Dynex Capital Emerges as Top Pick Amid Government Mortgage Intervention

Analysts at investment bank BTIG have identified mortgage REIT Dynex Capital as their preferred stock to capitalize on a new federal initiative. The firm issued a clear buy recommendation, citing a government plan for state-sponsored enterprises to purchase up to $200 billion in mortgage-backed securities (MBS). This substantial intervention is designed to apply downward pressure on mortgage rates.

In their analysis, BTIG established a $16.00 price target for Dynex Capital shares. The bank's researchers estimate that the company's net asset value (NAV) could see an approximate 8% boost from narrowing MBS spreads. A contraction of 20 basis points was already observable in early Friday trading, a movement that directly benefits Dynex's portfolio holdings.

Dividend and Recent Financials

Coinciding with this strategic reassessment, Dynex Capital distributed its monthly dividend of $0.17 per share. An examination of the most recent quarterly report (Q3 2025) reveals fundamentally robust operations, albeit with mixed specifics. The book value per share was reported at $12.67. Meanwhile, the Earnings Available for Distribution (EAD)—a key metric for dividend coverage—came in at $0.25, just slightly below the consensus estimate of $0.26.

Should investors sell immediately? Or is it worth buying Dynex Capital?

BTIG's current assessment suggests the company's book value stands to gain significantly in the ongoing quarter, driven by the anticipated government action.

First Quarter Prospects

For investors, Dynex Capital now occupies a compelling position, blending consistent dividend income with the potential for substantial portfolio appreciation. The coming weeks will clarify to what extent the forecasted 8% NAV increase materializes during the current quarter and how effectively it is reflected in the share price.