Shortly after American Capital Ltd. announced its quarterly results, so too did American Capital Agency Corp.
The important figure for ACAS – the NAV growth to $15.71 – is discussed in the article Why American Capital Is Buying American Capital. That article rebuts a thin work at The Motley Fool, which pitches ACAS share buybacks as a waste of shareholder funds. Its evidence? ACAS "can't afford" a dividend. Uh, it can afford share buybacks. The only difference is that shareholders aren't taxed on the NAV increases caused by below-NAV share buybacks, whereas they would be taxed on dividends. Were share price above NAV, the same funds would be directed into dividends under the recently continued (through 2013) dividend/buyback policy first announced last year. News the Fool apparently missed.
At American Capital Agency, NAV grew even more than the dividend over the quarter. Share price was more volatile, but that's of more import to traders than to investors. The key for investors is that the dividend remains safe while management reinvests further earnings with the added boost of some hidden tax deferral.
Meanwhile, American Capital Mortgage Investment Corp. announced its 1Q2012 results. As with AGNC, MTGE grew NAV in an amount exceeding the dividend it paid (net of the dividend payment, so it's like getting the dividend and having them reinvest it for you, both). Article to follow :-)