Latest news with #AnnalyCapital
Yahoo
3 days ago
- Business
- Yahoo
Prediction: 2 Stocks That Will Be Worth More Than Annaly Capital 5 Years From Now
Key Points Annaly Capital has a huge dividend yield of almost 15%. The mortgage REIT pays out so much in dividends that the value of its portfolio has trended lower over time. Investors looking for dividend stocks with growing businesses should stick with companies like Agree Realty and PepsiCo. 10 stocks we like better than Annaly Capital Management › Annaly Capital (NYSE: NLY) has a huge dividend yield that approaches 15%. And the mortgage real estate investment trust (REIT) just increased its dividend at the start of 2025. But don't get lured in by the yield if you are looking for a reliable dividend stock. You will be better off with lower yields from growing businesses like Agree Realty (NYSE: ADC) and PepsiCo (NASDAQ: PEP). Here's why these two dividend payers are likely to be worth more than Annaly in five years. The big problem with Annaly Capital Annaly Capital actually achieves what it sets out to do, so it isn't a bad mortgage REIT. The problem is the mortgage REIT model, which involves buying mortgages that have been pooled into bond-like securities. The goal is to pay out as high a dividend as possible, but the expectation is that those dividends will get reinvested. The end result is a strong total return. If you don't reinvest those dividends, however, the outcome here will likely be far from desirable -- less capital and less income, which is about as bad as it gets for a dividend investor. Essentially, so much cash is going out the door as dividends that the value of the REIT's portfolio shrinks over time. Yes, you'll get a huge yield in the near term. But investors are basically getting their principal returned to them in that fat dividend. With less money to put to work for investors, Annaly simply can't maintain the huge dividend over the long term. There will be ups and downs based on how mortgage bonds are performing over the short term, but the big-picture trend is the one that long-term investors need to watch. Growing businesses are better options A better bet for most dividend investors will be finding lower-yielding stocks with growing businesses. For example, fellow REIT Agree Realty has a yield of 4.2%. It buys single-tenant net lease retail properties in the U.S., with tenants picking up most property operating costs. Roughly five years ago it owned about 1,200 properties. At the end of the first quarter of 2025 it owned more than 2,400 properties. Effectively, the size of the company's business doubled. While the growth is actually fairly impressive, it isn't really shocking. The entire purpose of the REIT is to increase the size of its portfolio over time by buying additional properties. That allows it to pay an attractive dividend that also grows over time. During the past five years Agree's dividend has risen at about 5% a year, on an annualized basis. As the business and dividend grow over the long term, investors tend to reward companies like Agree with a higher stock price. Another option is to buy a company like PepsiCo, which has seen its stock price tumble roughly 30% from the highs it reached in 2023. That drop has pushed the dividend yield up to a historically high 4.3% or so. Once again, however, the business backing the dividend is focused on growth. For example, despite the relatively weak operating results PepsiCo is putting up today, it recently bought two smaller competitors. Poppi added probiotic beverages to the portfolio and Siete added Mexican American foods; both will help PepsiCo keep up with changing consumer tastes. And they will help the Dividend King continue to extend its impressive streak of annual dividend increases, which now stands at 53 years. The dividend has grown at a roughly 7% annualized pace during the past five years. The problem isn't Annaly As noted, Annaly isn't a bad company. It is just a very unique investment because of the nature of its business. Over time the value of the mortgage portfolio it owns, which is essentially the value of the company, is shrinking. That big yield isn't what it seems and isn't likely to be sustainable, and indeed it has been cut as the stock price declines. At least that's what history suggests here. Most dividend investors will be better off buying lower, though still attractive, yields on offer from growing companies like Agree and PepsiCo. Should you invest $1,000 in Annaly Capital Management right now? Before you buy stock in Annaly Capital Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Annaly Capital Management wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Reuben Gregg Brewer has positions in PepsiCo. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Prediction: 2 Stocks That Will Be Worth More Than Annaly Capital 5 Years From Now was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
12-07-2025
- Business
- Globe and Mail
Is Annaly Capital Stock a Millionaire Maker?
Key Points Annaly Capital increased its dividend at the start of 2025. The mortgage REIT has a huge 14%+ dividend yield. Make sure you understand what you are buying before you chase Annaly's lofty yield. 10 stocks we like better than Annaly Capital Management › Annaly Capital Management (NYSE: NLY) has an enticing 14%+ dividend yield backed by a dividend that was just increased. Some on Wall Street believe that the safest dividends are those that have just been raised. But don't let greed drive your decision-making; there's more to know about Annaly than just the size of its dividend yield if you want to become a millionaire someday. Annaly's business model is risky Annaly Capital is a real estate investment trust (REIT). However, unlike most REITs, it doesn't purchase properties. Traditional REITs essentially do what you would do if you owned a rental property, but they do it on an institutional scale. Annaly buys mortgages that have been pooled into bond-like securities. This is a vastly different business model, one that would be very hard for a small investor to replicate in any way. Essentially, Annaly aims to earn the difference between the interest it earns from the mortgage securities it buys and its costs. Those costs include general operating expenses, as well as the cost of leverage. A significant portion of the leverage Annaly uses amounts to loans backed by the mortgage securities it owns. This is not a low-risk business. Moreover, unlike a physical property, mortgage securities trade all day long, leading to swift changes in the value of the portfolio. Factors such as interest rates, housing market dynamics, and even mortgage repayment rates can impact mortgage security prices. It would be hard for most investors even to track what's going on here. Basically, mortgage REITs (mREITs) like Annaly should probably be owned only by more active and perhaps more aggressive investors -- notice that statement didn't include dividend investors. NLY data by YCharts. You can't rely on Annaly's dividend If you are trying to build wealth with dividend stocks, Annaly won't be a good fit for your portfolio. The chart above shows you all you need to know. The orange line is the annual dividend, which has been highly volatile. And up until the recent increase, it had been heading lower for years. The purple line is the stock price, which has been just as volatile as the dividend, and it, too, has been trending lower for years. A lofty dividend yield hasn't translated into a reliable and perhaps growing income stream, which is what most long-term dividend investors are really looking for. But there's an important nuance here, as Annaly Capital isn't actually focused on the dividend per se; it's focused on generating total return. That assumes that dividends get reinvested, not spent on daily living expenses. NLY data by YCharts. If you are focused on total return, Annaly has been a win. Notice in the chart above that its total return has kept pace with that of the S&P 500 (SNPINDEX: ^GSPC) over time. But the two don't move in lockstep, which makes Annaly an interesting candidate for adding to an asset allocation model, as it offers attractive diversification potential. While dividend investors may not find Annaly to their liking, asset allocators may like it a great deal. Can Annaly help you build a seven-figure portfolio? Annaly Capital's ability to help you reach millionaire status depends greatly on what you are trying to achieve when you buy a stock. If the goal is to generate a reliable and growing income stream, even if you aren't yet using that income, history suggests that Annaly will likely be a big letdown. It just isn't focused on that goal. However, if you are laser-focused on total return and like to have a portfolio diversified across different asset classes, this mREIT could be right up your alley. Just go in knowing that dividend reinvestment is what lets Annaly meet its total return goal. Should you invest $1,000 in Annaly Capital Management right now? Before you buy stock in Annaly Capital Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Annaly Capital Management wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor 's total average return is1,047% — a market-crushing outperformance compared to180%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 7, 2025
Yahoo
12-07-2025
- Business
- Yahoo
Is Annaly Capital Stock a Millionaire Maker?
Annaly Capital increased its dividend at the start of 2025. The mortgage REIT has a huge 14%+ dividend yield. Make sure you understand what you are buying before you chase Annaly's lofty yield. 10 stocks we like better than Annaly Capital Management › Annaly Capital Management (NYSE: NLY) has an enticing 14%+ dividend yield backed by a dividend that was just increased. Some on Wall Street believe that the safest dividends are those that have just been raised. But don't let greed drive your decision-making; there's more to know about Annaly than just the size of its dividend yield if you want to become a millionaire someday. Annaly Capital is a real estate investment trust (REIT). However, unlike most REITs, it doesn't purchase properties. Traditional REITs essentially do what you would do if you owned a rental property, but they do it on an institutional scale. Annaly buys mortgages that have been pooled into bond-like securities. This is a vastly different business model, one that would be very hard for a small investor to replicate in any way. Essentially, Annaly aims to earn the difference between the interest it earns from the mortgage securities it buys and its costs. Those costs include general operating expenses, as well as the cost of leverage. A significant portion of the leverage Annaly uses amounts to loans backed by the mortgage securities it owns. This is not a low-risk business. Moreover, unlike a physical property, mortgage securities trade all day long, leading to swift changes in the value of the portfolio. Factors such as interest rates, housing market dynamics, and even mortgage repayment rates can impact mortgage security prices. It would be hard for most investors even to track what's going on here. Basically, mortgage REITs (mREITs) like Annaly should probably be owned only by more active and perhaps more aggressive investors -- notice that statement didn't include dividend investors. If you are trying to build wealth with dividend stocks, Annaly won't be a good fit for your portfolio. The chart above shows you all you need to know. The orange line is the annual dividend, which has been highly volatile. And up until the recent increase, it had been heading lower for years. The purple line is the stock price, which has been just as volatile as the dividend, and it, too, has been trending lower for years. A lofty dividend yield hasn't translated into a reliable and perhaps growing income stream, which is what most long-term dividend investors are really looking for. But there's an important nuance here, as Annaly Capital isn't actually focused on the dividend per se; it's focused on generating total return. That assumes that dividends get reinvested, not spent on daily living expenses. If you are focused on total return, Annaly has been a win. Notice in the chart above that its total return has kept pace with that of the S&P 500 (SNPINDEX: ^GSPC) over time. But the two don't move in lockstep, which makes Annaly an interesting candidate for adding to an asset allocation model, as it offers attractive diversification potential. While dividend investors may not find Annaly to their liking, asset allocators may like it a great deal. Annaly Capital's ability to help you reach millionaire status depends greatly on what you are trying to achieve when you buy a stock. If the goal is to generate a reliable and growing income stream, even if you aren't yet using that income, history suggests that Annaly will likely be a big letdown. It just isn't focused on that goal. However, if you are laser-focused on total return and like to have a portfolio diversified across different asset classes, this mREIT could be right up your alley. Just go in knowing that dividend reinvestment is what lets Annaly meet its total return goal. Before you buy stock in Annaly Capital Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Annaly Capital Management wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,010,880!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of July 7, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is Annaly Capital Stock a Millionaire Maker? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
12-07-2025
- Business
- Business Insider
Annaly Capital (NLY) Receives a Rating Update from a Top Analyst
In a report released on July 9, Bose George from KBW maintained a Buy rating on Annaly Capital. The company's shares closed yesterday at $19.72. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. George covers the Financial sector, focusing on stocks such as First American Financial, PennyMac Financial, and UWM Holding. According to TipRanks, George has an average return of 14.3% and a 76.26% success rate on recommended stocks. In addition to KBW, Annaly Capital also received a Buy from Piper Sandler's Crispin Love in a report issued on July 1. However, on July 10, UBS maintained a Hold rating on Annaly Capital (NYSE: NLY). NLY market cap is currently $11.99B and has a P/E ratio of 22.52.
Yahoo
11-07-2025
- Business
- Yahoo
Orchid Projects Loss for Q2: Is RMBS Strategy Backfiring?
Orchid Island Capital, Inc. ORC has released its estimated results for the second quarter of 2025. The company estimates a net loss of 29 cents per share for the quarter ending June 30, 2025. This includes an estimated 45 cents per share of net realized and unrealized losses on residential mortgage-backed securities (RMBS) and derivative instruments. As of June 30, 2025, Orchid's estimated book value per share stood at $7.21, suggesting a 15.9% decline on a year-over-year basis. It disclosed an estimated negative total return on equity of 4.7% as of the same date. Orchid's RMBS portfolio remains its strength, but its structure amplifies exposure to interest rate risk. While the company's focus on Agency-backed securities reduces credit risk, it makes the portfolio vulnerable to prepayment risk and interest rate fluctuations. Orchid book value and total return are likely to decline in the second quarter due to net realized and unrealized losses on its RMBS and derivative instruments. As of June 30, 2025, Orchid reported an estimated RMBS portfolio value of $6.9 million. AGNC Investment AGNC and Annaly Capital Management, Inc. NLY are among the most closely tracked names in the mREIT industry. AGNC Investment primarily focuses on leveraged investments in Agency RMBS, including residential mortgage pass-through securities and collateralized mortgage obligations. As of March 31, 2025, the company had $70.5 billion RMBS portfolio value. In the first quarter of 2025, AGNC Investment reported a tangible net book value of $8.25 per share, down 1.9% sequentially. The company recorded a positive economic return on equity of 2.4%. Annaly Capital primarily focuses on Agency mortgage-backed securities (MBS), Residential Credit, and Mortgage Servicing Rights. As of March 31, 2025, the company held $75 billion of Agency MBS. It reported a book value per common share of $19.02 for the first quarter of 2025. Annaly Capital recorded an economic return of 3% for the same period. Over the past three months, ORC shares have gained 18.6% compared with the industry's growth of 14%. Price Performance Image Source: Zacks Investment Research From a valuation standpoint, Orchid trades at a forward price-to-tangible (P/TB) ratio of 1.03X, above the industry's average of 1X. Price-to-Tangible Book TTM Image Source: Zacks Investment Research The Zacks Consensus Estimate for ORC's 2025 and 2026 earnings implies a year-over-year rise of 394.4% and 24.5%, respectively. Estimates for 2025 and 2026 have been unchanged over the past 30 days. Earnings Estimates Image Source: Zacks Investment Research Orchid currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AGNC Investment Corp. (AGNC) : Free Stock Analysis Report Annaly Capital Management Inc (NLY) : Free Stock Analysis Report Orchid Island Capital, Inc. (ORC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
