Annaly Capital's Dividend Increase Amid Total Return Focus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 12 2017
0mins
Should l Buy NLY?
Source: SeekingAlpha
Annaly Capital Management Inc. has seen its stock price rise by 3.00%, reaching a 20-day high, as the company continues to attract investors with its competitive 12.8% dividend yield.
The recent increase in Annaly's dividend, while appealing, highlights the company's long-term strategy focused on total returns rather than consistent income generation. Despite the attractive yield, the volatility of its dividends poses risks for income-dependent investors, suggesting that Annaly may not be the best choice for those seeking stable income.
Investors should carefully evaluate their strategies, considering Annaly's performance against the S&P 500 index, as the company has outperformed the index since its IPO, but its dividend reliability remains questionable.
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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: 22.610
Low
21.50
Averages
23.09
High
25.00
Current: 22.610
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.
UBS Increases Target Price for Annaly Capital Management Inc. to $23 from $22.5
- Analyst Update: UBS has raised its target price for a specific asset from $22.5 to $23.
- Market Implications: This adjustment reflects UBS's positive outlook on the asset's performance in the market.
See More
Annaly Capital Management Q1 2026 Earnings Call Insights
- Economic Return Performance: Annaly achieved an economic return of 1.5% in Q1 2026, reflecting the strength of its diversified housing finance platform amidst challenges posed by geopolitical tensions and inflationary pressures.
- Capital Allocation Optimization: The company raised approximately $510 million through ATM financing, primarily allocated to Residential Credit and MSR, increasing their combined capital allocation from 38% to 44%, indicating a proactive approach to future growth.
- Loan and Securitization Activity: During the quarter, Annaly acquired $6.7 billion in whole loans, with lock volume reaching $7.4 billion, a 16% quarter-over-quarter and 41% year-over-year increase, while completing 8 securitizations totaling $4.7 billion, showcasing robust market demand.
- Asset and Liability Status: As of March 31, 2026, the company's book value per share decreased by 1.9% to $19.82, yet earnings available for distribution per share increased by $0.02 to $0.76, exceeding the quarterly dividend, demonstrating resilience in a challenging environment.
See More
Annaly Capital Management Q1 Earnings Beat Expectations
- Earnings Beat: Annaly Capital Management reported Q1 earnings of $0.76 per share, exceeding Wall Street's expectation of $0.74, and up from $0.74 in Q4 2025 and $0.72 in Q1 last year, indicating a sustained improvement in profitability.
- Asset Growth: Total assets reached $138.5 billion at the end of Q1, up from $135.6 billion at the end of Q4, reflecting effective capital allocation and adaptability to market conditions.
- Portfolio Performance: The residential credit portfolio increased by 30% to $10.3 billion, representing 23% of dedicated capital, demonstrating continued momentum across its whole loan correspondent channel and securitization platform, enhancing competitive positioning.
- Net Interest Income Increase: Q1 net interest income rose to $452.7 million, up from $366.6 million in Q4 and $220.0 million a year ago, showcasing the company's improved profitability amid changing interest rate environments.
See More
Annaly Capital Management Q1 Earnings Beat Expectations
- Earnings Beat: Annaly Capital Management reported a Q1 EAD of $0.76, surpassing expectations by $0.02, indicating the company's resilience and profitability amid economic fluctuations.
- Stable Economic Return: The economic return for the first quarter stood at 1.5%, reflecting the robustness of the company's investment portfolio despite a complex market environment, showcasing its ability to maintain stable earnings.
- Healthy Balance Sheet: The book value per common share reached $19.82, with GAAP leverage increasing from 7.2x to 7.3x and economic leverage rising from 5.6x to 5.7x, demonstrating prudent management in leveraging strategies.
- Portfolio Growth: The total portfolio expanded to $106.7 billion, including $92.2 billion in highly liquid agency assets, highlighting the company's strength in liquidity management and its ability to capitalize on market opportunities.
See More
Annaly Capital Management Set to Release Q1 Earnings on April 21
- Earnings Announcement: Annaly Capital Management is set to announce its Q1 2023 earnings on April 21 after market close, with consensus EPS estimate at $0.74, reflecting a 2.8% year-over-year increase, which could influence stock performance.
- Historical Performance Review: Over the past two years, Annaly has beaten EPS estimates 75% of the time, yet has not surpassed revenue estimates, indicating volatility in profitability that may concern investors.
- Expectation Revision Dynamics: In the last three months, EPS estimates have seen five upward revisions and three downward adjustments, while revenue estimates experienced one upward and one downward revision, reflecting mixed market sentiment regarding future performance.
- Dividend Declaration: Annaly Capital Management declared a dividend of $0.70 per share, demonstrating the company's ability to maintain cash flow and shareholder returns in the current economic climate, potentially attracting income-focused investors.
See More
Analysis of Annaly Capital's Investment Returns
- Total Return Performance: Since its IPO, Annaly Capital has outperformed the S&P 500 index, demonstrating its competitive edge in the market, particularly with its attractive 12.8% dividend yield that appeals to investors.
- Investment Structure Difference: As a mortgage real estate investment trust (REIT), Annaly Capital's portfolio resembles a mutual fund rather than a traditional property-owning REIT, indicating its focus on achieving high total returns rather than a stable stream of dividends.
- Dividend Volatility: Annaly's dividends have shown high volatility, historically experiencing dramatic increases and decreases, which has led to corresponding fluctuations in its stock price, prompting income-dependent investors to carefully consider their investment strategies.
- Future Dividend Outlook: Although the recent dividend increase may suggest an end to a series of cuts, the long-term perspective remains that Annaly is an unreliable dividend stock, making it more suitable for investors focused on total returns rather than consistent income generation.
See More
UBS Increases Target Price for Annaly Capital Management Inc. to $23 from $22.5
- Analyst Update: UBS has raised its target price for a specific asset from $22.5 to $23.
- Market Implications: This adjustment reflects UBS's positive outlook on the asset's performance in the market.
See More
Annaly Capital Management Q1 2026 Earnings Call Insights
- Economic Return Performance: Annaly achieved an economic return of 1.5% in Q1 2026, reflecting the strength of its diversified housing finance platform amidst challenges posed by geopolitical tensions and inflationary pressures.
- Capital Allocation Optimization: The company raised approximately $510 million through ATM financing, primarily allocated to Residential Credit and MSR, increasing their combined capital allocation from 38% to 44%, indicating a proactive approach to future growth.
- Loan and Securitization Activity: During the quarter, Annaly acquired $6.7 billion in whole loans, with lock volume reaching $7.4 billion, a 16% quarter-over-quarter and 41% year-over-year increase, while completing 8 securitizations totaling $4.7 billion, showcasing robust market demand.
- Asset and Liability Status: As of March 31, 2026, the company's book value per share decreased by 1.9% to $19.82, yet earnings available for distribution per share increased by $0.02 to $0.76, exceeding the quarterly dividend, demonstrating resilience in a challenging environment.
See More
Annaly Capital Management Q1 Earnings Beat Expectations
- Earnings Beat: Annaly Capital Management reported Q1 earnings of $0.76 per share, exceeding Wall Street's expectation of $0.74, and up from $0.74 in Q4 2025 and $0.72 in Q1 last year, indicating a sustained improvement in profitability.
- Asset Growth: Total assets reached $138.5 billion at the end of Q1, up from $135.6 billion at the end of Q4, reflecting effective capital allocation and adaptability to market conditions.
- Portfolio Performance: The residential credit portfolio increased by 30% to $10.3 billion, representing 23% of dedicated capital, demonstrating continued momentum across its whole loan correspondent channel and securitization platform, enhancing competitive positioning.
- Net Interest Income Increase: Q1 net interest income rose to $452.7 million, up from $366.6 million in Q4 and $220.0 million a year ago, showcasing the company's improved profitability amid changing interest rate environments.
See More
Annaly Capital Management Q1 Earnings Beat Expectations
- Earnings Beat: Annaly Capital Management reported a Q1 EAD of $0.76, surpassing expectations by $0.02, indicating the company's resilience and profitability amid economic fluctuations.
- Stable Economic Return: The economic return for the first quarter stood at 1.5%, reflecting the robustness of the company's investment portfolio despite a complex market environment, showcasing its ability to maintain stable earnings.
- Healthy Balance Sheet: The book value per common share reached $19.82, with GAAP leverage increasing from 7.2x to 7.3x and economic leverage rising from 5.6x to 5.7x, demonstrating prudent management in leveraging strategies.
- Portfolio Growth: The total portfolio expanded to $106.7 billion, including $92.2 billion in highly liquid agency assets, highlighting the company's strength in liquidity management and its ability to capitalize on market opportunities.
See More
Annaly Capital Management Set to Release Q1 Earnings on April 21
- Earnings Announcement: Annaly Capital Management is set to announce its Q1 2023 earnings on April 21 after market close, with consensus EPS estimate at $0.74, reflecting a 2.8% year-over-year increase, which could influence stock performance.
- Historical Performance Review: Over the past two years, Annaly has beaten EPS estimates 75% of the time, yet has not surpassed revenue estimates, indicating volatility in profitability that may concern investors.
- Expectation Revision Dynamics: In the last three months, EPS estimates have seen five upward revisions and three downward adjustments, while revenue estimates experienced one upward and one downward revision, reflecting mixed market sentiment regarding future performance.
- Dividend Declaration: Annaly Capital Management declared a dividend of $0.70 per share, demonstrating the company's ability to maintain cash flow and shareholder returns in the current economic climate, potentially attracting income-focused investors.
See More
Analysis of Annaly Capital's Investment Returns
- Total Return Performance: Since its IPO, Annaly Capital has outperformed the S&P 500 index, demonstrating its competitive edge in the market, particularly with its attractive 12.8% dividend yield that appeals to investors.
- Investment Structure Difference: As a mortgage real estate investment trust (REIT), Annaly Capital's portfolio resembles a mutual fund rather than a traditional property-owning REIT, indicating its focus on achieving high total returns rather than a stable stream of dividends.
- Dividend Volatility: Annaly's dividends have shown high volatility, historically experiencing dramatic increases and decreases, which has led to corresponding fluctuations in its stock price, prompting income-dependent investors to carefully consider their investment strategies.
- Future Dividend Outlook: Although the recent dividend increase may suggest an end to a series of cuts, the long-term perspective remains that Annaly is an unreliable dividend stock, making it more suitable for investors focused on total returns rather than consistent income generation.
See More
