AGNC Investment (NASDAQ: AGNC) is a prolific dividend stock. The mortgage-focused real estate investment trust (REIT) pays a monthly dividend that currently yields over 14%. That's more than 10 times higher than the S&P 500 (1.3% yield).

The mortgage REIT has paid its monster dividend for 55 months in a row. That's impressive, considering the market conditions it has endured over the past few years. With the environment expected to be much more positive in the future, the REIT's monster dividend looks safe.

Stability amid a more turbulent period

AGNC Investment has a very simple strategy. It invests in agency mortgage-backed securities (MBSes), which are pools of residential mortgages protected from default risk by government agencies like Fannie Mae. Because of that, these fixed-income investments generate very low-risk returns.

Agency MBSes also have relatively low returns (mid to high single digits). The mortgage REIT can boost its returns by using leverage (i.e., borrowing money) to buy more MBSes. It makes money on the spread between its borrowing costs and the yield on its MBS investments. The wider the spread, the more money it can make.

AGNC Investment has made enough money to cover its current dividend payment for the past four and a half years. That's noteworthy because the last few years have been a more challenging period in the MBS market due to the significant surge in interest rates. Higher rates have increased the REIT's borrowing costs, narrowing its investment spread.

However, conditions have never gotten to the point where the REIT felt it needed to cut its dividend, which is something it has had to do several times in the past:

Entering a more positive period

AGNC Investment CEO Peter Federico commented on the ideal market conditions for the REIT in its third-quarter earnings report. He noted, "AGNC's return opportunities are most favorable when agency MBS spreads to benchmark rates are wide and stable and interest rates and monetary policy are less volatile." In other words, stable market conditions are ideal because they provide a lot of visibility into its earnings capability.

For much of the last few years, the Agency MBS market has been more volatile due to all the uncertainty surrounding interest rates. However, with the Federal Reserve recently pivoting its policy from fighting inflation with higher interest rates to a more neutral stance with lower rates, the outlook for the agency MBS market is much better than it has been over the past few years. The REIT believes MBS spreads will stabilize at historically favorable levels over the next one to two years as the Fed slowly cuts rates. That should enable the company to make more than enough money to continue covering its high-yielding dividend.