazareth
Director of Investor Relations0yrsno datano data
Megan Murray-Pelaez
Director of Marketing & Communications1.9yrsno datano data
Kerry Willie
Vice President of Human Capital1.7yrsno datano data
Jackson Takach
Chief Economist1.1yrsno datano data

1.8yrs

Average Tenure

52yo

Average Age

Experienced Management: AGM's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Mitchell Johnson
Independent Director22.7yrsUS$118.46k0.096% $766.4k
Lowell Junkins
Vice Chairman0.08yrsUS$844.70k0.066% $521.5k
Dennis Brack
Independent Director18.7yrsUS$124.28k0.061% $483.2k
Sara Faivre-Davis
Independent Director9.4yrsUS$118.46k0.040% $317.4k
Clark Maxwell
Independent Director11.7yrsUS$118.46k0.26% $2.1m
James Engebretsen
Independent Director11.7yrsUS$118.46k0.051% $405.4k
Richard Davidson
Independent Director9.7yrsUS$128.46k0.096% $763.7k
Myles Watts
Director9.4yrsUS$138.46k0.12% $937.4k
Bruce Sherrick
Independent Director7.8yrsUS$130.46k0.11% $856.8k
LaJuana Wilcher
Chairman0.08yrsno data0.0015% $11.7k

9.5yrs

Average Tenure

66yo

Average Age

Experienced Board: AGM's board of directors are considered experienced (9.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Federal Agricultural Mortgage Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Federal Agricultural Mortgage Corporation
  • Ticker: AGM
  • Exchange: NYSE
  • Founded: 1987
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Market Cap: US$794.662m
  • Shares outstanding: 10.71m
  • Website: https://www.farmermac.com

Number of Employees


Location

  • Federal Agricultural Mortgage Corporation
  • 1999 K Street, NW
  • 4th Floor
  • Washington
  • District Of Columbia
  • 20006
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AGM.ANYSE (New York Stock Exchange)Class A Common StockUSUSDDec 1993
AGMNYSE (New York Stock Exchange)YesClass C Common StockUSUSDJan 1994
A35DB (Deutsche Boerse AG)YesClass C Common StockDEEURJan 1994
AGM.PRANYSE (New York Stock Exchange)PFD A 5.875%NONUSUSDJan 2013
AGM.PRCNYSE (New York Stock Exchange)PFD C FIX TO FLTUSUSDJun 2014
AGM.PRDNYSE (New York Stock Exchange)5.7% NCUM PFD DUSUSDMay 2019

Biography

Federal 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 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, rural development, business and industry, and community facilities loans guaranteed by the United States Department of Agriculture (USDA). The Rural Utilities segment purchases and guarantees securities that are backed by eligible rural utilities loans; and issues LTSPCs for pools of eligible rural utilities loans. The Institutional Credit segment engages in purchasing and guaranteeing general obligations of lenders that are secured by pools of loans eligible under the 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/27 00:50
End of Day Share Price2020/02/26 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.