Latest news with #NLY
Yahoo
28-05-2025
- Business
- Yahoo
Why Annaly Capital Management (NLY) is a Top Value Stock for the Long-Term
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike. While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics. Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks. 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. Its investment portfolio includes mortgage pass-through certificates, collateralized mortgage obligations (CMOs), credit risk transfer (CRT). The company's investment may also comprise, other securities indicating interests in or obligations backed by pools of mortgage loans, residential mortgage loans, MSR and corporate debt. NLY is a Zacks Rank #3 (Hold) stock, with a Value Style Score of B and VGM Score of B. Shares are currently trading at a forward P/E of 6.6X for the current fiscal year compared to the REIT and Equity Trust industry's P/E of 8.2X. Additionally, NLY has a PEG Ratio of 4.2 and a Price/Cash Flow ratio of 6.2X. Value investors should also note NLY's Price/Sales ratio of 2.2X. Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.06 to $2.87 per share. NLY has an average earnings surprise of 2.6%. With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding NLY to their portfolios. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Annaly Capital Management Inc (NLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
10-05-2025
- Business
- Yahoo
Meet the 14% Yield Dividend Stock That Raised Its Payout Recently
Shares of Annaly Capital Management have been offering a dividend yield above 14% at recent prices. Annaly Capital is a real estate investment trust that invests in mortgage-backed securities instead of physical real estate. 10 stocks we like better than Annaly Capital Management › If you go sifting the market for ultra-high-yield dividend payers, it won't take long before you land on Annaly Capital Management (NYSE: NLY). The stock offers a dividend yield above 14% at recent prices. That's more than 10 times higher than the average dividend payer in the benchmark S&P 500 (SNPINDEX: ^GSPC). Stocks generally don't offer yields at double-digit percentages unless investors are concerned their underlying businesses won't be able to meet their dividend commitment. Annaly Capital recently did the unthinkable. Even though its yield seems unsustainable, the company raised its quarterly payout by 7.7% this March to $0.70 per share. With its yield so high, it will take a little over five years before Annaly returns your entire principal investment. On the surface, this seems like a no-brainer stock to buy for income seekers, but there are a few things you should know about real estate investment trusts (REITs) that don't own real estate. Like every other REIT, Annaly can legally avoid income taxes by distributing at least 90% of its profits to investors as dividend payments. Unlike most REITs, though, it doesn't invest in real estate. Instead, it invests in mortgage-backed securities (MBS) backed by government agencies, mortgage servicing rights (MSR), and residential credit. March 31, 2023 Agency MBS MSR Residential Credit Portfolio asset value $77.6 billion $1.8 billion $5.2 billion Committed capital $7.7 billion $1.8 billion $2.1 billion Illustrative levered returns 14%-16% 9%-12% 12%-15% Portfolio asset value $75 billion $3.3 billion $6.6 billion Committed capital $8.0 billion $2.7 billion $2.4 billion Illustrative levered returns 16%-19% 12%-14% 13%-16% Data source: Annaly Capital Management. Table by author. With increasing returns from all three components of its portfolio, Annaly reported earnings available for distribution that reached $0.72 per share in the first quarter. That's in line with the previous quarter and slightly more than it needs to meet its recently increased commitment of $0.70 per share. Agency MBSes aren't as large a component of Annaly's portfolio as they seem due to heavy leverage. At the end of March, the company was using about $8 billion in capital to reap returns from an MBS portfolio worth $75 billion. Annaly's growing mortgage servicing business handles administrative tasks of a mortgage on behalf of the original lender, such as billing and payment collection. Servicers typically receive 0.25% of outstanding loan balances. Diversification toward residential credit and mortgage servicing is a step in the right direction, but investors who need reliable sources of income may want to keep looking. If you're excited about the high yields mortgage REITs (mREITs) offer, just remember that their loans are secured by their MBS portfolios. The carrying value of MBS or any asset that pays a predetermined yield can shrink significantly when the Federal Reserve raises interest rates. When interest rates change slowly with lots of foreshadowing by the Federal Reserve, a well-run mortgage REIT like Annaly can trim unattractive assets and acquire new ones fast enough to maintain its dividend payout. A rapid rate increase, such as the one we experienced a few years ago, though, can throw a wrench in the company's gearbox. In a nutshell, rapidly rising rates a few years ago led Annaly to reduce its dividend by 26% in early 2023. If you look back further, you'll see this mortgage REIT has reduced its dividend payout several times over the past decade. Annaly is by no means an outlier, either. Its peers in the mREIT space, AGNC Investment and MFA Financial, also have significant dividend reductions in their recent history. At its latest meeting, the Federal Reserve decided to maintain the federal funds rate in a range between 4.25% and 4.5%, but promised to continue reducing its MBS portfolio. While we can reasonably expect Annaly to maintain its recently increased dividend payout for a few more quarters, what happens after that is guesswork. With a future so foggy, passing on this stock is the right move for most income-seeking investors. 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The Motley Fool has a disclosure policy. Meet the 14% Yield Dividend Stock That Raised Its Payout Recently was originally published by The Motley Fool
San Francisco Chronicle
30-04-2025
- Business
- San Francisco Chronicle
Annaly: Q1 Earnings Snapshot
NEW YORK (AP) — NEW YORK (AP) — Annaly Capital Management Inc. (NLY) on Wednesday reported first-quarter profit of $124.2 million. On a per-share basis, the New York-based company said it had net income of 15 cents. Earnings, adjusted for non-recurring costs, came to 72 cents per share. The results surpassed Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 71 cents per share. The real estate investment trust posted revenue of $1.32 billion in the period. Its adjusted revenue was $220 million.
Yahoo
28-04-2025
- Business
- Yahoo
AGNC Investment Vs Annaly: Which High-Yield mREIT is a Smarter Play?
AGNC Investment Corp. AGNC and Annaly Capital Management NLY are two of the biggest names within the mortgage real estate investment trusts (mREITs) industry. Both offer favorable long-term stockholder returns and massive dividend yields. But which one offers the better opportunity for investors right now? Let us break down the strengths, risks and growth potential of these two leading industry players. AGNC has maintained its focus entirely on agency mortgage-backed securities (MBS), a strategy that has positioned it as a strong player in this specialized market segment. The company primarily focuses on leveraged investments in Agency RMBS, including residential mortgage pass-through securities and collateralized mortgage obligations. A U.S. Government agency or a U.S. Government-sponsored enterprise guarantees the principal and interest payments for such investments. The fundamental outlook for fixed income, particularly agency MBS assets, has shown signs of improvement lately. AGNC Investment's management believes that the agency MBS market can benefit from a combination of factors, including a steepening yield curve and reduced rate volatility. However, execution will be crucial to achieving these advantages. Conversely, NLY has adopted a broader diversified capital allocation strategy. The company's investment portfolio includes residential credit, mortgage servicing rights (MSR), and agency MBS. This comprehensive strategy aims to lower volatility and sensitivity to interest rate changes while simultaneously generating appealing risk-adjusted returns. NLY's diversified investment strategy will likely be a key contributor to long-term growth and stability. Annaly's diversified strategy is not just for stability but also for long-term growth, with multiple aspects to pull across different cycles in the housing and credit markets. AGNC Investment and Annaly are showcasing strong capital distribution programs that reflect confidence in their liquidity and earnings stability. Both have a record of paying monthly dividends. AGNC currently has a staggering dividend yield of 16.27% compared with the industry's average of 11.3%. It currently sits at a payout ratio of 81%. The company has raised its dividend once in the last five years. NLY also pays a quarterly dividend. In March, it announced a cash dividend of 70 cents per share for the first quarter of 2025, marking a 7.7% hike from the prior payout. Its current dividend yield is 14.58%, and its payout ratio is 96% of its earnings. The company has raised its dividend twice in the last five years. Image Source: Zacks Investment Research Dividends aside, AGNC has a share repurchase plan in place. In October 2024, the company's board of directors terminated the existing stock repurchase plan and replaced it with a new plan authorizing it to repurchase up to $1 billion of common stock through Dec. 31, 2026. Similarly, Annaly has a share repurchase plan in place. In December 2024, NLY's board of directors authorized a common share repurchase program, which will expire on Dec. 31, 2029. Under the program, the company may repurchase up to $1.5 billion of its outstanding shares of common stock. AGNC and NLY are sensitive to interest rate changes, though the impacts vary. AGNC Investment's performance and prospects are significantly influenced by the interest rate environment due to its concentrated agency MBS exposure. While these government-backed assets offer low credit risk, they leave AGNC vulnerable to rapid shifts in short-term rates. When interest rates rise, AGNC's borrowing costs increase quickly, hurting profit margins. Though the company actively uses hedging strategies such as interest rate swaps and options to manage some of this exposure, hedges can only partially reduce the impacts. AGNC's financials have been adversely impacted since early 2022 when the Fed began its interest rate hiking cycle. It recorded interest expenses of $75 million in 2021, which surged 733% to $625 million in 2022. Also, the interest expenses rose 266% year over year to $2.3 billion in 2023. On the contrary, Annaly has positioned itself to better withstand interest rate volatility through its diversified portfolio, particularly with its investments in MSR, and residential and commercial credit assets. Given this, the increase in NLY's borrowing costs was lower than AGNC's in the period of high interest rates. In 2021, Annaly recorded an interest expense of $249 million, which increased by 425% to $1.3 billion in 2022. Also, interest expense rose 193% year over year to $3.8 billion in 2023. MSR increases in value when interest rates rise because higher rates reduce mortgage prepayment activity. This dynamic allows Annaly to offset the typical decline in agency MBS valuations that occurs during periods of rising rates. Residential credit includes non-agency mortgages and securitized loans that are more credit-sensitive than rate-sensitive, offering higher yields and different risk profiles than agency MBS. The Zacks Consensus Estimate for AGNC's 2025 and 2026 earnings implies year-over-year declines of 11.2% and 3.9%, respectively. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NLY's 2025 and 2026 earnings implies year-over-year increases of 5.6% and 1.2%, respectively. (See the Zacks Earnings Calendar to stay ahead of market-making news.) Image Source: Zacks Investment Research Over the past year, both AGNC and NLY outperformed the industry. AGNC Investment has gained 11.2% and Annaly has risen 16.6% against the industry's decline of 0.2%. Image Source: Zacks Investment Research From a valuation standpoint, AGNC and NLY appear expensive relative to the industry. AGNC Investment is currently trading at a premium with a forward 12-month price-to-tangible book (P/TB) multiple of 1.07X, while Annaly is trading at a forward 12-month (P/TB) multiple of 0.98X. Both are above the industry average of 0.90X. Nonetheless, NLY is trading at a discount to AGNC. Image Source: Zacks Investment Research AGNC Investment and Annaly have a record of reducing dividends during stressful times, but NLY's recent payouts have been more stable than AGNC's. Also, Annaly has recently hiked its dividend, reflecting the company's confidence in its earnings and liquidity position. Further, AGNC has mainly exposure to the agency MBS sector, positioning it to have more exposure to rate-driven volatility. Alternatively, NLY provides diversification and balance, which are better suited to offset interest rate fluctuations and capitalize on opportunities. Annaly's 2025 and 2026 earnings growth trajectories are impressive. Also, in terms of price performance and valuation, NLY appears more attractive. Hence, investors looking for long-term stability with a higher dividend yield can consider parking their cash in the Annaly stock at current levels. Both AGNC and NLY currently carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AGNC Investment Corp. (AGNC) : Free Stock Analysis Report Annaly Capital Management Inc (NLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
16-02-2025
- Business
- Yahoo
Annaly Capital Management Full Year 2024 Earnings: EPS Beats Expectations, Revenues Lag
Net income: US$847.4m (up from US$1.78b loss in FY 2023). EPS: US$1.62 (up from US$3.61 loss in FY 2023). All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue missed analyst estimates by 81%. Earnings per share (EPS) exceeded analyst estimates by 5.7%. The primary driver behind last 12 months revenue was the Mortgage Servicing Rights (msr) segment contributing a total revenue of US$466.1m (37% of total revenue). Explore how NLY's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 25% p.a. on average during the next 3 years, compared to a 20% growth forecast for the Mortgage REITs industry in the US. Performance of the American Mortgage REITs industry. The company's shares are up 3.4% from a week ago. It is worth noting though that we have found 3 warning signs for Annaly Capital Management (1 can't be ignored!) that you need to take into consideration. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
