Annaly Capital Management

-14.12%

Annaly Capital Management has suddenly become a much more intriguing value story. After trading above $20, NLY is now around $18.52, creating a sharp valuation reset. The recent decline was largely driven by the September 30 ex-dividend date, when the stock adjusted for its $0.75 quarterly dividend, while higher interest rates and mortgage spread volatility added pressure. The latest fundamentals, however, remain surprisingly solid. Second-quarter earnings available for distribution reached $0.79 per share, exceeding the $0.75 dividend for the ninth consecutive quarter. Book value stood at $20.15, while net interest margin improved to 1.47% and net interest spread increased to 1.16%. Dividend growth is also notable: the quarterly payout rose from $0.65 in late 2024 to $0.70 throughout 2025 and early 2026, before increasing to $0.75 in the second quarter. The opportunity is clear: NLY trades below its latest book value while offering a very high yield. The risks are equally clear: leverage, interest rates, funding costs, and potential book value declines. Third-quarter results are scheduled for October 20, making them an important test for a possible recovery. This review is for informational and educational purposes only, not financial advice.