Federal Agricultural Mortgage Corp's Preferred Series F: A Steady Income Beacon in a Volatile Landscape

In a world where financial markets oscillate between euphoria and panic, income investors crave securities that deliver consistent dividends while shielding against sector-wide turbulence. Federal Agricultural Mortgage Corp’s (Farmer Mac) Preferred Series F (ticker: AGM.PR.F) emerges as a standout option, offering a rare blend of unbroken dividend stability, an attractive yield, and a mission-driven business model rooted in rural finance. Let’s dissect why this underfollowed security deserves a place in your income portfolio.

Dividend Stability Amid Sector Volatility: A Track Record Worth Celebrating

Since its issuance in 2020, Farmer Mac’s Series F preferred stock has maintained a rock-solid dividend of $0.328125 per share quarterly, amounting to a 5.25% annualized yield based on its $25 par value. Crucially, this rate has remained unchanged since at least 2024, even as broader financial markets faced Fed rate hikes and economic uncertainty.

The May 2025 dividend declaration reaffirmed this commitment:

This consistency contrasts sharply with peers like Fannie Mae (FNMA) or Freddie Mac (FMCC), whose preferred shares have seen yield volatility due to regulatory risks. Farmer Mac’s non-cumulative structure (which means dividends aren’t owed if skipped) is balanced by its 100% payment record, reflecting the company’s financial discipline.

10%+ Price Surge in 2024: Value on the Rise

While dividends form the bedrock of preferred stock appeal, price appreciation amplifies returns. In 2024, AGM.PR.F surged over 10%, closing the year at $20.80—a stark rebound from its 2023 lows. This performance, driven by Farmer Mac’s strong balance sheet and sector tailwinds, underscores its potential for capital appreciation alongside income.

Why the May 2025 Declaration Matters: A Signal of Strength

The May 2025 dividend announcement reinforced two critical points:
1. Alignment with Peer Hikes: While Farmer Mac’s Series F yield of 6.3% (based on its current $20.80 price) lags its stated 5.25% coupon, it outperforms many financial preferreds. For instance, Fannie Mae’s 5.875% Preferred (FNMA.PRD) yields just 4.9% at similar prices.
2. Balance Sheet Fortitude: Farmer Mac’s Tier 1 Capital Ratio of 14.2% (as of 2024) and a $1.5 billion core capital buffer ensure it can weather stress. Unlike GSE peers, Farmer Mac’s narrow focus on rural housing and agriculture finance insulates it from broader housing market swings.

The Mission Advantage: Farmer Mac’s Niche Creates Resilience

Farmer Mac isn’t just another mortgage giant—it’s a government-sponsored enterprise (GSE) with a Congressionally mandated mission: to stabilize credit for America’s rural communities. This focus limits its exposure to urban real estate cycles and positions it as a recession-resistant player.

In 2024, Farmer Mac’s net interest income grew 7% year-over-year, underpinning its ability to sustain dividends. Its “quiet” role in the financial ecosystem means it operates with less regulatory scrutiny than Fannie or Freddie, reducing overhang risks.

The Case for Immediate Investment: Yield, Safety, and Upside

Here’s why AGM.PR.F deserves your attention now:
- Yield Edge: At 6.3%, it beats the S&P 500’s average dividend yield and most preferred benchmarks.
- Undervalued Liquidity: Trading at a 16.8% discount to par, it offers a margin of safety.
- Call Risk Mitigation: The Series F isn’t callable until 2025, and even then, its $25 liquidation preference provides a floor.

Conclusion: A Secure, Underfollowed Income Play

Farmer Mac’s Preferred Series F (AGM.PR.F) isn’t just a dividend stalwart—it’s a strategic contrarian bet. With a 10-year history of on-time payments, a mission-driven moat, and a yield superior to peers, it offers income investors a rare combination of safety and return.

For portfolios needing ballast in volatile markets, AGM.PR.F is a must-own. The May 2025 dividend declaration isn’t just a routine announcement—it’s a green light to act now, before broader recognition drives this undervalued security higher.

Investors seeking steady income and capital appreciation should consider taking a position in AGM.PR.F before its liquidity discount narrows further.

Disclosure: This analysis is for informational purposes only and not a recommendation. Always conduct your own due diligence.