Annaly Capital Management (NLY) shares rallied 5.4% in the last trading session to close at $18.82. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 14.9% loss over the past four weeks.Annaly’s surge in its stock price follows the broader market rally driven by Trump’s announcement on April 9, 2025, of a 90-day pause on reciprocal tariffs for most trading partners, excluding China. The tariff pause reduced imm ...

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Core Viewpoint - Annaly Capital Management (NLY) has shown resilience in a challenging economic environment, outperforming its peers and the industry overall [1][4]. Performance Summary - NLY's stock has increased by 11.5% over the past year, while the industry has declined by 3.8% [1]. - Compared to peers, AGNC Investment has grown by 7.2%, and Ellington Credit Company has decreased by 19% [1]. Liquidity and Capital Distribution - Annaly maintains a strong liquidity position with an unencumbered asset portfolio of $5.8 billion, enhancing its ability to navigate market fluctuations [5][6]. - The company announced a cash dividend of 70 cents per share for Q1 2025, a 7.7% increase from the previous payout, with a current dividend yield of 14.87%, surpassing the industry average of 11.30% [6][7]. - NLY's payout ratio stands at 96% of its earnings, indicating a sustainable dividend policy [7]. Market Conditions and Opportunities - The Federal Reserve's interest rate cuts have led to a decline in mortgage rates, which is expected to improve purchase originations and refinancing volumes [11][12]. - NLY is anticipated to benefit from these trends, leading to an improvement in book value and net interest spread [13]. Diversification Strategy - Annaly's diversified capital allocation includes residential credit, mortgage servicing rights (MSR), and agency mortgage-backed securities (MBS), which helps mitigate risks and enhance returns [14][15]. - The company has exited its Middle Market Lending portfolio and commercial real estate business to focus on its core housing finance strategy [16]. - The inclusion of MSRs in the portfolio is expected to provide consistent returns, especially in fluctuating interest rate environments [17]. Investment Outlook - NLY's strong liquidity and diversified investment strategy position it well for long-term growth and stability [18]. - Earnings estimates for 2025 and 2026 have been revised upward, reflecting a solid growth trajectory [20]. - The company is trading at a forward P/E of 6.67X, lower than the industry average of 7.67X, indicating potential value for investors [22].

Group 1 - Annaly Capital Management (NLY) has outperformed its Finance sector peers, gaining approximately 7.3% year-to-date, while the average loss in the Finance group is about 1.4% [4] - The Zacks Consensus Estimate for NLY's full-year earnings has increased by 6.2% over the past quarter, indicating a positive trend in analyst sentiment [4] - NLY currently holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock [3] Group 2 - Annaly Capital Management is part of the REIT and Equity Trust industry, which has seen an average loss of 0.5% this year, further highlighting NLY's strong performance [6] - Another Finance stock, Amerisafe (AMSF), has also outperformed its sector with a year-to-date increase of 3% and holds a Zacks Rank of 2 (Buy) [5] - The Insurance - Accident and Health industry, to which Amerisafe belongs, is currently ranked 38 and has gained 7% year-to-date [6]

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Core Viewpoint - Annaly Capital Management (NLY) is considered one of the "less risky" mortgage REITs, but its common stock carries significant risk and is not recommended for buy-and-hold strategies. Preferred shares are viewed as a better option for long-term investment within the sector [1][2][10]. Group 1: Common Stock and Preferred Shares - The common stock of NLY is often outside the buy range and should be treated as a trading security rather than a long-term investment [1]. - Preferred shares, particularly NLY-I, are seen as carrying minimal risk compared to other mortgage REITs, making them a more suitable option for investors looking for stability [2][10]. - Preferred shares typically trade around $25, but can fluctuate based on credit risk and dividend rates [3]. Group 2: Pricing and Call Risk - NLY-I is currently trading at $25.87, which is above the call value of $25, creating a risk for investors if the company decides to call the shares [4][5]. - If shares are called immediately, investors could face a loss of approximately $0.71 per share, leading to a negative annualized yield-to-call of -28.6% [5][10]. - The potential for an immediate call poses a significant risk, suggesting that investors should wait for a better entry point before investing in NLY preferred shares [6][10]. Group 3: Investment Strategy - Investors are advised to avoid purchasing NLY-I at current prices due to the substantial call risk, and it may be more prudent to sell and reallocate cash until conditions improve [7][10]. - The risk of losing on preferred shares primarily arises if the company calls them, which could lead to a less favorable investment compared to alternatives like short-term Treasuries [9]. - The current neutral rating for NLY-I reflects concerns over the risk/reward profile, with a potential loss of less than 3% being a significant consideration [8].

Core Viewpoint - Annaly Capital Management is expected to report significant growth in earnings and revenue, with a favorable outlook based on recent analyst estimate revisions [2][3]. Group 1: Stock Performance - Annaly Capital Management (NLY) closed at $21.61, reflecting a -0.32% change from the previous day, underperforming the S&P 500's gain of 1.77% [1] - The stock has increased by 0.23% over the past month, while the Finance sector has declined by 1.46% and the S&P 500 has decreased by 5.73% [1] Group 2: Earnings and Revenue Estimates - The upcoming earnings release is anticipated to show an EPS of $0.70, representing a 9.38% increase year-over-year, with revenue expected to reach $275 million, indicating a 4363.57% rise compared to the same quarter last year [2] - For the annual period, earnings are projected at $2.81 per share and revenue at $1.15 billion, reflecting increases of +4.07% and +364.09% respectively from the previous year [3] Group 3: Analyst Estimates and Rankings - Recent changes in analyst estimates for Annaly Capital Management are crucial for investors, as positive revisions often indicate a favorable business outlook [3] - The Zacks Rank system currently rates Annaly Capital Management at 2 (Buy), with an average annual return of +25% for 1 ranked stocks since 1988 [5] Group 4: Valuation Metrics - Annaly Capital Management has a Forward P/E ratio of 7.71, which is lower than the industry average of 8.57, suggesting it is trading at a discount [6] - The company has a PEG ratio of 4.88, compared to the industry average of 1.61, indicating a higher expected earnings growth rate relative to its price [7] Group 5: Industry Context - The REIT and Equity Trust industry, part of the Finance sector, currently holds a Zacks Industry Rank of 202, placing it in the bottom 20% of over 250 industries [7][8]

Core Insights - The article discusses the background and expertise of a financial analyst named Harrison, who has been active on Seeking Alpha since 2018 and has over a decade of market experience [1]. Group 1 - Harrison has professional experience in private equity, real estate, and economic research [1]. - He possesses an academic background in financial econometrics, economic forecasting, and global monetary economics [1].

Core Viewpoint - Annaly Capital Management, Inc. (NLY) announced a cash dividend of 70 cents per share for Q1 2025, representing a 7.7% increase from the previous payout, and the stock rose 2.4% following the announcement [1] Dividend Information - The dividend will be paid on April 30, 2025, to shareholders of record as of March 31 [1] - In March 2023, the company reduced its dividend by 26% to 65 cents [2] - Currently, NLY's payout ratio stands at 96% of its earnings, with an annual dividend yield of 12.03% based on a closing price of $21.61 [2] Capital Distribution Activities - On December 31, 2024, the board authorized a share repurchase program allowing up to $1.5 billion in buybacks, but no shares have been repurchased since the announcement [3] Liquidity and Leverage - Annaly is focused on improving liquidity and reducing leverage, with a strong liquidity position as of Q4 2024 [4] - The company has an unencumbered asset portfolio totaling $5.8 billion, which can provide liquidity during adverse market conditions [4] - A strong balance sheet is expected to support sustainable capital distributions [4] Price Performance - Over the past year, NLY shares have increased by 26.7%, outperforming the industry growth of 8.8% [5] Zacks Rank - Annaly currently holds a Zacks Rank 2 (Buy) [7]

Group 1: High-Yield Dividend Stocks - AGNC Investment and Annaly Capital are mortgage REITs offering an average yield of 13.2%, requiring an investment of $7,580 for $1,000 in annual dividend income [1] - AGNC Investment has a current yield of 14.2%, while Annaly Capital offers a yield of 12.2% [3][7] Group 2: Company Operations and Financials - AGNC Investment borrows at low short-term rates to invest in long-term mortgage-backed securities, with a significant increase in average cost of funds by 373% to 2.89% over two years [4] - Annaly Capital's portfolio is 87% invested in agency-backed securities, with a diversified revenue stream including a residential credit operation that securitized $11 billion in loans in 2024 [8] - In Q4 2024, Annaly's average cost of interest-bearing liabilities decreased to 3.79%, resulting in a net income of $0.78 per share, supporting a quarterly dividend of $0.72 [10] Group 3: Market Concerns - Both AGNC and Annaly face pressure from fears of inflation due to a potential trade war, which could lead to increased interest rates [4][7] - AGNC's stock price has declined by approximately 47.6% since its debut in 2008, but it has provided a total return of 470% through dividends [6]