Core Viewpoint - Annaly Capital Management (NLY) presents a more attractive investment opportunity compared to Arbor Realty Trust, Inc. (ABR) due to its stronger liquidity, sustainable dividend, and positive financial outlook, while ABR faces significant risks and challenges [1][19]. Group 1: Annaly Capital Management (NLY) - NLY is focused on improving liquidity and reducing leverage, with total assets available for financing amounting to $7.5 billion, including $4.7 billion in cash and unencumbered Agency mortgage-backed securities (MBS) [2]. - The company has a monthly dividend yield of 14.9% and a payout ratio of 101%, with a recent cash dividend increase of 7.7% to 70 cents per share, indicating confidence in cash flow and growth prospects [3]. - NLY's investment strategy includes traditional Agency MBSs for downside protection and investments in non-agency and credit-focused asset classes to enhance returns, supported by a scaled mortgage servicing rights (MSR) platform [4]. - As of March 31, 2025, NLY's investment portfolio totaled $84.9 billion, and the company expects book value improvement as mortgage rates decline, which will enhance net interest spread and overall yield [5][6]. - The Zacks Consensus Estimate for NLY's 2025 and 2026 sales indicates year-over-year increases of 492.8% and 13.2%, respectively, with earnings expected to rise by 6.3% and 1.4% in the same periods [13]. Group 2: Arbor Realty Trust, Inc. (ABR) - ABR focuses on originating and servicing loans for multi-family, single-family, and commercial real estate assets, with expectations of improved mortgage originations as housing affordability challenges decline [7]. - The current dividend yield for ABR is 12.66%, but the company recently reduced its dividend by 30.3% to 30 cents per share, reflecting concerns over its weak liquidity position, which includes cash and cash equivalents of $508 million against long-term debt of $4.8 billion [8]. - ABR has significant exposure to multi-family loans, with seven non-performing loans totaling $196.7 million foreclosed in the first quarter of 2025, indicating credit risk [9]. - The Zacks Consensus Estimate for ABR's 2025 sales suggests a year-over-year decline of 17.9%, with earnings expected to fall by 32.2% in the same year, although a slight recovery is anticipated in 2026 [17].

Core Viewpoint - Annaly Capital Management (NLY) has reached a significant support level and shows potential for investors from a technical perspective, particularly after breaking through the 200-day moving average, indicating a long-term bullish trend [1]. Technical Analysis - The 200-day simple moving average is a useful tool for determining long-term market trends and serves as a support or resistance level [2]. - NLY has experienced an 11% rally over the past four weeks, and currently holds a Zacks Rank 2 (Buy), suggesting it may be poised for further upward movement [2]. Earnings Estimates - The bullish outlook for NLY is reinforced by positive earnings estimate revisions, with no estimates decreasing in the past two months and three estimates increasing, alongside a rise in the consensus estimate [3]. - Investors are encouraged to consider adding NLY to their watchlist due to the important technical indicators and favorable earnings estimate revisions [3].

Group 1 - The article promotes a portfolio strategy that generates income without the need for selling assets, aiming to simplify retirement investing [1][2] - The service offers features such as model portfolios with buy/sell alerts, preferred and baby bond portfolios for conservative investors, and regular market updates [2] - The philosophy of the service emphasizes community and education, encouraging investors to collaborate rather than invest alone [2] Group 2 - The article mentions that the service closely monitors all positions and provides exclusive Buy and Sell alerts to its members [4] - It highlights the involvement of various contributors who support the service, indicating a collaborative approach to investment recommendations [4]

Core Viewpoint - Annaly Capital Management (NLY) shows potential as a stock pick due to its recent technical indicators and positive earnings revisions [1][2][3] Technical Analysis - NLY has surpassed resistance at the 50-day moving average, indicating a short-term bullish trend [1] - The 50-day simple moving average is a key technical indicator for determining support or resistance levels [1] Performance Metrics - NLY has experienced a rally of 10.1% over the past four weeks, suggesting upward momentum [2] - The company currently holds a Zacks Rank of 2 (Buy), indicating favorable market sentiment [2] Earnings Estimates - There have been three upward revisions in earnings estimates for the current fiscal year, with no downward revisions in the past two months [2] - The consensus estimate for NLY has also increased, reinforcing the bullish outlook [2] Investment Consideration - Investors are encouraged to add NLY to their watchlist due to its strong technical indicators and positive earnings revisions [3]

Core Viewpoint - Annaly Capital Management, Inc. (NLY) is demonstrating strong financial health with a high dividend yield of 14.34%, surpassing the industry average of 12.2%, and has recently increased its dividend for the first time in five years, indicating confidence in its cash flow and growth prospects [1][2]. Dividend and Payout - Annaly's current payout ratio stands at 101%, which is typically a signal for potential dividend cuts; however, the company has recently raised its dividend by 7.7% to 70 cents per share for Q1 2025 [1][2]. - The company has a share repurchase program authorized for up to $1.5 billion, which will expire on December 31, 2029, although no shares have been repurchased under this plan yet [5]. Market Conditions - The Federal Reserve's interest rate reduction of 100 basis points in 2024 has led to a decline in mortgage rates, with the average 30-year fixed-rate mortgage at 6.76% as of May 8, 2025, down from 7.09% a year prior [7]. - The decline in mortgage rates is expected to enhance purchase originations and refinancing activities, which will likely improve Annaly's book value and net interest spread [8]. Investment Strategy - Annaly's investment portfolio is well-diversified, totaling $84.9 billion as of March 31, 2025, including residential credit, mortgage servicing rights (MSR), and agency mortgage-backed securities (MBS) [9][10]. - The company has exited its Middle Market Lending portfolio and commercial real estate business to focus on its core housing finance strategy, enhancing its capabilities in residential credit and MSR [11]. Financial Performance - Over the past year, Annaly's shares have increased by 10.2%, outperforming the industry and its peers, AGNC Investment and Arbor Realty Trust, which saw gains of 5% and a decline of 14.5%, respectively [13]. - Annaly is trading at a forward price-to-tangible book (P/TB) multiple of 1.00X, which is higher than the industry average of 0.91X, indicating a relatively inexpensive valuation compared to its peers [15]. Sales and Earnings Estimates - Zacks Consensus Estimates project sales of $1.47 billion for the current year and $1.66 billion for the next year, reflecting significant year-over-year growth of 492.83% and 13.21%, respectively [21]. - Earnings per share (EPS) estimates for the current year stand at $2.87, with a year-over-year growth estimate of 6.30% [22].

Core Insights - Annaly (NYSE: NLY) reported solid earnings for the first fiscal quarter, driven by continuous improvement in the spread picture and robust distributable earnings [1] - The company increased its dividend for the first time, indicating positive financial performance [1] Financial Performance - The earnings report highlighted a continual improvement in the spread picture, which is crucial for mortgage REITs [1] - Robust distributable earnings were a key factor contributing to the solid performance in the first fiscal quarter [1] Dividend Policy - Annaly increased its dividend for the first time, reflecting confidence in its financial stability and growth prospects [1]

Company Performance - Abacus Life, Inc. (ABL) has gained approximately 11.1% year-to-date, outperforming the average gain of 4.6% in the Finance group [4] - The Zacks Consensus Estimate for ABL's full-year earnings has increased by 2% over the past 90 days, indicating improving analyst sentiment [4] - Abacus Life, Inc. currently holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock [3] Industry Context - Abacus Life, Inc. is part of the Insurance - Life Insurance industry, which consists of 16 individual stocks and is currently ranked 75 in the Zacks Industry Rank [6] - The Insurance - Life Insurance industry has seen an average gain of 1.6% year-to-date, indicating that ABL is performing better than its peers in this specific sector [6] - In contrast, the REIT and Equity Trust industry, to which Annaly Capital Management (NLY) belongs, is ranked 155 and has declined by 2.7% this year [6]

Core Viewpoint - Annaly Capital Management, Inc. is the largest company in the mortgage Real Estate Investment Trust (mREIT) sector by market capitalization, with a high forward dividend yield of 14.42% that appears attractive to investors [1]. Company Summary - Annaly Capital Management, Inc. holds the position of the largest mREIT by market cap, indicating its significant presence in the sector [1]. - The company's forward total return is heavily reliant on various factors, suggesting that while the dividend yield is appealing, potential investors should consider the underlying risks associated with total return [1]. Industry Summary - The mREIT sector is characterized by companies like Annaly that offer high dividend yields, which can attract income-focused investors [1].

Core Viewpoint - Annaly Capital Management offers an exceptionally high dividend yield of over 14%, significantly higher than the S&P 500 average, but concerns exist regarding the sustainability of this yield due to the nature of its investments and market conditions [1][2]. Group 1: Dividend and Financial Performance - Annaly Capital raised its quarterly dividend payout by 7.7% to $0.70 per share, despite the high yield appearing unsustainable [2]. - The company reported earnings available for distribution of $0.72 per share in the first quarter, aligning with its increased dividend commitment [5]. - It will take over five years for investors to recoup their principal investment based on the current yield [3]. Group 2: Investment Strategy and Portfolio Composition - Unlike traditional REITs, Annaly invests in mortgage-backed securities (MBS), mortgage servicing rights (MSR), and residential credit, allowing it to avoid income taxes by distributing at least 90% of profits [4]. - As of March 31, 2023, Annaly's portfolio asset values were $77.6 billion in Agency MBS, $1.8 billion in MSR, and $5.2 billion in residential credit, with committed capital of $7.7 billion, $1.8 billion, and $2.1 billion respectively [5]. - The company utilizes approximately $8 billion in capital to manage a $75 billion MBS portfolio, indicating significant leverage [6]. Group 3: Risks and Market Conditions - The high yields offered by mortgage REITs like Annaly are tied to the performance of their MBS portfolios, which can be adversely affected by rising interest rates [7]. - Rapid interest rate increases can lead to significant challenges for Annaly, as evidenced by a 26% dividend reduction in early 2023 due to previous rate hikes [9][10]. - The Federal Reserve's decision to maintain interest rates and reduce its MBS portfolio adds uncertainty to Annaly's future dividend sustainability [11].

Financial Performance - The company reported a 3% economic return in Q1 2025, with a common stock dividend increase to $0.70 per share, indicating healthy earnings momentum [176]. - Net income for the three months ended March 31, 2025, was $130.3 million, a decrease from $465.2 million for the same period in 2024, primarily due to unfavorable changes in net gains on derivatives [197]. - Earnings available for distribution (EAD) were $461.9 million, or $0.72 per average common share, compared to $358.0 million, or $0.64 per average common share, in the prior year [198]. - GAAP net income for Q1 2025 was $130.3 million, a decrease from $465.2 million in Q1 2024, reflecting a significant drop in investment gains and losses [207]. - The annualized return on average equity was 4.04% for Q1 2025, down from 16.29% in Q1 2024, reflecting a significant decline in other income [254]. Investment Portfolio - The investment portfolio at period-end increased to $101.96 billion from $87.48 billion year-over-year [195]. - Agency MBS investments grew by $4.4 billion in market value, with TBA securities reaching $6.6 billion, the largest holdings in two years [177]. - The Residential Credit portfolio ended at $6.6 billion in market value, with six securitization transactions totaling $3.1 billion completed during the quarter [179]. - The fair value of Agency MBS was $68.3 billion as of March 31, 2025, reflecting the company's strong position in the mortgage-backed securities market [261]. - Total agency securities increased to $68,329,720 thousand as of March 31, 2025, up from $67,434,068 thousand at December 31, 2024, representing a growth of 1.32% [267]. Interest Income and Expenses - Interest income increased to $1.32 billion in Q1 2025 from $1.09 billion in Q1 2024, while net interest income rose to $220.0 million from a loss of $6.5 million [195][197]. - The average yield on interest-earning assets (excluding PAA) improved to 5.23% in Q1 2025 from 4.87% in Q1 2024 [199]. - The net interest margin (excluding PAA) increased to 1.69% from 1.43% year-over-year [199]. - Economic interest expense increased by $122 million in Q1 2025 compared to Q1 2024, primarily due to a reduction in the net interest component of interest rate swaps [239]. - The company reported a net interest spread (excluding PAA) of 3.88% for Q1 2025, compared to 3.78% for Q1 2024 [231]. Economic Indicators - U.S. GDP declined by 0.3% SAAR in Q1 2025, primarily due to a 4.8% drag from net trade, while final sales to private domestic purchasers grew at 3.0% SAAR [184]. - The unemployment rate increased to 4.2% by the end of Q1 2025, driven by more individuals entering the labor force [185]. - The Federal Reserve maintained the Federal Funds rate at 4.25% - 4.50%, marking their second pause since cutting rates by 100 basis points at the end of the previous year [187]. Capital Structure - Total GAAP debt rose to $88.6 billion as of March 31, 2025, compared to $76.5 billion a year earlier, with recourse debt increasing to $65.1 billion from $61.7 billion [218]. - The GAAP capital ratio at period-end was 12.4%, slightly down from 12.6% in the previous year [195]. - The economic leverage ratio slightly increased to 5.7:1 in Q1 2025 from 5.6:1 in Q1 2024, indicating a stable capital structure [218]. - The debt-to-net equity ratio was 6.8:1 as of March 31, 2025, indicating a stable leverage position compared to previous periods [261]. Risk Management - The company has a risk management framework that includes a firm-wide risk appetite statement to guide investment management activities [290]. - The liquidity management policy includes monitoring unencumbered assets and funding composition under stress conditions [318]. - The company manages operational risk through various tools, including Risk and Control Self Assessment (RCSA) testing and annual disaster recovery exercises [331]. - The Cybersecurity Committee oversees cybersecurity risk management, with daily monitoring performed by the IT Infrastructure Team [335]. Shareholder Actions - The company has authorized a new common stock repurchase program of up to $1.5 billion through December 31, 2029, replacing the previous program [279]. - The Preferred Stock Repurchase Program allows for the repurchase of up to 63.5 million shares of Preferred Stock, with an aggregate liquidation value of approximately $1.6 billion as of March 31, 2025 [283]. - During Q1 2025, the company issued 23.3 million shares under the at-the-market sales program, generating proceeds of $495.7 million, net of commissions and fees [282]. Market Conditions - The mortgage servicing rights (MSR) portfolio remained relatively unchanged, with $48 million in assets purchased, and the weighted average note rate rose to 3.23% [181]. - The weighted average experienced CPR for the period was 7.1%, up from 6.0% in the prior year [195]. - The projected long-term CPR for the Agency MBS portfolio rose to 9.5% in Q1 2025, compared to 8.9% in Q1 2024 [227]. - The company closely monitors its REIT status and compliance with applicable regulations, which is essential for maintaining its tax-exempt status [340].