Core Viewpoint - Annaly Capital Management, a mortgage REIT, offers a high dividend yield of 12.8%, attracting investor interest, but its dividend payments are volatile and influenced by interest rate changes [2][8]. Company Overview - Annaly Capital Management primarily invests in agency mortgage-backed securities (MBS), which constitute approximately 80% of its portfolio, along with non-agency residential mortgage loans and mortgage servicing rights [2][3]. - The company employs leverage to enhance returns, with a leverage ratio of 7.1 times equity as of September 30 [3][4]. Financial Performance - The company's third-quarter earnings available for distribution (EAD) increased to $0.73 per share, reflecting a 10.6% year-over-year growth [6]. - The annualized EAD return on equity was reported at 14.7%, up from about 13% a year prior [7]. Dividend Analysis - Annaly's current quarterly dividend is $0.70, which is covered by the last quarter's EAD [8]. - The dividend yield of 12.8% significantly exceeds the S&P 500 index yield of 1.2%, but the company's dividends have fluctuated, with quarterly dividends dropping from $0.88 in 2022 to $0.65 in the following year [8][11]. Market Context - The company's market capitalization stands at $15 billion, with a current stock price of $22.00 [10]. - Economic uncertainties, including inflation and potential interest rate changes by the Federal Reserve, pose risks to the company's performance and dividend stability [11].

Mortgage REITs are snapping up bonds backed by US home loans at a pace last seen before the pandemic, taking advantage of relatively cheap valuations and rallies in their own shares that helped them raise fresh cash https://t.co/ScRqz7lHTn ...

Core Insights - After experiencing significant losses in 2022, most mortgage REITs (mREITs) have remained within a trading range over the past two years, with the iShares Mortgage Real Estate Capped ETF (REM) fluctuating between $20 [1] Group 1 - The performance of mortgage REITs has been stable following a tumultuous year in 2022, indicating a potential recovery phase in the sector [1] - The iShares Mortgage Real Estate Capped ETF (REM) has shown a consistent trading range, suggesting limited volatility and investor caution [1]