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Annaly Capital Management Inc (NLY)
NYSE:NLY
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Annaly Capital
(NYSE:NLY)
62Neutral
Positive Factors
Dividend Yield
An attractive and secure 12.8% dividend yield is noted for NLY.
Earnings Performance
NLY's Q4 earnings surpassed expectations, primarily due to lower funding costs.
Financial Stability
NLY's diversified residential platforms and low leverage position them well to manage through and ultimately take advantage of financial volatility.
Negative Factors
Book Value Decline
Tangible book value per share decreased to $19.13, which is below consensus estimates.
Disproportionate Downside Risk
There is a disproportionate downside for book value if spreads widen further, which could negatively impact stock valuation.
Net Interest Spread
Net interest spread decreased to 1.35% from 1.47% last quarter.
Annaly Capital (NLY) vs. S&P 500 (SPY)
Market Cap
$11.37B
Dividend Yield13.93%
Average Volume (3M)9.45M
Price to Earnings (P/E)21.9
Beta (1Y)1.03
Revenue Growth2.32%
EPS GrowthN/A
CountryUS
Employees191
SectorReal Estate
Sector Strength80
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.72
Shares Outstanding597,555,100
10 Day Avg. Volume7,229,531
30 Day Avg. Volume9,451,197
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap8.46
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit80.20
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.34Price Target Upside5.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Annaly Capital Business Overview & Revenue Model
Company DescriptionAnnaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance and corporate middle market lending. The company invests in agency mortgage-backed securities, mortgage servicing rights, Agency commercial mortgage-backed securities, non-Agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts, and other commercial real estate investments. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was founded in 1996 and is based in New York, New York.
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
19.28
Price Trends
19.67
Negative
19.32
Negative
18.79
Positive
Market Momentum
>-0.01
Negative
52.17
Neutral
25.83
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 19.28 is above the 20-day moving average (MA) of 18.65, below the 50-day MA of 19.67, and above the 200-day MA of 18.79, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 52.17 is Neutral, neither overbought nor oversold. The STOCH value of 25.83 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $6.42B | 17.40 | 5.55% | 10.14% | -0.97% | 3.75% | |
68 Neutral | $5.92B | 9.47 | 9.36% | 8.95% | 26.78% | -19.34% | |
63 Neutral | $3.21B | ― | -2.06% | 10.82% | -20.46% | -1436.71% | |
62 Neutral | $11.37B | 21.89 | 5.44% | 13.93% | 2.32% | ― | |
60 Neutral | $2.81B | 11.39 | 0.21% | 8508.43% | 6.31% | -14.32% | |
60 Neutral | $8.86B | 22.38 | 5.05% | 16.59% | -2.35% | -56.25% | |
48 Neutral | $1.32B | 8.01 | -0.11% | 17.89% | 142.18% | 50.74% |
* Real Estate Sector Average
Performance Comparison
NLY
Annaly Capital
19.28
1.95
11.25%
AGNC
AGNC Investment
8.72
0.40
4.81%
ARR
ARMOUR Residential REIT
16.47
-0.13
-0.78%
BXMT
Blackstone Mortgage
19.01
3.04
19.04%
RITM
Rithm Capital
11.27
0.93
8.99%
STWD
Starwood Property
18.93
0.76
4.18%
Annaly Capital Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -1.63%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with a solid economic return and increased dividend, but also highlighted challenges such as market volatility and pressures on the housing market.Q1-2025 Updates
Positive Updates
Positive Economic Return
The portfolio performed well, delivering a 3% economic return during the quarter. This was achieved despite challenging conditions in March.
Dividend Increase
The common stock dividend was increased to $0.70 per share, underscoring earnings momentum.
Resilience in Residential Credit Sector
The new issue market remained open during significant volatility, and spreads have since tightened from their peak.
HELOC Securitization Success
The OBX securitization platform closed six transactions totaling $3.1 billion, including an inaugural HELOC transaction.
Strong Financial Position
Unencumbered assets totaled $6.3 billion, including $4.7 billion in cash and unencumbered agency MBS.
Negative Updates
Volatility and Spread Widening
Interest rates and financial assets exhibited meaningful volatility following tariff announcements, leading to a widening of agency MBS spreads.
Modest Decline in Book Value
Book value per share was $19.02, representing a modest decline of less than 1% quarter-over-quarter.
Uncertainty in Macro Environment
The shift in U.S. trade policy has weighed on consumer and business confidence and is likely to impact economic growth.
Pressure on Housing Market
Momentum in home price appreciation continues to decrease, with affordability burdening potential borrowers and increased inventory impacting supply and demand dynamics.
Company Guidance
During the first quarter of fiscal year 2025, Annaly Capital Management reported a 3% economic return, with a modest book value decline of less than 1% compared to the previous quarter. The company increased its common stock dividend to $0.70 per share, reflecting strong earnings driven by lower average repo rates of 4.56% and higher coupon income. Annaly’s economic leverage slightly increased to 5.7 turns, while maintaining liquidity with $7.5 billion in total assets available for financing. The agency portfolio allocation increased to 61%, with notable growth in intermediate coupon TBAs. The residential credit portfolio decreased by $340 million due to opportunistic sales and increased securitizations, yet ended the quarter at $6.6 billion in market value. The MSR business remained stable, with a portfolio value of $3.3 billion. Despite market volatility, the company maintained a diversified, liquid, and actively managed portfolio, which has consistently delivered positive economic returns over the past six quarters.Annaly Capital Corporate Events
Private Placements and FinancingDividendsFinancial Disclosures
Annaly Capital Reports Strong Q1 2025 Financial Performance
Positive
Apr 30, 2025
In its First Quarter 2025 earnings release, Annaly Capital Management reported a strong financial performance with an increase in dividend to $0.70 per share and earnings available for distribution at $0.72 per share. The company maintained a robust liquidity position with $7.5 billion in total assets available for financing and continued to grow its portfolio, particularly in Agency MBS. Annaly’s economic leverage increased slightly to 5.7x, and it raised $496 million through its at-the-market sales program. The Residential Credit business expanded its financing capacity by $400 million, and the company remained a leading issuer in the sector.
Spark’s Take on NLY Stock
According to Spark, TipRanks’ AI Analyst, NLY is a Neutral.
Annaly Capital’s overall score reflects a stable financial position and positive earnings call insights, suggesting resilience in a challenging market. Technical analysis shows mixed signals, and the company’s valuation is reasonable with a high dividend yield. The key strengths are financial stability and strategic growth, but revenue volatility and portfolio losses present risks.
To see Spark’s full report on NLY stock, click here.
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.