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Annaly Capital Management Inc (NLY)
NYSE:NLY
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Annaly Capital
(NYSE:NLY)
Rating:62Neutral
Price Target:―
Positive Factors
Dividend
Analyst expresses confidence in NLY's recently raised dividend and expects to maintain it for the remainder of the year.
Financial Strategy
NLY's diversified residential platforms and low leverage position them well to manage through and ultimately take advantage of financial volatility.
Negative Factors
Book Value
Book value was flattish in Q1, but ticked down -3.5% amid volatility.
Net Interest Spread
Net interest spread decreased to 1.35% from 1.47% last quarter.
Spread Risk
There is a disproportionate downside for book value if spreads widen further, which could negatively impact stock valuation.
Annaly Capital (NLY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.18B
Dividend Yield12.18%
Average Volume (3M)6.27M
Price to Earnings (P/E)22.0
Beta (1Y)0.94
Revenue Growth2.28%
EPS GrowthN/A
CountryUS
Employees191
SectorReal Estate
Sector Strength50
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.73
Shares Outstanding642,076,100
10 Day Avg. Volume6,687,339
30 Day Avg. Volume6,267,539
Financial Highlights & Ratios
PEG Ratio-0.07
Price to Book (P/B)0.76
Price to Sales (P/S)7.65
P/FCF Ratio3.90
Enterprise Value/Market Cap7.55
Enterprise Value/Revenue35.22
Enterprise Value/Gross Profit55.31
Enterprise Value/Ebitda19.96
Forecast
1Y Price Target
$20.64Price Target Upside-6.86% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Annaly Capital Business Overview & Revenue Model
Company DescriptionAnnaly Capital Management, Inc., a diversified capital manager, engages in mortgage finance and corporate middle market lending. The company invests in agency mortgage-backed securities, mortgage servicing rights, Agency commercial mortgage-backed securities, non-Agency residential mortgage assets, residential mortgage loans, credit risk transfer securities, corporate debts, and other commercial real estate investments. It has elected to be taxed as a real estate investment trust (REIT). As a REIT, it is not subject to federal income tax to the extent that it distributes its taxable income to its shareholders. The company was founded in 1996 and is based in New York, New York.
How the Company Makes MoneyAnnaly Capital makes money primarily through its investments in mortgage-backed securities (MBS) and other real estate-related assets. The company generates revenue by earning interest income on its investment portfolio, which includes both agency MBS guaranteed by government-sponsored enterprises and non-agency MBS that carry more credit risk. Annaly employs a strategy of leveraging its equity to acquire assets, thus enhancing the potential returns through its use of borrowed funds. The company also engages in hedging activities to manage interest rate risk. Additionally, Annaly earns income from its commercial real estate and middle market lending operations, which involve providing financing solutions to businesses and property owners. Key factors contributing to Annaly's earnings include the interest rate environment, housing market trends, and the performance of its diverse investment portfolio.
Annaly Capital Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautiously optimistic outlook with strong capital management and positive returns, despite challenges in the macro environment and decreases in book value. The company has demonstrated resilience in its residential credit segment and effective cost management strategies.Q2-2025 Updates
Positive Updates
Positive Economic Return and Dividend Coverage
Annaly Capital Management achieved an economic return of 0.7% for Q2 2025 and has maintained positive economic returns for the past seven quarters. Earnings available for distribution were $0.73, exceeding the $0.70 dividend, indicating strong financial performance.
Strong Capital Raising and Deployment
The company raised over $750 million in accretive capital in Q2 2025, which was primarily deployed in the agency sector, increasing the leverage modestly to 5.8x.
Resilient Residential Credit Sector
Annaly's Onslow Bay platform closed $3.6 billion in securitizations in Q2 2025, with a total of $7.6 billion for the year. The platform remains the industry leader in the expanded credit correspondent channel.
Effective Cost Management and Financing Strategy
The company increased its non-mark-to-market capacity significantly from $150 million at the end of 2023 to $1.9 billion in Q2 2025, enhancing liquidity and operational flexibility.
Negative Updates
Decrease in Book Value Per Share
The book value per share decreased by 3% from the prior quarter to $18.45 as of June 30, 2025.
Challenging Macro Environment
The U.S. economy experienced trade-related uncertainty and market volatility, with growth running at around 1% annualized for the first half of the year, which is below the pace of recent years.
Housing Market Challenges
The housing market is facing affordability issues due to elevated mortgage rates, high home prices, and increased taxes and insurance premiums, leading to four consecutive months of negative home price appreciation.
Company Guidance
During the Q2 2025 Annaly Capital Management earnings call, the company reported an economic return of 0.7% for the quarter and a year-to-date economic return of 3.7%, with a total shareholder return of over 10% through the end of the quarter. The company raised over $750 million in accretive capital, primarily deployed in the agency sector, and increased leverage modestly to 5.8x. The agency portfolio grew to nearly $80 billion in market value, up 6% quarter-over-quarter, while the residential credit portfolio remained relatively unchanged at $6.6 billion. The MSR business ended the quarter with a market value of $3.3 billion. Annaly's book value per share decreased by 3% to $18.45, while earnings available for distribution increased to $0.73 per share, exceeding the quarterly dividend of $0.70. The net interest spread excluding PAA rose to 1.47% from 1.24% a year ago. The call highlighted Annaly's diversified funding strategies and optimistic outlook on continued strong risk-adjusted returns, with expectations of Fed rate cuts potentially benefiting the mortgage sector.Annaly Capital Financial Statement Overview
Summary
Annaly Capital's financials show a mixed performance. The income statement reveals volatility but signs of recovery with improved net income. The balance sheet is strong with zero debt in 2024, reflecting good stability. Cash flow is robust, though there are fluctuations in capital movements. Overall, the company shows a positive outlook with a strong equity position but needs to stabilize revenue.Income Statement
The income statement shows significant volatility in total revenue over the years, with a notable negative revenue in 2023. However, net income has rebounded positively in 2024, indicating a potential turnaround. Despite this, the absence of gross profit, EBIT, and EBITDA data for recent years limits a full analysis of profitability.40
Negative
Balance Sheet
The balance sheet displays a strong equity position, with increasing stockholders' equity from 2023 to 2024. The debt-to-equity ratio is favorable as total debt is zero in 2024, suggesting reduced leverage risk. The equity ratio is consistent, highlighting good financial stability with substantial asset backing.75
Positive
Cash Flow
Cash flow analysis indicates a strong operating cash flow in 2024, with significant free cash flow growth from 2023. The company effectively manages its cash flow, though fluctuations in investing and financing cash flows suggest some volatility in capital allocation strategies.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.04B | 1.25B | -1.40B | 1.95B | 2.72B | -669.56M |
| Gross Profit | 1.94B | 1.20B | -1.18B | 1.93B | 2.64B | -607.43M |
| EBITDA | 5.36B | 0.00 | 0.00 | 3.14B | 0.00 | 0.00 |
| Net Income | 729.82M | 1.00B | -1.64B | 1.73B | 2.39B | -891.16M |
Balance Sheet | ||||||
| Total Assets | 112.14B | 103.56B | 93.23B | 81.85B | 76.76B | 88.46B |
| Cash, Cash Equivalents and Short-Term Investments | 2.06B | 510.50M | 1.41B | 1.58B | 1.34B | 1.24B |
| Total Debt | 91.67B | 21.45B | 13.20B | 8.80B | 7.11B | 7.04B |
| Total Liabilities | 98.67B | 90.86B | 81.88B | 70.48B | 63.57B | 74.43B |
| Stockholders Equity | 13.38B | 12.61B | 11.26B | 11.27B | 13.17B | 14.01B |
Cash Flow | ||||||
| Free Cash Flow | 572.50M | 2.45B | 1.97B | 4.36B | 2.54B | -32.15B |
| Operating Cash Flow | 1.16B | 3.31B | 2.37B | 5.37B | 3.08B | 527.97M |
| Investing Cash Flow | -16.33B | -14.98B | -8.42B | -14.53B | 4.90B | 40.35B |
| Financing Cash Flow | 15.64B | 11.75B | 5.88B | 9.39B | -7.88B | -41.49B |
Annaly Capital Technical Analysis
Positive
22.16
Price Trends
20.44
Positive
19.42
Positive
18.99
Positive
Market Momentum
0.41
Negative
73.68
Negative
94.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NLY, the sentiment is Positive. The current price of 22.16 is above the 20-day moving average (MA) of 21.07, above the 50-day MA of 20.44, and above the 200-day MA of 18.99, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 73.68 is Negative, neither overbought nor oversold. The STOCH value of 94.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NLY.
Annaly Capital Risk Analysis
Annaly Capital disclosed 81 risk factors in its most recent earnings report. Annaly Capital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Annaly Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $7.56B | 18.94 | 5.73% | 9.36% | -15.07% | -1.00% | |
68 Neutral | $6.69B | 9.76 | 10.13% | 8.00% | 26.69% | 9.10% | |
63 Neutral | $7.09B | 13.58 | -0.39% | 6.87% | 4.08% | -25.24% | |
63 Neutral | $3.45B | ― | -0.33% | 9.36% | -19.20% | 92.16% | |
62 Neutral | $14.18B | 21.98 | 5.94% | 12.18% | 2.28% | ― | |
59 Neutral | $10.80B | 31.94 | 3.98% | 13.93% | -18.28% | -10.62% | |
48 Neutral | $1.78B | 8.01 | -2.04% | 18.33% | 157.34% | 91.67% |
* Real Estate Sector Average
Performance Comparison
NLY
Annaly Capital
22.16
4.56
25.91%
AGNC
AGNC Investment
10.34
1.55
17.63%
ARR
ARMOUR Residential REIT
15.71
-1.69
-9.71%
BXMT
Blackstone Mortgage
19.93
3.43
20.79%
RITM
Rithm Capital
12.50
1.92
18.15%
STWD
Starwood Property
20.51
2.57
14.33%
Annaly Capital Corporate Events
Private Placements and FinancingDividendsFinancial Disclosures
Annaly Capital Reports Strong Q1 2025 Financial Performance
Positive
Apr 30, 2025
In its First Quarter 2025 earnings release, Annaly Capital Management reported a strong financial performance with an increase in dividend to $0.70 per share and earnings available for distribution at $0.72 per share. The company maintained a robust liquidity position with $7.5 billion in total assets available for financing and continued to grow its portfolio, particularly in Agency MBS. Annaly’s economic leverage increased slightly to 5.7x, and it raised $496 million through its at-the-market sales program. The Residential Credit business expanded its financing capacity by $400 million, and the company remained a leading issuer in the sector.
Spark’s Take on NLY Stock
According to Spark, TipRanks’ AI Analyst, NLY is a Neutral.
Annaly Capital’s overall score reflects a stable financial position and positive earnings call insights, suggesting resilience in a challenging market. Technical analysis shows mixed signals, and the company’s valuation is reasonable with a high dividend yield. The key strengths are financial stability and strategic growth, but revenue volatility and portfolio losses present risks.
To see Spark’s full report on NLY stock, click here.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.