Annaly Capital Management Reports Q3 EAD of $0.73, Strong Dividend Coverage
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 23 2025
0mins
Should l Buy NLY?
Source: Fool
- Earnings Growth: Annaly Capital Management reported an earnings available for distribution (EAD) of $0.73 per share in Q3, reflecting a 10.61% increase from $0.66 a year ago, which demonstrates the company's sustained profitability and enhances investor confidence.
- Dividend Payment Capability: The company’s dividend payment of $0.70 per share is fully covered by its EAD, indicating effective financial management while maintaining high dividend payouts, which attracts income-seeking investors.
- Market Volatility Impact: Although the current EAD exceeds the dividend level, fluctuations in EAD due to interest rates and market conditions necessitate caution from investors to mitigate potential risks associated with future dividend payments.
- Legal Compliance Requirement: As a mortgage REIT, Annaly is required to distribute 90% of its taxable income as dividends, which underpins its attractive yield that is over 10 times the S&P 500 average, while also necessitating vigilance regarding earnings volatility's impact on dividends.
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Analyst Views on NLY
Wall Street analysts forecast NLY stock price to rise
8 Analyst Rating
6 Buy
2 Hold
0 Sell
Strong Buy
Current: 22.930
Low
21.50
Averages
23.09
High
25.00
Current: 22.930
Low
21.50
Averages
23.09
High
25.00
About NLY
Annaly Capital Management, Inc. is a diversified capital manager with investment strategies across mortgage finance. It owns a portfolio of real estate related investments, including mortgage pass-through certificates, collateralized mortgage obligations, credit risk transfer (CRT) securities, and other securities representing interests in or obligations backed by pools of mortgage loans, residential mortgage loans and mortgage servicing rights. Its investment groups include Annaly Agency Group, Annaly Residential Credit Group, and Annaly Mortgage Servicing Rights Group. Annaly Agency Group invests in agency mortgage-backed securities collateralized by residential mortgages. Annaly Residential Credit Group invests in non-agency residential mortgage assets within residential and commercial markets. Annaly Mortgage Servicing Rights Group invests in MSR, which provides the right to service residential mortgage loans in exchange for a portion of the interest payments made on the loans.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Annaly Capital Management Q4 2025 Earnings Call Highlights
- Strong Economic Returns: Annaly Capital Management reported an economic return of 8.6% for Q4 2025, with over 20% for the full year, underscoring the resilience and competitive strength of its diversified housing finance strategies.
- Significant Capital Raising: The company raised $560 million in common equity in Q4 and $2.9 billion for 2025, enabling a 30% portfolio growth with double-digit increases across all investment strategies, enhancing its market position.
- Increase in Book Value: As of December 31, 2025, book value per share rose from $19.25 to $20.21, reflecting ongoing efforts to maintain strong liquidity and profitability, ensuring stable returns for shareholders.
- Forward-Looking Strategic Adjustments: Management anticipates continued growth in the non-Agency market and plans to allocate more capital towards non-Agency and MSR investments in response to market dynamics while maintaining flexibility.
See More
Annaly Capital Management Set to Release Q4 Earnings on January 28
- Earnings Announcement: Annaly Capital Management is set to announce its Q4 earnings on January 28, with consensus EPS estimated at $0.73 (up 1.34% YoY) and revenue at $567.67 million (up 203.10% YoY), indicating strong growth potential in a favorable market environment.
- Performance Expectations: Over the past two years, NLY has beaten EPS estimates 75% of the time, yet has not surpassed revenue estimates, reflecting challenges in revenue growth, although recent EPS estimates have seen four upward revisions and three downward revisions.
- Market Reaction and Analyst Ratings: Despite peer AGNC Investment's Q4 results falling short of expectations, NLY's stock rose in after-hours trading, with BTIG upgrading its rating from Neutral to Buy, indicating optimism about NLY's future performance, especially as spreads tighten.
- Management Outlook: UBS analysts noted that NLY's earnings report should reflect positive book value gains, with management's outlook on spreads and leverage/returns being key focal points, anticipating stable book value accretion in the coming quarters.
See More
Annaly Capital (NLY) Rallies 14% in Two Months with 12.9% Dividend Yield
- Dividend and Price Gains: Annaly Capital's stock surged 14% over the past two months, with an annualized return of 115% while offering a secure 12.9% dividend yield, highlighting its strong performance amid recession fears and attracting more income-focused investors.
- Favorable Market Conditions: As mortgage rates decline, the value of Annaly's government-backed mortgage assets increases, further solidifying its position as a 'financial landlord' and suggesting continued benefits from future interest rate shifts.
- Surging Power Demand: The Trump administration's agreement with Northeastern governors mandates tech giants to fund new power plants, potentially driving $15 billion in new construction and providing long-term contract support for power producers, boosting investor confidence in utilities.
- Diversified Investment Opportunity: Reaves Utility Income Fund (UTG) offers a 6.3% monthly dividend as a diversified investment in power companies, with expectations that UTG's price will rise as interest rates decline, enhancing overall investment returns.
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GEO Group Sees Options Trading Volume of 8,968 Contracts, 52% of Daily Average
- Active Options Trading: GEO Group's options trading volume reached 8,968 contracts, equivalent to approximately 896,800 shares, representing 52% of its average daily trading volume over the past month, indicating a significant increase in investor interest in the stock.
- High Strike Options Activity: Today, the $30 strike call option saw a trading volume of 4,010 contracts, representing about 401,000 shares, suggesting a growing market expectation for GEO's stock price to rise in the future.
- Annaly Capital Management Dynamics: In parallel, Annaly Capital Management recorded an options trading volume of 45,714 contracts, approximately 4.6 million shares, accounting for 51.9% of its average daily trading volume over the past month, reflecting strong market activity for the company’s stock.
- High Strike Call Options: The $24.50 strike call option for Annaly traded 25,217 contracts, representing around 2.5 million shares, indicating optimistic investor sentiment regarding its future performance, which could influence its stock price trajectory.
See More
2026 Stock Market and Economic Forecast from Barron’s Roundtable Experts
Market Concerns: Investors are increasingly worried about high valuations, index concentration, circular finance, persistent inflation, and rising government debt.
Geopolitical Developments: A significant geopolitical event occurred on January 3, with the capture of Venezuelan President Nicolás Maduro and his wife by U.S. troops, adding to market uncertainties.
See More
Mortgage Rates Drop to 6.15% by Year-End 2025, Signaling Relief for Homebuyers
- Rate Decline: As of December 31, 2025, the average 30-year fixed mortgage rate fell to 6.15% from 6.91% a year earlier, significantly reducing borrowing costs and likely stimulating homebuyer demand in 2026.
- Market Rebound: The continued decline in mortgage rates, coupled with slower home price growth, positions 2026 as a potential rebound year for the mortgage market, with improved financing conditions expected to boost transaction activity and stabilize demand.
- Investment Opportunities: Mortgage real estate investment trusts (mREITs) like Ellington Financial, Annaly Capital, and NexPoint Real Estate Finance are likely to benefit from the improving housing backdrop, attracting investor interest and enhancing fundamentals.
- Earnings Outlook: Ellington Financial anticipates year-over-year earnings growth of 25.3% and 1.6% for 2025 and 2026, respectively, indicating strong growth potential and reinforcing its market position.
See More
Annaly Capital Management Q4 2025 Earnings Call Highlights
- Strong Economic Returns: Annaly Capital Management reported an economic return of 8.6% for Q4 2025, with over 20% for the full year, underscoring the resilience and competitive strength of its diversified housing finance strategies.
- Significant Capital Raising: The company raised $560 million in common equity in Q4 and $2.9 billion for 2025, enabling a 30% portfolio growth with double-digit increases across all investment strategies, enhancing its market position.
- Increase in Book Value: As of December 31, 2025, book value per share rose from $19.25 to $20.21, reflecting ongoing efforts to maintain strong liquidity and profitability, ensuring stable returns for shareholders.
- Forward-Looking Strategic Adjustments: Management anticipates continued growth in the non-Agency market and plans to allocate more capital towards non-Agency and MSR investments in response to market dynamics while maintaining flexibility.
See More
Annaly Capital Management Set to Release Q4 Earnings on January 28
- Earnings Announcement: Annaly Capital Management is set to announce its Q4 earnings on January 28, with consensus EPS estimated at $0.73 (up 1.34% YoY) and revenue at $567.67 million (up 203.10% YoY), indicating strong growth potential in a favorable market environment.
- Performance Expectations: Over the past two years, NLY has beaten EPS estimates 75% of the time, yet has not surpassed revenue estimates, reflecting challenges in revenue growth, although recent EPS estimates have seen four upward revisions and three downward revisions.
- Market Reaction and Analyst Ratings: Despite peer AGNC Investment's Q4 results falling short of expectations, NLY's stock rose in after-hours trading, with BTIG upgrading its rating from Neutral to Buy, indicating optimism about NLY's future performance, especially as spreads tighten.
- Management Outlook: UBS analysts noted that NLY's earnings report should reflect positive book value gains, with management's outlook on spreads and leverage/returns being key focal points, anticipating stable book value accretion in the coming quarters.
See More
Annaly Capital (NLY) Rallies 14% in Two Months with 12.9% Dividend Yield
- Dividend and Price Gains: Annaly Capital's stock surged 14% over the past two months, with an annualized return of 115% while offering a secure 12.9% dividend yield, highlighting its strong performance amid recession fears and attracting more income-focused investors.
- Favorable Market Conditions: As mortgage rates decline, the value of Annaly's government-backed mortgage assets increases, further solidifying its position as a 'financial landlord' and suggesting continued benefits from future interest rate shifts.
- Surging Power Demand: The Trump administration's agreement with Northeastern governors mandates tech giants to fund new power plants, potentially driving $15 billion in new construction and providing long-term contract support for power producers, boosting investor confidence in utilities.
- Diversified Investment Opportunity: Reaves Utility Income Fund (UTG) offers a 6.3% monthly dividend as a diversified investment in power companies, with expectations that UTG's price will rise as interest rates decline, enhancing overall investment returns.
See More
GEO Group Sees Options Trading Volume of 8,968 Contracts, 52% of Daily Average
- Active Options Trading: GEO Group's options trading volume reached 8,968 contracts, equivalent to approximately 896,800 shares, representing 52% of its average daily trading volume over the past month, indicating a significant increase in investor interest in the stock.
- High Strike Options Activity: Today, the $30 strike call option saw a trading volume of 4,010 contracts, representing about 401,000 shares, suggesting a growing market expectation for GEO's stock price to rise in the future.
- Annaly Capital Management Dynamics: In parallel, Annaly Capital Management recorded an options trading volume of 45,714 contracts, approximately 4.6 million shares, accounting for 51.9% of its average daily trading volume over the past month, reflecting strong market activity for the company’s stock.
- High Strike Call Options: The $24.50 strike call option for Annaly traded 25,217 contracts, representing around 2.5 million shares, indicating optimistic investor sentiment regarding its future performance, which could influence its stock price trajectory.
See More
2026 Stock Market and Economic Forecast from Barron’s Roundtable Experts
Market Concerns: Investors are increasingly worried about high valuations, index concentration, circular finance, persistent inflation, and rising government debt.
Geopolitical Developments: A significant geopolitical event occurred on January 3, with the capture of Venezuelan President Nicolás Maduro and his wife by U.S. troops, adding to market uncertainties.
See More
Mortgage Rates Drop to 6.15% by Year-End 2025, Signaling Relief for Homebuyers
- Rate Decline: As of December 31, 2025, the average 30-year fixed mortgage rate fell to 6.15% from 6.91% a year earlier, significantly reducing borrowing costs and likely stimulating homebuyer demand in 2026.
- Market Rebound: The continued decline in mortgage rates, coupled with slower home price growth, positions 2026 as a potential rebound year for the mortgage market, with improved financing conditions expected to boost transaction activity and stabilize demand.
- Investment Opportunities: Mortgage real estate investment trusts (mREITs) like Ellington Financial, Annaly Capital, and NexPoint Real Estate Finance are likely to benefit from the improving housing backdrop, attracting investor interest and enhancing fundamentals.
- Earnings Outlook: Ellington Financial anticipates year-over-year earnings growth of 25.3% and 1.6% for 2025 and 2026, respectively, indicating strong growth potential and reinforcing its market position.
See More
