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Annaly Capital Management Inc (NLY)
NYSE:NLY
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Annaly Capital
(NYSE:NLY)68Neutral
Positive Factors
Dividend Yield
An attractive and secure 13.6% dividend yield.
Earnings Performance
NLY's Q4 earnings surpassed expectations, primarily due to lower funding costs.
Negative Factors
Tangible Book Value
Tangible book value per share decreased to $19.13, which is below consensus estimates.
Annaly Capital (NLY) vs. S&P 500 (SPY)
Market Cap
$12.38B
Dividend Yield12.14%
Average Volume (3M)7.98M
Price to Earnings (P/E)13.2
Beta (1Y)1.32
Revenue Growth13.33%
EPS GrowthN/A
CountryUS
Employees191
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)1.58
Shares Outstanding578,357,900
10 Day Avg. Volume10,249,917
30 Day Avg. Volume7,976,670
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)33.24
Price to Cash Flow (P/CF)1.10
P/FCF Ratio0.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.07Price Target Upside-2.86% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Annaly Capital Business Overview & Revenue Model
Company DescriptionAnnaly Capital Management, Inc. engages in the investment and financing of residential and commercial assets. It operates through the following investment groups: Agency, Residential Credit, Commercial Credit, and Middle Market Lending. The Agency group invests in agency mortgage-backed securities. The Residential Credit group involves non-agency residential mortgage assets within securitized products and whole loan markets. The Commercial Real Estate group includes commercial mortgage, loans, securities, and other commercial real estate debt, and equity investments. The Middle Market Lending group provides financing to private equity backed middle market businesses across the capital structures. The company was founded by Michael A. J. Farrell and Wellington Jamie Denahan-Norris on November 25, 1996 and is headquartered in New York, NY.
How the Company Makes MoneyAnnaly Capital makes money primarily through its investments in mortgage-backed securities (MBS) and other real estate-related assets. The company generates revenue by earning interest income on its investment portfolio, which includes both agency MBS guaranteed by government-sponsored enterprises and non-agency MBS that carry more credit risk. Annaly employs a strategy of leveraging its equity to acquire assets, thus enhancing the potential returns through its use of borrowed funds. The company also engages in hedging activities to manage interest rate risk. Additionally, Annaly earns income from its commercial real estate and middle market lending operations, which involve providing financing solutions to businesses and property owners. Key factors contributing to Annaly's earnings include the interest rate environment, housing market trends, and the performance of its diverse investment portfolio.
Annaly Capital Financial Statement Overview
Summary
Annaly Capital's financials reflect mixed performance. The income statement shows volatility and signs of recovery, while the balance sheet exhibits strong financial stability with no debt. Cash flow is robust but shows volatility in capital movements. Overall, improved net income and reduced debt are positive, but revenue consistency needs careful monitoring.Income Statement
The income statement shows significant volatility in total revenue over the years, with a notable negative revenue in 2023. However, net income has rebounded positively in 2024, indicating a potential turnaround. Despite this, the absence of gross profit, EBIT, and EBITDA data for recent years limits a full analysis of profitability.40
Negative
Balance Sheet
The balance sheet displays a strong equity position, with increasing stockholders' equity from 2023 to 2024. The debt-to-equity ratio is favorable as total debt is zero in 2024, suggesting reduced leverage risk. The equity ratio is consistent, highlighting good financial stability with substantial asset backing.75
Positive
Cash Flow
Cash flow analysis indicates a strong operating cash flow in 2024, with significant free cash flow growth from 2023. The company effectively manages its cash flow, though fluctuations in investing and financing cash flows suggest some volatility in capital allocation strategies.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.20B | -1.40B | 1.95B | 2.66B | -584.73M | Gross Profit |
| 1.20B | -1.18B | 1.93B | 2.64B | -607.43M | EBIT |
| -5.65B | 0.00 | 3.06B | 2.39B | -919.59M | EBITDA |
| 0.00 | 0.00 | 3.14B | 2.95B | 0.00 | Net Income Common Stockholders |
| 1.00B | -1.64B | 1.73B | 2.39B | -889.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.49B | 1.41B | 1.58B | 1.34B | 1.24B | Total Assets |
| 103.56B | 93.23B | 81.85B | 76.76B | 88.46B | Total Debt |
| 21.45B | 13.20B | 8.80B | 7.11B | 7.04B | Net Debt |
| 21.16B | 12.93B | 7.22B | 5.77B | 5.79B | Total Liabilities |
| 90.86B | 81.88B | 70.48B | 63.57B | 74.43B | Stockholders Equity |
| 12.61B | 11.26B | 11.27B | 13.17B | 14.01B |
| Cash Flow | Free Cash Flow | |||
| 3.31B | 1.97B | 4.36B | 2.54B | -32.15B | Operating Cash Flow |
| 3.31B | 2.37B | 5.37B | 3.08B | 527.97M | Investing Cash Flow |
| -14.98B | -8.42B | -14.53B | 4.90B | 40.35B | Financing Cash Flow |
| 11.75B | 5.88B | 9.39B | -7.88B | -41.49B |
Annaly Capital Technical Analysis
Positive
21.69
Price Trends
19.92
Positive
19.44
Positive
18.97
Positive
Market Momentum
0.50
Positive
64.13
Neutral
39.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NLY, the sentiment is Positive. The current price of 21.69 is above the 20-day moving average (MA) of 21.30, above the 50-day MA of 19.92, and above the 200-day MA of 18.97, indicating a bullish trend. The MACD of 0.50 indicates Positive momentum. The RSI at 64.13 is Neutral, neither overbought nor oversold. The STOCH value of 39.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NLY.
Annaly Capital Risk Analysis
Annaly Capital disclosed 82 risk factors in its most recent earnings report. Annaly Capital reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Annaly Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $9.36B | 10.99 | 9.58% | 14.09% | 384.69% | 963700.00% | |
68 Neutral | $12.38B | 13.21 | 8.40% | 12.14% | 13.33% | ― | |
62 Neutral | $1.44B | 5.82 | 11.86% | 13.04% | 28.33% | ― | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $1.08B | 12.88 | 6.35% | 13.30% | 26.34% | 79.07% | |
58 Neutral | $527.79M | 13.23 | 8.19% | 18.71% | 137.36% | ― | |
52 Neutral | $1.42B | 8.01 | -1.09% | 15.53% | -46.65% | 76.86% |
* Real Estate Sector Average
Performance Comparison
NLY
Annaly Capital
21.69
4.71
27.74%
AGNC
AGNC Investment
10.29
2.02
24.43%
ARR
ARMOUR Residential REIT
18.69
2.03
12.18%
IVR
Invesco Mortgage
8.61
1.10
14.65%
MFA
MFA Financial
10.63
0.84
8.58%
TWO
Two Harbors
13.93
2.79
25.04%
Annaly Capital Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: 9.77% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong economic returns and growth in key segments such as Residential Credit and MSR portfolios. The increase in earnings available for distribution and successful capital raising were also positive aspects. However, the decrease in book value per share and losses in certain portfolios were notable challenges.Highlights
Strong Economic Return
Annaly Capital Management reported an economic return of 1.3% for Q4 2024 and 11.9% for the full year, highlighting the strength and diversity of their portfolio in volatile fixed income markets.
Increase in Earnings Available for Distribution
Earnings available for distribution rose $0.06 to $0.72 per share, driven by lower financing costs and a steepening yield curve.
Successful Capital Raising
Annaly raised over $400 million of accretive common equity in Q4, bringing the total capital raised in 2024 to $1.6 billion.
Growth in Residential Credit Portfolio
The Residential Credit portfolio grew approximately $500 million quarter-over-quarter, with a focus on organic strategy and whole loan and retained OBX assets.
MSR Portfolio Growth
The MSR portfolio ended the fourth quarter at $3.3 billion in market value, representing a roughly 25% increase year-over-year.
Lowlights
Decrease in Book Value Per Share
Book value per share decreased 2% from $19.54 in the prior quarter to $19.15.
Losses on Agency and Residential Credit Portfolios
Annaly incurred losses on their Agency MBS portfolio of $4.14 per share and on their Residential Credit portfolio of $0.26 per share.
Company Guidance
During the Q4 2024 Annaly Capital Management earnings call, the company reported an economic return of 1.3% for the quarter and a full-year return of 11.9%, highlighting the strength of its diversified housing finance portfolio. The firm’s economic leverage decreased to 5.5x, driven by increased capital deployment in the lower-levered credit and mortgage servicing rights (MSR) businesses. Earnings available for distribution rose to $0.72 per share, supported by lower financing costs and a steepening yield curve. Annaly raised over $400 million in common equity in Q4, totaling $1.6 billion for the year. The Agency MBS portfolio ended the year with a market value of $71 billion, while the Residential Credit portfolio grew to $7 billion. The MSR business saw a 25% year-over-year increase, ending Q4 with a market value of $3.3 billion. The company remains optimistic about its strategies and anticipates continued growth in 2025, with a focus on maintaining a conservative hedge profile amidst ongoing market volatility.Annaly Capital Corporate Events
Business Operations and StrategyFinancial Disclosures
Annaly Capital Reports Strong Economic Return in 2024
Positive
Jan 29, 2025
In its Fourth Quarter 2024 earnings release, Annaly Capital Management reported an economic return of approximately 12% for the year, with earnings exceeding dividends. The company maintained strong leverage and liquidity, with a total portfolio value of $80.9 billion, primarily in Agency MBS and residential credit. Annaly’s strategic focus on high-coupon securities and expansion in financing capacity has bolstered its position as a leading issuer of Prime Jumbo and Expanded Credit MBS, reflecting robust performance across its diversified investment strategies.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.