Annaly(NLY)

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Annaly Capital Management (NLY) is a Top-Ranked Value Stock: Should You Buy?
ZACKSยท 2025-07-02 14:46
Core Insights - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to complement the Zacks Rank, helping investors identify stocks with the potential to outperform the market [3][4] Zacks Style Scores Overview - The Zacks Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] - Value Score emphasizes finding undervalued stocks using financial ratios [4] - Growth Score assesses a company's financial health and future growth potential [5] - Momentum Score identifies trends in stock prices and earnings estimates [6] - VGM Score combines all three styles to provide a comprehensive evaluation of stocks [7] Zacks Rank and Performance - The Zacks Rank utilizes earnings estimate revisions to guide investors in stock selection, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8][9] - There are over 800 stocks rated 1 or 2, which can be overwhelming for investors [10] Stock Example: Annaly Capital Management (NLY) - Annaly Capital Management is a mortgage real estate investment trust (mREIT) with a diverse portfolio including mortgage-related securities [13] - NLY holds a 3 (Hold) rating on the Zacks Rank and has a VGM Score of B, along with a Value Style Score of B, indicating attractive valuation metrics [14] - The company has seen an upward revision in earnings estimates, with a Zacks Consensus Estimate of $2.87 per share for fiscal 2025 [14] - Given its solid Zacks Rank and favorable Style Scores, NLY is recommended for investors' consideration [15]
Annaly vs. Starwood: Which Mortgage REIT Offers More Resilience Now?
ZACKSยท 2025-06-26 15:20
Core Viewpoint - Both Annaly Capital Management (NLY) and Starwood Property Trust, Inc. (STWD) are mortgage real estate investment trusts (mREITs) with different portfolio strategies and risk profiles, leading to a comparison of their investment opportunities for investors [1] Group 1: Annaly Capital Management (NLY) - NLY's investment strategy focuses on prudent asset selection and effective capital allocation, including traditional Agency MBSs for downside protection and non-agency assets for enhanced returns [2] - As of March 31, 2025, NLY's investment portfolio totaled $84.9 billion, benefiting from a low prepayment environment through a scaled mortgage servicing rights (MSR) platform [3] - The decline in mortgage rates is expected to improve NLY's book value and net interest spread, enhancing the overall yield of its portfolio [4] - By the end of Q1 2025, NLY had $7.5 billion in total assets available for financing, including $4.7 billion in unencumbered Agency MBS, providing liquidity during adverse market conditions [5] - NLY has a monthly dividend yield of 14.6% with a payout ratio of 101%, reflecting confidence in its cash flow and growth prospects [6] - NLY's diversified portfolio and growth in MSR position it for improved returns as mortgage rates decline, trading at a discount compared to the industry average [10][17] Group 2: Starwood Property Trust, Inc. (STWD) - STWD's investment strategy includes commercial mortgage-backed securities (CMBS) and related commercial real estate assets, with a diversified portfolio of $1.02 billion as of March 31, 2025 [7] - The company has engaged in acquisitions and divestitures to optimize its portfolio, including the sale of 16 retail properties for $387.1 million, recognizing a gain of $92 million [8] - STWD's liquidity position is concerning, with cash and cash equivalents of $692 million against long-term debt of $18.4 billion as of March 31, 2025 [11] - STWD pays a quarterly dividend of 48 cents, yielding 9.5% with a payout ratio of 108%, but has not increased its dividend over the last five years [11] - STWD's earnings estimates suggest a year-over-year decline of 10.9% for 2025, with downward revisions indicating a more cautious outlook from analysts [20][22] Group 3: Comparative Analysis - Over the past year, shares of STWD and NLY have risen 13.7% and 11.8%, respectively, outperforming the industry's growth of 5.2% [12] - STWD is trading at a 12-month forward P/E of 10.87X, higher than its five-year median, while NLY trades at a lower P/E of 6.65X, indicating better value for NLY [14] - NLY's earnings estimates reflect a year-over-year rise of 6.3% for 2025, with upward revisions suggesting a bullish outlook, contrasting with STWD's downward revisions [20][22] - NLY is viewed as the more resilient and better-valued option for investors seeking stable income with lower risk, while STWD's higher debt levels and exposure to commercial real estate present more risks [23]
Better Dividend Stock: W.P. Carey vs. Annaly Capital Management
The Motley Foolยท 2025-06-25 22:45
Core Viewpoint - Dividend investors should be cautious about over-focusing on high dividend yields, as seen in the comparison between Annaly Capital Management and W.P. Carey, where a lower yield may provide more reliable income over time [1]. Company Overview - Annaly Capital Management operates as a mortgage REIT, purchasing pooled mortgages that are traded as bond-like securities, which are influenced by interest rates and housing market conditions [2]. - The business model of Annaly involves significant leverage, which can amplify both gains and losses, depending on the volatility of mortgage securities [4]. Dividend Analysis - Annaly's 14% dividend yield is not reliable for investors seeking consistent income, as both its dividend and stock price have declined over time, indicating potential risks for those who rely on dividends for living expenses [5][7]. - In contrast, W.P. Carey, despite cutting its dividend in late 2023, has a history of 24 consecutive annual increases and has resumed increasing its dividend quarterly since the cut, suggesting a more stable income stream for investors [8][9]. Business Model Comparison - W.P. Carey's business model is more traditional, focusing on physical properties that generate rental income, which allows for potential growth in dividends over time, contrasting with Annaly's total return investment approach that relies on dividend reinvestment [9][10]. - The recent dividend cut by W.P. Carey was a strategic decision to exit the struggling office sector, positioning the company for long-term growth and making it potentially more attractive for investors seeking reliable income [8].
Will Annaly Benefit From Its Portfolio Diversification Efforts?
ZACKSยท 2025-06-24 15:41
Core Insights - Annaly Capital Management (NLY) benefits from a well-diversified capital allocation strategy, with an investment portfolio totaling $84.9 billion as of March 31, 2025, which includes residential credit, mortgage servicing rights (MSR), and agency mortgage-backed securities (MBS) [1][9] Investment Strategy - The diversified investment strategy is expected to contribute significantly to long-term growth and stability, allowing the company to capitalize on various opportunities while mitigating risks from overexposure to specific areas [2] - In 2022, NLY divested its Middle Market Lending portfolio and exited the commercial real estate sector, reallocating capital to enhance its core housing finance strategy and focus on residential credit, MSR, and Agency MBS [3] - The inclusion of MSRs is particularly advantageous as their value tends to rise with increasing interest rates, providing a hedge against declines in agency MBS values, which may lead to more consistent returns [4] Competitive Landscape - AGNC Investment Corp. (AGNC) adopts a proactive portfolio management approach, frequently adjusting asset allocations and hedging strategies to reduce risks and capture yield opportunities [5] - Starwood Property Trust (STWD) focuses on commercial real estate, holding a diversified portfolio of $1.02 billion as of Q1 2025, and maintains steady income through principal repayments and targeted acquisitions [6] Performance Metrics - NLY shares have increased by 9.2% over the past year, outperforming the industry growth of 4.8% [7][9] - The forward price-to-tangible book (P/TB) ratio for Annaly is 0.98X, slightly above the industry average of 0.96X [10] - Earnings estimates for NLY indicate a year-over-year increase of 6.3% for 2025 and 1.4% for 2026, with upward revisions in the past 60 days [13]
Will Declining Mortgage Rates Drive Annaly's Performance?
ZACKSยท 2025-06-20 15:56
Core Insights - Annaly Capital Management, Inc. (NLY) is significantly impacted by mortgage rates, which have recently declined, with the average rate on a 30-year fixed-rate mortgage at 6.81% as of June 18, 2025, down from 6.87% a year ago [1] Group 1: Mortgage Rates and Demand - Lower mortgage rates are expected to improve housing affordability challenges, leading to increased loan demand [2] - The decline in mortgage rates is anticipated to enhance purchase originations and refinancing activities, which will likely improve NLY's book value as spreads in the Agency market tighten [3] Group 2: Financial Performance - Annaly's net interest income (NII) rose to $219.9 million in Q1 2025, a significant recovery from a negative NII of $6.45 million in the same quarter the previous year, aided by the Federal Reserve's interest rate cuts of 100 basis points in 2024 [4] - The upward trend in NII is expected to ease earnings pressure for Annaly, thereby supporting the company's overall performance [4] Group 3: Competitive Landscape - AGNC Investment's NII also reflects the influence of mortgage rates, with a reported NII of $159 million compared to a negative NII of $30 million in the prior-year quarter, indicating a potential reduction in operational challenges [5] - Arbor Realty Trust (ABR) experienced a 27.2% year-over-year decline in NII to $75.4 million in Q1 2025, but is expected to benefit from lower mortgage rates, which may ease earnings pressure [6] Group 4: Stock Performance and Valuation - NLY shares have increased by 9.6% over the past year, outperforming the industry growth of 4.5% [7] - Annaly's forward price-to-tangible book (P/TB) ratio stands at 0.98X, slightly above the industry average of 0.96X [10] Group 5: Earnings Estimates - The Zacks Consensus Estimate for NLY's 2025 earnings indicates a year-over-year increase of 6.3%, with a further growth expectation of 1.4% for 2026, reflecting upward revisions in estimates over the past 60 days [12]
Annaly Stock Gains 8% in 6 Months: Is It Worth Holding for Now?
ZACKSยท 2025-06-19 14:51
Core Viewpoint - Annaly Capital Management (NLY) has demonstrated strong stock performance, gaining 8% over the past six months, significantly outperforming the industry average of 1.7% and its peers AGNC Investment and Arbor Realty Trust [1][4]. Price Performance - NLY's stock has outperformed AGNC Investment, which grew by 5.7%, and Arbor Realty Trust, which fell by 20.9% during the same period [4]. Interest Rate Impact - The Federal Reserve's reduction of interest rates by 100 basis points in 2024 has led to a slight decline in mortgage rates, with the average 30-year fixed-rate mortgage at 6.84% as of June 12, 2025, down from 6.95% a year prior [6]. - Lower mortgage rates are expected to improve housing affordability and increase loan demand, which will benefit NLY [7]. Financial Outlook - NLY is likely to see improvements in book value due to rising purchase originations and refinancing activities, as well as tightening spreads in the Agency market, which will enhance net interest spread and overall yield [8]. - The company has a strong dividend profile, currently yielding 14.7%, higher than the industry average of 11.7%, with a recent 7.7% increase in its dividend payout [9]. Liquidity and Capital Management - As of the end of Q1 2025, NLY had $7.5 billion in total assets available for financing, including $4.7 billion in unencumbered Agency MBS, providing substantial liquidity [11]. - The company has authorized a share repurchase program of up to $1.5 billion, which will expire on December 31, 2029, although no shares have been repurchased under this plan yet [12]. Diversification Strategy - NLY's diversified capital allocation includes residential credit, mortgage servicing rights (MSR), and agency mortgage-backed securities (MBS), totaling an investment portfolio of $84.9 billion as of March 31, 2025 [13][15]. - The inclusion of MSRs is significant as they tend to increase in value when interest rates rise, providing a hedge against declines in agency MBS [16]. Valuation Analysis - NLY is currently trading at a forward 12-month price-to-tangible book (P/TB) multiple of 0.98X, which is higher than the industry average of 0.96X, indicating a premium valuation [17][20]. Analyst Sentiment - Analysts have revised earnings estimates upward over the past 60 days, indicating a constructive sentiment around NLY's stock [22].
Annaly Preferred Shares Face Off
Seeking Alphaยท 2025-06-18 22:38
Core Viewpoint - Preferred shares are presenting an attractive investment opportunity with a yield of approximately 9.5%, offering a balance of income and stability for investors seeking consistent returns [1][13]. Investment Characteristics - Preferred shares rank above common equity in the capital structure, providing a lower risk profile compared to common stock, particularly in the mortgage REIT sector [2]. - Annaly Capital Management's preferred shares, specifically NLY-F, are highlighted for their low risk rating of 1 on a scale of 1 to 5, indicating a safer income investment [3][11]. Specific Share Analysis - NLY-F is currently priced at $25.18, with a yield of 9.48% and an annualized dividend of approximately $2.3881, making it a more attractive option compared to NLY-G, which has a lower yield and dividend [5][8]. - NLY-F and NLY-I are noted to pay about $0.20 more in dividends annually than NLY-G, justifying their higher price [9]. Call Risk and Market Dynamics - There is a potential call risk associated with these preferred shares, as the company can call shares with a 30-day notice, but this risk can be managed by selecting appropriate entry prices [7][12]. - The market conditions may influence the performance of these shares, with NLY-F and NLY-I expected to hold up better during periods of market stress compared to NLY-G [12]. Final Recommendations - For long-term investors seeking steady returns, NLY-F and NLY-I are recommended over NLY-G, despite a slight call risk, due to their strong backing and attractive yields [13].
Here's Why Annaly Capital Management (NLY) is a Strong Value Stock
ZACKSยท 2025-06-16 14:45
Company Overview - Annaly Capital Management, Inc. is a mortgage real estate investment trust (mREIT) that primarily owns, manages, and finances a portfolio of real-estate-related investment securities [11] - The company's investment portfolio includes mortgage pass-through certificates, collateralized mortgage obligations (CMOs), credit risk transfer (CRT), and other securities backed by pools of mortgage loans [11] Zacks Rank and Style Scores - Annaly Capital Management has a Zacks Rank of 3 (Hold) and a VGM Score of B, indicating a solid position in the market [12] - The company also has a Value Style Score of B, supported by attractive valuation metrics such as a forward P/E ratio of 6.68, which is appealing to value investors [12] - For fiscal 2025, three analysts have revised their earnings estimate upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.05 to $2.87 per share [12] - Annaly Capital Management has an average earnings surprise of 2.6%, suggesting a positive trend in earnings performance [12] Investment Consideration - With a solid Zacks Rank and top-tier Value and VGM Style Scores, Annaly Capital Management is recommended to be on investors' short list for potential investment opportunities [13]
2 Picks To Make Your Money Earn More Money
Seeking Alphaยท 2025-06-15 14:15
Core Insights - The article emphasizes the importance of creating a portfolio that generates income without the need for selling assets, aiming to simplify retirement investing [1] - It promotes a community-focused investment service that offers various tools and resources to support investors [2] Group 1: Investment Strategy - The service provides a model portfolio with buy/sell alerts, catering to both conservative and aggressive investors [2] - It includes preferred and baby bond portfolios, which are designed for more risk-averse investors [2] Group 2: Community and Support - The investment philosophy is centered around community engagement, education, and the belief that investors should not navigate the market alone [2] - The service features an active chat platform that allows members to interact with service leaders and each other [2] Group 3: Monitoring and Alerts - The service closely monitors all positions and issues buy and sell alerts exclusively for its members [4]
Annaly Capital: Strong Outlook For 2025
Seeking Alphaยท 2025-06-14 07:33
Group 1 - The risk of a prolonged high interest rate environment has diminished as consumer prices are increasing at a slower rate, with inflation recorded at 2.4% in May [1] - The current economic landscape suggests a shift in focus towards innovation and growth opportunities within high-tech and early growth companies [1] Group 2 - The article emphasizes the importance of thorough research and analysis in identifying potential investment opportunities and risks in the market [1] - It highlights the significance of understanding market trends and consumer behavior in making informed investment decisions [1]