Annaly Offers 14.83% Dividend Yield: Is this Sustainable?

Core Insights - Annaly Capital Management, Inc. (NLY) has a monthly dividend yield of 14.83%, surpassing the industry average of 12.9%, with a payout ratio of 101% [1][4] - The company recently increased its dividend by 7.7% to 70 cents per share, marking its first hike in five years, indicating confidence in its cash flow and growth prospects [4][10] - Annaly maintains a strong liquidity position with $7.5 billion in total assets available for financing, including $4.7 billion in unencumbered Agency MBS, providing a competitive edge [5][10] Dividend Yield - Annaly's dividend yield is significantly high at 14.83%, while AGNC Investment Corp. (AGNC) has a yield of 15.93% and Arbor Realty Trust (ABR) has a yield of 12.66% [1][7][8] - AGNC has a payout ratio of 81% and a liquidity of $6 billion, while ABR has a payout ratio of 115% and recently reduced its dividend by 30.3% [7][8] Share Repurchase Program - Annaly's board authorized a share repurchase program of up to $1.5 billion, set to expire on December 31, 2029, although no shares have been repurchased yet [6][10] Price Performance - NLY shares have increased by 6.7% year-to-date, outperforming the industry growth of 1.4% [9][10] Valuation and Earnings Estimates - Annaly trades at a forward price-to-tangible book (P/TB) ratio of 0.96X, slightly above the industry average of 0.95X [13] - The Zacks Consensus Estimate for NLY's earnings indicates a year-over-year growth of 6.3% for 2025 and 1.4% for 2026, with estimates remaining unchanged over the past 30 days [15][16]