Company Overview

Annaly Capital Management, Inc. is a leading diversified capital manager that invests in and finances residential and commercial assets. Incorporated in 1996 and based in New York, New York, the company 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. Annaly Capital Management, Inc. is one of the largest mortgage real estate investment trusts, organized in Maryland with its principal office in New York City. The company is ranked 857th on the Fortune 1000.

Business Model and Investment Strategy

Annaly Capital Management, Inc. engages in the mortgage finance business, operating through three primary investment strategies:

Agency Portfolio

The company invests in agency mortgage-backed securities collateralized by residential mortgages; non-agency residential whole loans and securitized products within the residential and commercial markets; mortgage servicing rights (MSRs); agency commercial mortgage-backed securities; to-be-announced forward contracts; residential mortgage loans; and agency or private label credit risk transfer securities. As of December 31, 2023, 88% of the company's assets were mortgage-backed securities issued by either Fannie Mae or Freddie Mac.

Revenue Generation

Annaly generates profits by borrowing money, primarily via short-term repurchase agreements, and reinvesting the proceeds in asset-backed securities. The company profits from the net interest spread between the interest earned from its assets and its borrowing costs, which is amplified by the use of leverage.

Recent Financial Performance

Q1 2025 Results

In its first quarter of 2025, Annaly Capital Management reported a GAAP net income of $0.15 per share and earnings available for distribution (EAD) of $0.72 per share. The company achieved an economic return of 3.0% and increased its common stock dividend to $0.70 per share, reflecting strong performance in a volatile market environment. Key financial highlights include a total portfolio of $84.9 billion, with a significant portion in highly liquid Agency portfolios.

Q3 2024 Performance

Annaly Capital Management (NLY) reported quarterly earnings of $0.66 per share, missing the Zacks Consensus Estimate of $0.67 per share. This compares to earnings of $0.66 per share in the same period a year ago. The company posted revenues of $13.4 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 93.68%. This compares to year-ago revenues of $-45.33 million.

Revenue Growth

Annaly Capital Management Inc. reported revenue of $1.257 billion for the quarter ending June 30, 2025, a 7.23% increase year-over-year. For the twelve months ending June 30, 2025, Annaly Capital Management Inc. revenue was $5.555 billion, a 38.93% increase year-over-year.

Key Portfolio Highlights

2024 Performance

Annaly generated an economic return of 11.9% in 2024, supported by strong performance from each of its three investment strategies. The Agency portfolio increased by nearly $5 billion throughout 2024, with the weighted average coupon rising from 4.57% to 5.00% by opportunistically adding specified pools with material call protection in 5.5% and higher coupons. Annaly's Residential Credit portfolio increased 17% year-over-year, driven by record production from the whole loan correspondent channel, including $17.6 billion in lock volume and $11.7 billion in correspondent fundings. As the third-largest purchaser of MSR in 2024, Annaly's MSR portfolio grew by 24% year-over-year, featuring a differentiated portfolio with the lowest note rate among the top 20 servicers, bolstered by recently expanded recapture and subservicing relationships.

Capital Management

Annaly conservatively managed its leverage and liquidity profile throughout the year amid volatility. Economic leverage decreased from 5.7x to 5.5x year-over-year, and total assets available for financing increased by $0.7 billion to $6.9 billion. Since the beginning of 2024, Annaly's Residential Credit and MSR businesses increased financing capacity by $1.3 billion and $550 million, respectively, through new and expanded credit facilities, bringing total warehouse capacity across both businesses to $5.4 billion, including $2.2 billion of committed capacity. The company raised $1.6 billion of accretive common equity through its at-the-market sales program.

Market Position and Financial Metrics

The market capitalization of Annaly Capital Management is $11.49 billion. Annaly Capital Management has a price-to-earnings (PE) ratio of 13.60. As of August 18, 2025, there were 2,335,501,281 shares outstanding of the registrant's common stock. As of August 18, 2024, there were 2,252,573,721 shares outstanding of the registrant's common stock.

Dividend History

The Board of Directors of Annaly Capital Management, Inc. (NYSE: NLY) declared the third quarter 2025 common stock cash dividend of $0.70 per common share. This dividend is payable October 31, 2025, to common shareholders of record on September 30, 2025. A quarterly common stock cash dividend of $0.65 per share was announced for Q4 2024.

Performance Comparison

Return vs Industry: NLY exceeded the US Mortgage REITs industry, which returned -8.4% over the past year.

Return vs Market: NLY underperformed the US Market, which returned 18.5% over the past year.

Annaly has a demonstrated track record of outperformance, beating the S&P 500 in terms of total return by over 1.3x since the firm's initial public offering in 1997.

Strategic Focus

Annaly's strategic focus on diversified housing finance and active portfolio management positions it well to navigate market volatility. The company remains optimistic about delivering superior risk-adjusted returns over the long term, supported by a strong balance sheet and liquidity. Annaly Capital Management, Inc. is covered by 33 analysts, with 8 of them submitting estimates used in reports. Annaly continues to maintain its position as a leading mortgage REIT with a diversified investment approach across agency MBS, residential credit, and mortgage servicing rights, providing consistent dividend income to shareholders while adapting to changing market conditions.