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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 61.3GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
6.9%
Sector: 8.5%
Dividend Analysis audit
HIGH YIELD
13.61%
Trailing Yield
$13.61
Per $100 Invested
Attractive yield supported by strong profitability.
Est. Payout Ratio
186%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, ANNALY CAPITAL MANAGEMENT INC (NLY) receives a "Hold" rating with a composite score of 54.2/100, ranked #1063 out of 4446 stocks. Key factor scores: Quality 61/100, Value 77/100, Momentum 43/100. This is quantitative analysis only — not investment advice.
ANNALY CAPITAL MANAGEMENT INC (NLY) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does ANNALY CAPITAL MANAGEMENT INC Do?
Annaly 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. ANNALY CAPITAL MANAGEMENT INC (NLY) is classified as a large-cap stock in the Financials sector, specifically within the Trading industry. The company is led by CEO David L. Finkelstein and employs approximately 160 people, headquartered in New York, New York. With a market capitalization of $15.2B, NLY is one of the prominent companies in the Financials sector.
ANNALY CAPITAL MANAGEMENT INC (NLY) Stock Rating — Hold (April 2026)
As of April 2026, ANNALY CAPITAL MANAGEMENT INC receives a Hold rating with a composite score of 54.2/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.NLY ranks #1,063 out of 4,446 stocks in our coverage universe. Within the Financials sector, ANNALY CAPITAL MANAGEMENT INC ranks #329 of 891 stocks, placing it in the upper half of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
NLY Stock Price and 52-Week Range
ANNALY CAPITAL MANAGEMENT INC (NLY) currently trades at $22.14. The stock gained $0.04 (0.2%) in the most recent trading session. The 52-week high for NLY is $24.52, which means the stock is currently trading -9.7% from its annual peak. The 52-week low is $16.59, putting the stock 33.4% above its annual trough. Recent trading volume was 4.4M shares, reflecting moderate market activity.
Is NLY Overvalued or Undervalued? — Valuation Analysis
ANNALY CAPITAL MANAGEMENT INC (NLY) carries a value factor score of 77/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 13.66x, compared to the Financials sector average of 14.88x — a discount of 8%. The price-to-book ratio stands at 0.94x, versus the sector average of 1.22x. The price-to-sales ratio is 19.49x, compared to 0.90x for the average Financials stock. On an enterprise value basis, NLY trades at 13.73x EV/EBITDA, versus 3.26x for the sector.
Based on these multiples, ANNALY CAPITAL MANAGEMENT INC appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
ANNALY CAPITAL MANAGEMENT INC Profitability — ROE, Margins, and Quality Score
ANNALY CAPITAL MANAGEMENT INC (NLY) earns a quality factor score of 61/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 6.9%, compared to the Financials sector average of 8.5%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 0.8% versus the sector average of 1.2%.
On a margin basis, ANNALY CAPITAL MANAGEMENT INC reports gross margins of 0.0%. The operating margin is 239.2% (sector: 21.8%). Net profit margin stands at 250.4%, versus 17.7% for the average Financials stock. Revenue growth is running at 414.9% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
NLY Debt, Balance Sheet, and Financial Health
ANNALY CAPITAL MANAGEMENT INC has a debt-to-equity ratio of 739.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.14x, suggesting adequate working capital coverage. Total debt on the balance sheet is $29.66B. Cash and equivalents stand at $2.10B.
NLY has a beta of 0.67, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for ANNALY CAPITAL MANAGEMENT INC is 83/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
ANNALY CAPITAL MANAGEMENT INC Revenue and Earnings History — Quarterly Trend
In TTM 2026, ANNALY CAPITAL MANAGEMENT INC reported revenue of $782M and earnings per share (EPS) of $2.92. Net income for the quarter was $1.12B. Gross margin was 0.0%. Operating income came in at $1.11B.
In FY 2025, ANNALY CAPITAL MANAGEMENT INC reported revenue of $1.14B and earnings per share (EPS) of $2.92. Net income for the quarter was $2.05B. Revenue grew 358.2% year-over-year compared to FY 2024. Operating income came in at $2.04B.
In Q3 2025, ANNALY CAPITAL MANAGEMENT INC reported revenue of $276M and earnings per share (EPS) of $1.21. Net income for the quarter was $843M. Revenue grew 1957.7% year-over-year compared to Q3 2024. Operating income came in at $835M.
In Q2 2025, ANNALY CAPITAL MANAGEMENT INC reported revenue of $273M and earnings per share (EPS) of $0.03. Net income for the quarter was $60M. Revenue grew 410.1% year-over-year compared to Q2 2024. Operating income came in at $61M.
Over the past 8 quarters, ANNALY CAPITAL MANAGEMENT INC has demonstrated a growth trajectory, with revenue expanding from $54M to $782M. Investors analyzing NLY stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
NLY Dividend Yield and Income Analysis
ANNALY CAPITAL MANAGEMENT INC (NLY) currently pays a dividend yield of 13.6%. At this yield, a $10,000 investment in NLY stock would generate approximately $$1361.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning NLY offers above-average income for its sector. With a net margin of 250.4%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
NLY Momentum and Technical Analysis Profile
ANNALY CAPITAL MANAGEMENT INC (NLY) has a momentum factor score of 43/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 21/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 32/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
NLY vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing NLY against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full NLY vs S&P 500 (SPY) comparison to assess how ANNALY CAPITAL MANAGEMENT INC stacks up against the broader market across all factor dimensions.
NLY Next Earnings Date
No upcoming earnings date has been announced for ANNALY CAPITAL MANAGEMENT INC (NLY) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy NLY? — Investment Thesis Summary
ANNALY CAPITAL MANAGEMENT INC presents a balanced picture with arguments on both sides. The quality score of 61/100 indicates above-average profitability and business fundamentals. The value score of 77/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 83/100) reduces downside risk.
In summary, ANNALY CAPITAL MANAGEMENT INC (NLY) earns a Hold rating with a composite score of 54.2/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on NLY stock.
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Institutional Research Dossier
ANNALY CAPITAL MANAGEMENT INC (NLY) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Annaly Capital Management (NLY) receives a Hold rating, primarily driven by the inherent complexities and risks associated with its business model as a mortgage REIT. While the company exhibits attractive valuation metrics and strong profitability relative to the financial sector, its reliance on leverage and sensitivity to interest rate fluctuations introduce significant uncertainty, warranting a cautious stance. The key takeaway is that NLY's performance is inextricably linked to macroeconomic conditions and the effectiveness of its risk management strategies, making it a suitable investment only for those with a high-risk tolerance and a deep understanding of the mortgage-backed securities market.
Despite Annaly's impressive revenue growth and high operating and net margins compared to the sector, the volatile nature of its earnings, as evidenced by historical losses, tempers enthusiasm. The company's high debt-to-equity ratio further amplifies the risks associated with its operations. Therefore, while NLY may offer attractive dividend yields, potential investors should carefully weigh the potential rewards against the substantial risks before committing capital.
Business Strategy & Overview
Annaly Capital Management operates as a diversified capital manager, primarily focused on mortgage finance and corporate middle market lending. Its core strategy revolves around investing in a portfolio of mortgage-backed securities (MBS), with a significant emphasis on agency MBS, which are guaranteed by government-sponsored enterprises like Fannie Mae and Freddie Mac. This focus on agency MBS provides a degree of safety due to the implicit government backing, but it also exposes the company to interest rate risk and prepayment risk.
In addition to agency MBS, Annaly also invests in other mortgage-related assets, including mortgage servicing rights (MSRs), non-agency residential mortgage assets, residential mortgage loans, and credit risk transfer securities. These investments offer the potential for higher returns but also carry greater credit risk. The company's diversification into corporate middle market lending further expands its investment universe and provides an alternative source of income.
Annaly's business model is predicated on leveraging its capital base to acquire these assets and generate income from the spread between the interest earned on its investments and the cost of its funding. This leverage amplifies both the potential returns and the potential losses. Effective risk management, particularly in managing interest rate risk and prepayment risk, is crucial to the company's success.
As a real estate investment trust (REIT), Annaly is required to distribute a significant portion of its taxable income to shareholders in the form of dividends. This requirement makes the company an attractive investment for income-seeking investors, but it also limits its ability to retain earnings for reinvestment and growth. The company's strategic positioning within the mortgage finance industry is heavily influenced by macroeconomic factors, such as interest rates, inflation, and housing market conditions. Its ability to adapt to changing market dynamics is essential for maintaining its profitability and shareholder value.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
414.9%
Sector: 9.4%
+4323% VS SCTR
Economic Moat Analysis
Annaly Capital Management's economic moat is best characterized as None. The mortgage REIT industry is highly competitive, with numerous players vying for similar investment opportunities. Annaly's primary assets, mortgage-backed securities, are largely commoditized, meaning there is little differentiation between the products offered by different issuers. This lack of differentiation limits Annaly's ability to command premium pricing or generate sustainable excess returns.
While Annaly has scale, with a substantial market capitalization, this scale does not translate into a significant cost advantage. The company's operating expenses, relative to its assets, are comparable to those of its peers. Furthermore, the company's reliance on leverage exposes it to significant financial risk, which can erode any potential cost advantages.
Annaly does not possess any significant intangible assets that would provide a competitive edge. Its brand recognition is limited, and its investment strategies are not proprietary or difficult to replicate. The company's success depends largely on its ability to accurately assess and manage risk, which is a skill that is widely available in the financial industry.
There are no network effects associated with Annaly's business model. The value of its services does not increase as more customers use them. Similarly, there are no significant switching costs for investors. Investors can easily move their capital to other mortgage REITs or alternative investments if they are dissatisfied with Annaly's performance.
Efficient scale is not a relevant factor in Annaly's industry. The market for mortgage-backed securities is vast and liquid, and there are no significant barriers to entry or economies of scale that would prevent new competitors from emerging. Therefore, Annaly's lack of a durable competitive advantage makes it vulnerable to competition and macroeconomic shocks.
Financial Health & Profitability
Annaly Capital Management's financial health presents a mixed picture. The company's revenue has exhibited significant volatility, with a substantial increase in the most recent fiscal year (FY2025) driven by favorable market conditions. The reported revenue of $1.14B for FY2025 represents a dramatic turnaround from the negative revenue of $-111.38M in FY2023. This volatility underscores the sensitivity of Annaly's earnings to changes in interest rates and other macroeconomic factors.
Despite the revenue volatility, Annaly's profitability metrics are strong relative to the financial sector. The company's operating margin of 239.2% and net margin of 250.4% significantly exceed the sector averages of 22.0% and 17.8%, respectively. This high profitability is driven by the company's ability to generate substantial gains from its investment portfolio. However, these gains are often non-cash and can be highly variable.
Annaly's balance sheet is characterized by a high degree of leverage. The company's total debt of $29.66B significantly exceeds its total cash of $2.10B, resulting in a high debt-to-equity ratio of 739.00, far above the sector average of 115.00. This high leverage amplifies the company's exposure to interest rate risk and increases the risk of financial distress in adverse market conditions. The current ratio of 1.14 indicates adequate short-term liquidity.
The company's return on equity (ROE) of 6.9% is slightly below the sector average of 8.5%, suggesting that Annaly is not generating as much profit from its equity as its peers. The negative free cash flow of $-11.88B raises concerns about the company's ability to generate cash from its operations. This negative free cash flow is likely due to the company's investment activities and its reliance on debt financing.
The quarterly financial history reveals a pattern of volatile earnings. While recent quarters have shown strong profitability, previous quarters have experienced significant losses. This volatility makes it difficult to predict Annaly's future financial performance and increases the risk for investors. The company's financial health is heavily dependent on its ability to effectively manage its leverage and navigate the complexities of the mortgage-backed securities market.
Valuation Assessment
Annaly Capital Management's valuation metrics suggest that the stock is relatively inexpensive compared to the broader financial sector. The company's price-to-earnings (P/E) ratio of 7.1x is significantly lower than the sector average of 15.5x, indicating that investors are paying less for each dollar of Annaly's earnings. Similarly, the company's enterprise value-to-EBITDA (EV/EBITDA) ratio of 1.8x is substantially lower than the sector average of 3.5x, suggesting that the company is undervalued relative to its earnings before interest, taxes, depreciation, and amortization.
However, it is important to note that these valuation metrics may be distorted by the company's volatile earnings and high leverage. The P/E ratio, in particular, can be misleading when a company's earnings are highly variable. Furthermore, the EV/EBITDA ratio does not fully capture the risks associated with Annaly's high debt levels.
The negative free cash flow further complicates the valuation assessment. A traditional discounted cash flow (DCF) analysis is difficult to apply in this situation, as the company is not generating positive cash flow from its operations. Alternative valuation methods, such as relative valuation or asset-based valuation, may be more appropriate.
Given the company's high dividend yield, some investors may view Annaly as an attractive income investment. However, it is important to remember that dividend yields can be unsustainable if a company's earnings decline. Furthermore, dividend payments are not guaranteed and can be reduced or suspended at any time.
Overall, Annaly's valuation appears to be cheap relative to the financial sector. However, this cheapness reflects the company's high risk profile and volatile earnings. Investors should carefully consider these risks before investing in Annaly, even at its current valuation.
Risk & Uncertainty
Annaly Capital Management faces several significant risks that could negatively impact its financial performance and stock price. The most prominent risk is interest rate risk. As a mortgage REIT, Annaly's profitability is highly sensitive to changes in interest rates. Rising interest rates can reduce the value of its mortgage-backed securities portfolio and increase its borrowing costs, leading to lower earnings and book value. Conversely, falling interest rates can lead to increased prepayment risk, as homeowners refinance their mortgages at lower rates, reducing the duration of Annaly's assets and potentially lowering its returns.
Prepayment risk is another significant concern. When homeowners refinance their mortgages, Annaly receives the principal back sooner than expected, which can reduce its future income. This risk is particularly acute in periods of falling interest rates. Annaly attempts to mitigate prepayment risk by investing in a diversified portfolio of mortgage-backed securities with varying maturities and prepayment characteristics, but it cannot eliminate the risk entirely.
Leverage risk is also a major factor. Annaly relies heavily on leverage to amplify its returns. While leverage can increase profits in favorable market conditions, it can also magnify losses in adverse conditions. A sudden decline in the value of its assets could trigger margin calls from its lenders, forcing the company to sell assets at distressed prices and potentially leading to financial distress.
Regulatory risk is an ongoing concern for mortgage REITs. Changes in regulations governing the mortgage market or the REIT industry could negatively impact Annaly's business model and profitability. For example, changes in capital requirements or risk-weighting rules could increase the company's borrowing costs or limit its ability to invest in certain assets.
Finally, credit risk, while mitigated by a focus on agency MBS, still exists within its non-agency portfolio. Economic downturns could lead to increased defaults on residential mortgages, resulting in losses for Annaly. While the company carefully monitors its credit exposure and employs risk management techniques to mitigate this risk, it cannot eliminate the possibility of losses due to credit defaults.
Bulls Say / Bears Say
The Bull Case
BULL VIEWAnnaly's attractive dividend yield provides a compelling income stream for investors in a low-interest-rate environment, making it a valuable addition to income-focused portfolios.
BULL VIEWThe company's experienced management team and sophisticated risk management strategies position it to effectively navigate the complexities of the mortgage-backed securities market and generate consistent returns over the long term.
BULL VIEWAnnaly's low valuation multiples, such as its P/E and EV/EBITDA ratios, suggest that the stock is undervalued and offers significant upside potential as market sentiment improves.
The Bear Case
BEAR VIEWAnnaly's high leverage and sensitivity to interest rate fluctuations make it a risky investment, particularly in a rising-rate environment where its earnings and book value could decline significantly.
BEAR VIEWThe company's reliance on short-term funding exposes it to liquidity risk, which could force it to sell assets at distressed prices if credit markets tighten or its lenders become unwilling to provide financing.
BEAR VIEWAnnaly's volatile earnings history and negative free cash flow raise concerns about its long-term sustainability and ability to maintain its dividend payments, making it an unsuitable investment for risk-averse investors.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score NLY and 4,400+ other equities.
ANNALY CAPITAL MANAGEMENT INC exhibits a 589% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
0.8%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
0.0%
Sector: 0.0%
Operating Margin
Core business profitability
239.2%
Sector: 21.8%
Net Margin
Bottom-line profitability
250.4%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+449%
Income Projection audit
A $10,000 investment would generate approximately $1361 annually in dividends at the current trailing rate.
