Yield Analysis of Annaly and AGNC Investments
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 23 2026
0mins
Source: NASDAQ.COM
- Yield Comparison: AGNC Investment boasts a yield of 13.9%, while Annaly Capital offers 12.9%, both significantly higher than the S&P 500's 1.1% and the average financial stock's 1.5%, indicating strong income potential but also heightened risk.
- Dividend History Volatility: Despite their attractive yields, both mREITs have experienced significant dividend volatility, making them less suitable for investors seeking stable income, particularly during periods of declining dividends.
- Total Return Potential: For investors focused on total returns, both Annaly and AGNC have delivered returns comparable to the S&P 500, suggesting that with the right investment strategy, these mREITs can provide valuable diversification benefits to a portfolio.
- Investment Preference: AGNC is fully focused on agency mortgage securities, while Annaly has a more diversified business model that includes non-agency mortgages and mortgage servicing, leading investors to choose based on their preference for diversification.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy NLY?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
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: 21.600
Low
21.50
Averages
23.09
High
25.00
Current: 21.600
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.
Key Considerations for Mortgage REIT Investors
- High Yield Risks: Annaly Capital and AGNC Investment boast dividend yields of 13.05% and 14.10%, respectively, which are attractive but come with significant volatility in dividend history, making them potentially unsuitable for income-dependent investors.
- Return Analysis: Despite the dividend fluctuations, long-term investors who reinvest dividends have seen total returns from Annaly and AGNC comparable to the S&P 500, indicating their diversification value in asset allocation strategies.
- Business Model Differences: AGNC focuses on owning and managing agency mortgage securities guaranteed by entities like Fannie Mae, while Annaly operates a more diversified model that includes non-agency mortgages and mortgage servicing, providing a more stable cash flow.
- Economic Return Performance: In Q1 2026, AGNC reported a negative economic return of 1.8%, while Annaly achieved a positive economic return of 1.5%, highlighting the differing performances of the two mREITs amid market volatility, necessitating investor preference based on risk tolerance.
See More
Yield Analysis of Annaly and AGNC Investments
- Yield Comparison: AGNC Investment boasts a yield of 13.9%, while Annaly Capital offers 12.9%, both significantly higher than the S&P 500's 1.1% and the average financial stock's 1.5%, indicating strong income potential but also heightened risk.
- Dividend History Volatility: Despite their attractive yields, both mREITs have experienced significant dividend volatility, making them less suitable for investors seeking stable income, particularly during periods of declining dividends.
- Total Return Potential: For investors focused on total returns, both Annaly and AGNC have delivered returns comparable to the S&P 500, suggesting that with the right investment strategy, these mREITs can provide valuable diversification benefits to a portfolio.
- Investment Preference: AGNC is fully focused on agency mortgage securities, while Annaly has a more diversified business model that includes non-agency mortgages and mortgage servicing, leading investors to choose based on their preference for diversification.
See More
Annaly Capital Management Stock Continues Downward Trend
- Poor Stock Performance: Annaly Capital Management's stock has declined nearly 5% over the past month and is down 4.87% year-to-date, significantly underperforming the S&P 500's 8.43% gain, indicating weakness in its market position.
- Earnings Beat Expectations: Despite the stock decline, the company reported stronger-than-expected Q1 results on April 21, with earnings available for distribution at $0.76 per share, surpassing Wall Street's $0.74 estimate and rising from $0.74 in Q4, highlighting growth potential in its non-agency business.
- Portfolio Expansion: Annaly expanded its residential credit portfolio by 30% to $10.3 billion and increased its mortgage servicing rights portfolio by 9% to $4.2 billion, demonstrating a proactive strategy in diversifying its investments.
- Optimistic Future Outlook: CEO David Finkelstein stated that Annaly is positioned for “attractive risk-adjusted returns” through 2026, focusing on growth in residential credit and mortgage servicing rights, although analysts currently rate the stock as a Hold, reflecting cautious sentiment about its future performance.
See More
Annaly Capital Management Performance Analysis
- High Dividend Yield: Annaly Capital's dividend yield stands at approximately 13%, significantly higher than the S&P 500's 1.1%, indicating its attractiveness in the market, even as its stock trades above book value, it continues to draw investor interest.
- Portfolio Growth: As of the first quarter, Annaly's total investment portfolio reached $106.7 billion, an increase of $2 billion from the end of last year, with $92.2 billion in government-backed mortgage securities, showcasing its strong position in the mortgage market.
- Capital Raising Ability: The company successfully raised $509 million in capital during the first quarter, primarily for residential credit and mortgage servicing rights investments, demonstrating its effective capital management by leveraging its stock price premium.
- Improved Profitability: Annaly's earnings available for distribution (EAD) was $0.76 per share, exceeding the $0.70 dividend, and showing growth from the previous year, indicating enhanced profitability and sustainability of its dividend.
See More
Annaly Capital: A Giant REIT's Investment and Dividend Outlook
- Portfolio Size: Annaly Capital's total investment portfolio reached $106.7 billion, increasing by $2 billion from the end of last year, with $92.2 billion in government-backed mortgage securities, highlighting its strong position in the mortgage market.
- Capital Raising Ability: In the first quarter, Annaly successfully raised $509 million in capital, primarily for residential credit and mortgage servicing rights investments, demonstrating its effective financing capability and investment strategy in the market.
- Book Value Per Share: As of the end of the first quarter, Annaly's book value per share was $19.82, below the market price of $21.50, reflecting investor recognition of its quality portfolio despite a decline in book value.
- Dividend Sustainability: Annaly's earnings available for distribution (EAD) stood at $0.76 per share, exceeding the $0.70 dividend, with EAD growing over the past year, supporting nearly an 8% increase in dividends, indicating the safety and sustainability of its dividend.
See More
Strategies for Generating Income with Real Estate Investment Trusts
- Capital Requirement Analysis: To achieve an annual retirement income of $50,000, investors need approximately $1.11 million in capital, with half sourced from traditional dividend stocks and the other half from real estate investments, significantly impacting income performance over the next two decades.
- Yield Tier Breakdown: Conservative investors require about $1.43 million in capital to achieve a 3% to 4% yield, while a moderate 5.5% yield necessitates around $909,091, illustrating how different yield tiers directly influence capital needs.
- Tax Implications for REITs: REIT distributions are typically taxed as ordinary income, but the Section 199A deduction allows investors to deduct 20% of eligible REIT dividends, effectively lowering the tax rate to approximately 17.6%, which is crucial for enhancing after-tax income.
- Diversification Investment Advice: Investors are advised to diversify their REIT investments across subsectors to mitigate concentration risk, especially in the current environment where the 10-year Treasury yield stands at 4.59%, significantly increasing risks associated with any single REIT category.
See More
Key Considerations for Mortgage REIT Investors
- High Yield Risks: Annaly Capital and AGNC Investment boast dividend yields of 13.05% and 14.10%, respectively, which are attractive but come with significant volatility in dividend history, making them potentially unsuitable for income-dependent investors.
- Return Analysis: Despite the dividend fluctuations, long-term investors who reinvest dividends have seen total returns from Annaly and AGNC comparable to the S&P 500, indicating their diversification value in asset allocation strategies.
- Business Model Differences: AGNC focuses on owning and managing agency mortgage securities guaranteed by entities like Fannie Mae, while Annaly operates a more diversified model that includes non-agency mortgages and mortgage servicing, providing a more stable cash flow.
- Economic Return Performance: In Q1 2026, AGNC reported a negative economic return of 1.8%, while Annaly achieved a positive economic return of 1.5%, highlighting the differing performances of the two mREITs amid market volatility, necessitating investor preference based on risk tolerance.
See More
Yield Analysis of Annaly and AGNC Investments
- Yield Comparison: AGNC Investment boasts a yield of 13.9%, while Annaly Capital offers 12.9%, both significantly higher than the S&P 500's 1.1% and the average financial stock's 1.5%, indicating strong income potential but also heightened risk.
- Dividend History Volatility: Despite their attractive yields, both mREITs have experienced significant dividend volatility, making them less suitable for investors seeking stable income, particularly during periods of declining dividends.
- Total Return Potential: For investors focused on total returns, both Annaly and AGNC have delivered returns comparable to the S&P 500, suggesting that with the right investment strategy, these mREITs can provide valuable diversification benefits to a portfolio.
- Investment Preference: AGNC is fully focused on agency mortgage securities, while Annaly has a more diversified business model that includes non-agency mortgages and mortgage servicing, leading investors to choose based on their preference for diversification.
See More
Annaly Capital Management Stock Continues Downward Trend
- Poor Stock Performance: Annaly Capital Management's stock has declined nearly 5% over the past month and is down 4.87% year-to-date, significantly underperforming the S&P 500's 8.43% gain, indicating weakness in its market position.
- Earnings Beat Expectations: Despite the stock decline, the company reported stronger-than-expected Q1 results on April 21, with earnings available for distribution at $0.76 per share, surpassing Wall Street's $0.74 estimate and rising from $0.74 in Q4, highlighting growth potential in its non-agency business.
- Portfolio Expansion: Annaly expanded its residential credit portfolio by 30% to $10.3 billion and increased its mortgage servicing rights portfolio by 9% to $4.2 billion, demonstrating a proactive strategy in diversifying its investments.
- Optimistic Future Outlook: CEO David Finkelstein stated that Annaly is positioned for “attractive risk-adjusted returns” through 2026, focusing on growth in residential credit and mortgage servicing rights, although analysts currently rate the stock as a Hold, reflecting cautious sentiment about its future performance.
See More
Annaly Capital Management Performance Analysis
- High Dividend Yield: Annaly Capital's dividend yield stands at approximately 13%, significantly higher than the S&P 500's 1.1%, indicating its attractiveness in the market, even as its stock trades above book value, it continues to draw investor interest.
- Portfolio Growth: As of the first quarter, Annaly's total investment portfolio reached $106.7 billion, an increase of $2 billion from the end of last year, with $92.2 billion in government-backed mortgage securities, showcasing its strong position in the mortgage market.
- Capital Raising Ability: The company successfully raised $509 million in capital during the first quarter, primarily for residential credit and mortgage servicing rights investments, demonstrating its effective capital management by leveraging its stock price premium.
- Improved Profitability: Annaly's earnings available for distribution (EAD) was $0.76 per share, exceeding the $0.70 dividend, and showing growth from the previous year, indicating enhanced profitability and sustainability of its dividend.
See More
Annaly Capital: A Giant REIT's Investment and Dividend Outlook
- Portfolio Size: Annaly Capital's total investment portfolio reached $106.7 billion, increasing by $2 billion from the end of last year, with $92.2 billion in government-backed mortgage securities, highlighting its strong position in the mortgage market.
- Capital Raising Ability: In the first quarter, Annaly successfully raised $509 million in capital, primarily for residential credit and mortgage servicing rights investments, demonstrating its effective financing capability and investment strategy in the market.
- Book Value Per Share: As of the end of the first quarter, Annaly's book value per share was $19.82, below the market price of $21.50, reflecting investor recognition of its quality portfolio despite a decline in book value.
- Dividend Sustainability: Annaly's earnings available for distribution (EAD) stood at $0.76 per share, exceeding the $0.70 dividend, with EAD growing over the past year, supporting nearly an 8% increase in dividends, indicating the safety and sustainability of its dividend.
See More
Strategies for Generating Income with Real Estate Investment Trusts
- Capital Requirement Analysis: To achieve an annual retirement income of $50,000, investors need approximately $1.11 million in capital, with half sourced from traditional dividend stocks and the other half from real estate investments, significantly impacting income performance over the next two decades.
- Yield Tier Breakdown: Conservative investors require about $1.43 million in capital to achieve a 3% to 4% yield, while a moderate 5.5% yield necessitates around $909,091, illustrating how different yield tiers directly influence capital needs.
- Tax Implications for REITs: REIT distributions are typically taxed as ordinary income, but the Section 199A deduction allows investors to deduct 20% of eligible REIT dividends, effectively lowering the tax rate to approximately 17.6%, which is crucial for enhancing after-tax income.
- Diversification Investment Advice: Investors are advised to diversify their REIT investments across subsectors to mitigate concentration risk, especially in the current environment where the 10-year Treasury yield stands at 4.59%, significantly increasing risks associated with any single REIT category.
See More
