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Dynex Capital Inc . (NYSE:DX), a real estate investment trust based in Glen Allen, Virginia, with a market capitalization of $1.43 billion, has announced a change in its independent registered public accounting firm.
According to InvestingPro data, the company maintains a significant 14.57% dividend yield and has consistently paid dividends for 17 consecutive years, though analysis suggests the stock is currently overvalued based on Fair Value estimates.
The company's Audit Committee and Board of Directors have made the decision to appoint Ernst & Young LLP (EY) as their new auditor for the fiscal year ending December 31, 2025. This change is subject to the completion of EY's standard client acceptance procedures and the execution of an engagement letter.
The transition from the former auditor, BDO USA, P.C., will be effective upon the completion of BDO's audit of the company's consolidated financial statements for the fiscal year ending December 31, 2024, and the filing of Dynex Capital's 2024 Annual Report on Form 10-K.
InvestingPro subscribers can access comprehensive financial health metrics, which currently show a FAIR overall rating for Dynex Capital, with notable concerns about its current ratio of 0.07 indicating potential liquidity challenges.
According to the company's SEC filing, BDO's reports on the financial statements for the years ended December 31, 2023, and 2022 were free of any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the fiscal years ended December 31, 2023, and 2022, and the subsequent interim periods through December 18, 2024, there were no disagreements between Dynex Capital and BDO on matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure that would have required a mention in BDO's reports.
In compliance with SEC regulations, Dynex Capital has provided BDO with the disclosures made in the current report and has included a letter from BDO, dated December 19, 2024, in its Form 8-K filing, agreeing with the statements made by the company.
Before the appointment of EY, Dynex Capital had not consulted with EY on any accounting principles or transactions, nor had there been any disagreements or reportable events as defined by SEC regulations.
This announcement, based on a press release statement, indicates a significant change in Dynex Capital's financial oversight as the company moves forward with a new auditor for the upcoming fiscal year.
For deeper insights into Dynex Capital's financial health and future prospects, investors can access detailed analysis and additional ProTips through InvestingPro's comprehensive research reports, available for over 1,400 US equities.
In other recent news, Dynex Capital has been making significant strides in its financial performance and strategic initiatives. The real estate investment trust recently expanded its at-the-market equity offering program, increasing the number of shares available for sale to a total of 69,353,243, with 35,468,000 shares still available for issuance.
Janney Montgomery Scott LLC, Keefe, Bruyette & Woods, Inc., RBC Capital Markets, LLC, UBS Securities LLC, and Wells Fargo (NYSE:WFC) Securities, LLC have been added as additional sales agents for the offering.
Dynex Capital's third-quarter financial performance showcased a 7% economic return and a 6.5% return year-to-date, leading to a 15% increase in its common dividend from $0.13 to $0.15 per share. The company also raised $56 million in new capital and reported a book value of $13 per share. Executives attributed this positive performance to a favorable investment environment characterized by declining funding costs and a steeper yield curve.
Management, including Byron Boston and Smriti Popenoe, expressed optimism for the company's performance in 2025, anticipating a terminal Fed funds rate between 3% and 4%, and mortgage rates ranging from 5% to 7%. Despite increased expenses, mainly due to performance-based compensation and potential realized hedge losses, the team remains confident in its investment strategy. These are all recent developments, providing a snapshot of Dynex Capital's current state and future outlook.
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