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1. Company Snapshot

1.a. Company Description

Invesco Mortgage Capital Inc.operates as a real estate investment trust (REIT) that primarily focuses on investing in, financing, and managing mortgage-backed securities and other mortgage-related assets.It invests in residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS) that are guaranteed by a U.S. government agency or federally chartered corporation; RMBS and CMBS that are not issued or guaranteed by a U.S. government agency or federally chartered corporation; 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.


Invesco Mortgage Capital Inc.has elected to be taxed as a REIT and would be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.The company was incorporated in 2008 and is headquartered in Atlanta, Georgia.

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1.b. Last Insights on IVR

Invesco Mortgage Capital Inc.'s recent performance was driven by a strong Q3 2025 earnings report, with net income per common share of $0.74 and earnings available for distribution per common share of $0.58. The company's book value per common share increased to $8.41, and economic return was 8.7%. A quarterly dividend of $0.34 per common share was maintained. KLP Kapitalforvaltning AS raised its holdings in the company by 72.5%. The company's shift to agency RMBS with low financing costs, aided by well-timed interest rate swaps, has differentiated its portfolio.

1.c. Company Highlights

2. Invesco Mortgage Capital's Q3 Earnings: A Strong Performance

Invesco Mortgage Capital reported a strong financial performance in Q3, with a book value per common share increasing 4.5% to $8.41 at quarter end. The company's economic return for the quarter was 8.7%, driven by a combination of the increase in book value and a dividend of $0.34. The actual EPS came out at $0.58, slightly higher than estimates of $0.577. The revenue growth is expected to be 17.4% next year, according to analyst estimates.

Publication Date: Nov -30

📋 Highlights
  • Book Value Growth & Economic Return:: Book value per common share rose 4.5% to $8.41, delivering an 8.7% positive economic return with $0.34 dividend.
  • Debt-to-Equity Ratio:: Leverage increased slightly to 6.7% debt-to-equity by quarter-end.
  • Agency RMBS Portfolio Expansion:: Agency RMBS portfolio grew 13% quarter-over-quarter, focused on 4.5–5.5% coupon securities.
  • Levered Returns:: Levered gross returns reached upper teens, with net returns in mid-teens, aligning with dividend-to-book yield.
  • Duration Exposure Strategy:: Model duration slightly long, with $5.2 billion in repurchase agreements for hedging and funding.

Investment Portfolio Performance

The company's Agency RMBS portfolio increased 13% quarter-over-quarter, driven by investments in 4.5% versus 5.5% coupons. The majority of the net purchases were made in these coupons, which provided a beneficial way to hold attractively priced mortgage exposure. As Brian Norris mentioned, "Our levered gross ROEs are in the low double digits and consistent with ROEs and lower coupon Agency RMBS."

Risk Management and Hedging

Invesco Mortgage Capital continues to manage its risk exposure through hedging strategies. The company's net duration exposure is slightly long, and it has a bit more risk towards a rally in interest rates. However, the company prefers interest rate swaps, and it expects swap spreads to continue to normalize. As a result, it plans to move more into treasury futures.

Valuation and Dividend Yield

With a Price-to-Book Ratio of 0.71, Invesco Mortgage Capital's stock is trading at a discount to its book value. The Dividend Yield is 17.32%, which is an attractive return for income-seeking investors. Given the expected revenue growth of 17.4% next year, the current valuation multiples do not appear to fully reflect the company's growth prospects.

Outlook and Investment Strategy

Invesco Mortgage Capital remains constructive on agency mortgages, with a favorable longer-term outlook driven by lower interest rate volatility, a steeper yield curve, and attractive valuations. The company will continue to invest in Agency RMBS and maintain its leverage at book value. As John M. Anzalone mentioned, the company is not currently buying back shares due to the availability of relatively accretive investment opportunities.

3. NewsRoom

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Cetera Investment Advisers Grows Holdings in Invesco Mortgage Capital Inc $IVR

Dec -02

Source: defenseworld.net

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Want $3,500 per Year in Passive Income? Invest Just $2,500 in These Supersized Dividend Stocks

Nov -20

Source: 247wallst.com

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Invesco Mortgage: Betting Against All Odds

Nov -07

Source: seekingalpha.com

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Invesco Mortgage Capital Inc. (IVR) Q3 2025 Earnings Call Transcript

Oct -31

Source: seekingalpha.com

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Invesco Mortgage Capital Inc. Reports Third Quarter 2025 Financial Results

Oct -30

Source: prnewswire.com

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Invesco Mortgage Capital Inc. To Announce Third Quarter 2025 Results

Oct -22

Source: prnewswire.com

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Janney Montgomery Scott LLC Acquires Shares of 6,155 abrdn Physical Silver Shares ETF $SIVR

Oct -22

Source: defenseworld.net

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KLP Kapitalforvaltning AS Raises Position in INVESCO MORTGAGE CAPITAL INC $IVR

Oct -22

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.03%)

6. Segments

Real Estate Investment Trust

Expected Growth: 7.03%

Invesco Mortgage Capital Inc.'s 7.03% growth in Real Estate Investment Trust (REIT) is driven by increasing demand for mortgage-backed securities, expansion into new markets, and strategic acquisitions. Additionally, the company's diversified portfolio, strong asset management, and favorable interest rate environment contribute to its growth.

7. Detailed Products

Residential Mortgage-Backed Securities (RMBS)

Invesco Mortgage Capital Inc. invests in and manages residential mortgage-backed securities, providing financing for homeowners and investors.

Commercial Mortgage-Backed Securities (CMBS)

The company invests in and manages commercial mortgage-backed securities, providing financing for commercial properties and projects.

Agency Residential Mortgage-Backed Securities

Invesco Mortgage Capital Inc. invests in and manages agency residential mortgage-backed securities, guaranteed by government-sponsored entities like Fannie Mae and Freddie Mac.

Non-Agency Residential Mortgage-Backed Securities

The company invests in and manages non-agency residential mortgage-backed securities, providing financing for homeowners and investors.

Commercial Real Estate Debt

Invesco Mortgage Capital Inc. provides financing for commercial real estate projects and properties through commercial real estate debt investments.

8. Invesco Mortgage Capital Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Invesco Mortgage Capital Inc. is medium due to the presence of alternative investment options in the mortgage industry.

Bargaining Power Of Customers

The bargaining power of customers for Invesco Mortgage Capital Inc. is low due to the company's diversified customer base and lack of concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Invesco Mortgage Capital Inc. is medium due to the presence of multiple suppliers in the mortgage industry.

Threat Of New Entrants

The threat of new entrants for Invesco Mortgage Capital Inc. is low due to the high barriers to entry in the mortgage industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Invesco Mortgage Capital Inc. is high due to the competitive nature of the mortgage industry, with multiple players vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 85.07%
Debt Cost 3.95%
Equity Weight 14.93%
Equity Cost 12.83%
WACC 5.27%
Leverage 569.68%

11. Quality Control: Invesco Mortgage Capital Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.4$

Current Price

8.4$

Potential

-0.00%

Expected Cash-Flows