Federal Agricultural Mortgage Corporation Common Stock (AGM)

FairStock Score: 41/100 — MIXED

Key Financials

Strengths

• Solid return on equity of 12.9% above cost of capital
• Healthy net profit margin of 10.9% showing consistent profitability
• Attractive 3.5% dividend yield providing steady income returns

Concerns

• High leverage at 19.32x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 0.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Federal Agricultural Mortgage Corporation Common Stock is a micro-cap financial services company valued at $1.9 billion. The business generates $372 million in annual revenue with a 10.9% net margin. From a quality standpoint, Federal shows distressed Altman Z-Score of 0.1 warrants caution and adequate 13% ROE. On valuation, the stock is attractively valued at 10.4x earnings, with a modest 28% margin of safety vs Graham Number. Growth dynamics show revenue growing at 6.1% and profit growth of -15.2%. The 3.5% dividend yield adds an income component for patient holders. Our composite FairStock Score of 41/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates Federal's consistent 13% ROE at just 10x earnings—a re-rating toward sector peers could unlock 30-50% upside. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Elevated leverage at 19.3x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer