The mortgage REIT is seeing tailwinds in its business. Investors are undoubtedly attracted to mortgage real estate investment trusts, or mREITs, such as Annaly Capital Management (NLY -1.07%), for their high dividend yields. Annaly, for its part, currently sports about a 13.2% yield. Although investors might like these high yields, mREITs can sometimes be difficult to understand. With Annaly recently reporting its third-quarter results, let's look at the key metrics investors should pay attention to when co ...

Core Viewpoint - Annaly Capital Management's high-yielding dividend, over 13%, is at risk as its earnings available for distribution (EAD) are barely covering the dividend payment, indicating potential for future cuts [1][6]. Financial Performance - Annaly reported EAD of $0.66 per share in Q3, slightly above its dividend payment of $0.65 per share, but down from $0.68 in Q2 and flat compared to the previous year [2]. - EAD has declined from $0.89 per share at the end of 2022 to $0.81 in Q1 2023, leading to a series of dividend cuts, including a reduction from $0.88 to $0.65 [2]. Market Conditions - The market for agency mortgage-backed securities (MBS) is improving, benefiting from the Federal Reserve's rate-cutting cycle, which allows Annaly to deploy equity capital effectively [4]. - The CEO indicated optimism regarding the operating environment, expecting strong risk-adjusted returns from their portfolio, particularly in agency MBS, which is projected to yield returns in the 15% to 17% range [4]. Leverage and Future Outlook - Annaly's economic leverage ratio decreased to 5.7 times, down from 5.8 in the previous quarter and 6.4 a year ago, suggesting a more conservative approach that may help maintain dividend coverage [3][5]. - Given the lower leverage and improving market conditions, the company may continue to earn enough to cover its dividend in the near future [5].

Financial Data and Key Metrics Changes - The book value per share increased from $19.25 in the prior quarter to $19.54, reflecting strong performance across all business lines [19] - The company generated an economic return of 4.9% for Q3 and 10.5% year-to-date, with earnings available for distribution exceeding the dividend [7][19] - Average asset yields excluding PAA increased by 11 basis points to 5.25% in Q3, while net interest spread excluding PAA improved by 8 basis points to 1.32% [21][22] Business Line Data and Key Metrics Changes - The Agency MBS portfolio grew by over $4 billion notional, with price appreciation contributing to the increase [8] - The residential credit portfolio ended Q3 at $6.5 billion in economic market value, with a quarter-over-quarter increase of $535 million [11] - The MSR portfolio ended Q3 at $2.8 billion in market value, with a minimal decrease in valuation despite an 80 basis point decline in mortgage rates [14] Market Data and Key Metrics Changes - Interest rate volatility declined to the lowest level since the March 2023 regional banking crisis, supporting the attractiveness of fixed income assets [6] - The market value of all three business lines increased quarter-over-quarter, indicating strong institutional demand [8] - The correspondent channel produced record volumes in Q3, with locks and fundings at $4.4 billion and $2.9 billion, respectively [12] Company Strategy and Development Direction - The company remains optimistic about its business model with the Fed's cutting cycle underway and potential for a soft landing [17] - There is a focus on maintaining a disciplined approach to portfolio management concerning leverage, liquidity, and duration exposure [17] - The company aims to grow its residential credit business while being cautious about credit risk in the current cycle [33] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of managing rate risk amid political uncertainty and market volatility [25][26] - The company is optimistic about the potential for increased bank demand and foreign buyers in the Agency MBS market as the Fed cutting cycle continues [54] - Management expressed confidence in the dividend outlook, expecting modest earnings growth in Q4 compared to Q3 [29][30] Other Important Information - The company raised $1.2 billion of accretive common equity since the beginning of Q3 through its ATM program [7] - The partnership with Rocket Mortgage is expected to enhance competitiveness in purchasing new MSR and improve recapture capabilities [16] Q&A Session Summary Question: How is the company managing rate risk amid political uncertainty? - Management indicated that they entered the quarter with virtually no rate risk and proactively managed the portfolio by selling approximately $2 billion in Agency MBS [25][26] Question: What is the current status of book value? - The book value was reported to be off just over 1% pre-dividend accrual, approximately 0.5% off when considering dividend accrual [28] Question: What is the outlook for the dividend into 2025? - Management feels good about the dividend and expects to earn slightly more in Q4 than in Q3, but will need to assess the Fed's direction before making definitive statements [29][30] Question: How is capital allocation being managed across the three business lines? - Agency MBS appears to be the most attractive for capital allocation currently, but there is a desire to grow the residential credit business as well [32][33] Question: What is the competitive landscape in the non-QM space? - Management believes they are gaining market share and have established deep relationships in the originator community, which positions them well against new entrants [56][59]

Annaly Capital Management, Inc. (NLY) reported third-quarter 2024 adjusted earnings available for distribution (EAD) per average share of 66 cents, which missed the Zacks Consensus Estimate of 67 cents. The reported figure remained unchanged from the year-ago quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.NLY recorded a year-over-year decline in book value per share (BVPS). Nonetheless, the company’s average yield on interest-earning assets improved in the reported quarter. ...

分组1 - Annaly Capital Management reported quarterly earnings of $0.66 per share, missing the Zacks Consensus Estimate of $0.67 per share, representing an earnings surprise of -1.49% [1] - The company posted revenues of $13.4 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 93.68%, compared to year-ago revenues of -$45.33 million [1] - Over the last four quarters, Annaly has surpassed consensus EPS estimates two times but has not beaten consensus revenue estimates [1] 分组2 - Annaly shares have increased by approximately 1.4% since the beginning of the year, while the S&P 500 has gained 22.7% [2] - The current consensus EPS estimate for the coming quarter is $0.68 on $227 million in revenues, and for the current fiscal year, it is $2.67 on $486 million in revenues [4] - The Zacks Industry Rank for REIT and Equity Trust is currently in the bottom 37% of over 250 Zacks industries, indicating potential underperformance compared to the top 50% of ranked industries [5]

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclaimers and disclosures related to the author's position and affiliations [1]. Summary by Categories - **Company Analysis**: No specific company analysis or performance data is provided in the article [1]. - **Industry Insights**: The article lacks any insights or trends related to specific industries [1]. - **Market Trends**: There are no discussions on market trends or investment opportunities mentioned [1].

ANNALY CAPITAL MANAGEMENT, INC. REPORTS 3rd QUARTER 2024 RESULTS NEW YORK—October 23, 2024—Annaly Capital Management, Inc. (NYSE: NLY) ("Annaly" or the "Company") today announced its financial results for the quarter ended September 30, 2024. Financial Highlights • GAAP net income of $0.05 per average common share for the quarter • Earnings available for distribution ("EAD") of $0.66 per average common share for the quarter • Economic return of 4.9% for the third quarter and 10.5% year-to-date through the t ...

Investors will want to consider the following before picking up this ultra-high yield dividend stock.Many income investors may be drawn to Annaly Capital Management (NLY -1.11%) because of its eye-popping dividend, which at the current share price yields more than 13%.Like many real estate investment trusts (REITs), Annaly Capital struggled due to rising interest rates in the past few years. However, the tides may be shifting: In September, the Federal Reserve cut its benchmark interest rate for the first t ...

Annaly Capital could end up a winner if rates keep falling, but dividend investors still shouldn't buy it. Here's what you need to know. Annaly Capital Management (NLY 1.00%) looks like a dividend stock but doesn't act like one. This is hugely important right now as investors assess the potential for additional interest-rate cuts by the Federal Reserve. Lower rates will probably be good for Annaly, but that's only important for investors who are looking for a total-return investment. If you're looking for d ...

Annaly Capital has a huge 13% dividend yield, but don't buy it for the yield because the stock may end up letting you down in the long run. Annaly Capital (NLY 0.96%) is one of those stocks that looks like it is a great choice for a specific type of investor, but is really intended for investors with a different approach. In this case, the ultra high yield of 13% screams dividend stock. But in reality, this mortgage real estate investment trust (REIT) isn't a reliable dividend payer. Here's a deeper dive in ...