NYSE:NLY

Stock Analysis Report

Executive Summary

Annaly Capital Management, Inc., a diversified capital manager, invests in and finances residential and commercial assets.

Rewards

Trading at 52% below its fair value

Earnings are forecast to grow 106.29% per year

Risk Analysis

Dividend of 9.6% is not well covered by earnings or forecast to be in the next 3 years

Makes less than USD$1m in revenue ($-453M)

Shareholders have been diluted in the past year



Snowflake Analysis

High growth potential and slightly overvalued.


Similar Companies

Colony Credit Real Estate

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Share Price & News

How has Annaly Capital Management's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NLY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.5%

NLY

2.0%

US Mortgage REITs

0.9%

US Market


1 Year Return

2.3%

NLY

7.1%

US Mortgage REITs

20.0%

US Market

Return vs Industry: NLY underperformed the US Mortgage REITs industry which returned 7.2% over the past year.

Return vs Market: NLY underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

NLYIndustryMarket
7 Day4.5%2.0%0.9%
30 Day7.4%4.0%1.4%
90 Day13.5%9.2%8.8%
1 Year14.3%2.3%18.8%7.1%22.5%20.0%
3 Year33.7%-3.7%45.4%5.1%49.9%40.3%
5 Year70.7%-2.8%73.9%-0.1%73.2%54.1%

Price Volatility Vs. Market

How volatile is Annaly Capital Management's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Annaly Capital Management undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NLY ($10.42) is trading below our estimate of fair value ($21.73)

Significantly Below Fair Value: NLY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NLY is unprofitable, so we can't compare its PE Ratio to the Mortgage REITs industry average.

PE vs Market: NLY is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NLY's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NLY is overvalued based on its PB Ratio (1.1x) compared to the US Mortgage REITs industry average (1x).


Next Steps

Future Growth

How is Annaly Capital Management forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

106.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NLY is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: NLY is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: NLY's is expected to become profitable in the next 3 years.

Revenue vs Market: NLY's revenue (77.9% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: NLY's revenue (77.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NLY's Return on Equity is forecast to be low in 3 years time (11.8%).


Next Steps

Past Performance

How has Annaly Capital Management performed over the past 5 years?

-18.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NLY is currently unprofitable.

Growing Profit Margin: NLY is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NLY is unprofitable, and losses have increased over the past 5 years at a rate of -18.7% per year.

Accelerating Growth: Unable to compare NLY's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NLY is unprofitable, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (7.3%).


Return on Equity

High ROE: NLY has a negative Return on Equity (-13.69%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Annaly Capital Management's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: NLY has a low level of unsold assets or inventory.

Debt Coverage by Assets: NLY's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NLY has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: NLY has been profitable on average in the past, therefore cash runway is not a concern.


Financial Institutions Analysis

Asset Level: NLY's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if NLY has a sufficient allowance for bad loans.

Low Risk Liabilities: NLY reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if NLY has an acceptable proportion of non-loan assets held.

Low Risk Deposits: NLY has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if NLY has an appropriate level of bad loans.


Next Steps

Dividend

What is Annaly Capital Management's current dividend yield, its reliability and sustainability?

9.60%

Current Dividend Yield


Dividend Yield vs Market

company9.6%marketbottom25%1.4%markettop25%3.7%industryaverage9.3%forecastin3Years9.7%

Current dividend yield vs market & industry

Notable Dividend: NLY's dividend (9.6%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: NLY's dividend (9.6%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

Stable Dividend: NLY's dividend payments have been volatile in the past 10 years.

Growing Dividend: NLY's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: NLY is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: NLY's dividends in 3 years are not forecast to be well covered by earnings (91.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.0yrs

Average management tenure


CEO

Glenn Votek (61yo)

0.3yrs

Tenure

0

Mr. Glenn A. Votek serves as Interim Chief Executive Officer, Interim President and Director at Annaly Capital Management, Inc. since November 21, 2019. Mr. Votek was Chief Financial Officer of Annaly Capi ...


CEO Compensation Analysis

Compensation vs Market: Glenn's total compensation ($USD0.00) is below average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Insufficient data to compare Glenn's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Wellington Denahan-Norris
Co-Founder & Vice Chair of the Board0.3yrsUS$251.00k0.13% $18.9m
Glenn Votek
Interim CEO0.3yrsno data0.015% $2.3m
Serena Wolfe
Chief Financial Officer0.2yrsno datano data
Steve Campbell
Head of Business Operations0.4yrsno datano data
David Finkelstein
Chief Investment Officer3.3yrsno data0.028% $4.2m
Helen Crossen
Chief Administrative Officer4.1yrsno datano data
Purvi Kamdar
Head of Investor Relations0yrsno datano data
Anthony Green
Chief Corporate Officer2.9yrsno data0.011% $1.6m
Miki Kamijyo
Chief Compliance Officer1yrsno datano data
Jillian Detmer
Head of Marketing - Business Development0yrsno datano data

2.0yrs

Average Tenure

46yo

Average Age

Experienced Management: NLY's management team is not considered experienced ( 2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Wellington Denahan-Norris
Co-Founder & Vice Chair of the Board0.3yrsUS$251.00k0.13% $18.9m
Glenn Votek
Interim CEO0.3yrsno data0.015% $2.3m
Michael Haylon
Independent Director11.7yrsUS$259.00kno data
John Schaefer
Independent Director6.8yrsUS$269.00k0.0061% $912.1k
Donnell Segalas
Independent Director23.1yrsUS$277.00k0.0076% $1.1m
Jonathan Green
Independent Vice Chair of the Board0.3yrsUS$317.00k0.0032% $476.9k
Francine Bovich
Independent Director5.8yrsUS$261.00k0.00094% $140.1k
Kathy Hannan
Independent Director1yrsno datano data
Thomas Hamilton
Independent Chair of the Board0.3yrsno data0.015% $2.2m
Katherine Fallon
Independent Director2.1yrsUS$251.00k0.0011% $162.5k

1.5yrs

Average Tenure

60.5yo

Average Age

Experienced Board: NLY's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NLY insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18.6%.


Top Shareholders

Company Information

Annaly Capital Management, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Annaly Capital Management, Inc.
  • Ticker: NLY
  • Exchange: NYSE
  • Founded: 1996
  • Industry: Mortgage REITs
  • Sector: Diversified Financials
  • Market Cap: US$14.904b
  • Shares outstanding: 1.43b
  • Website: https://www.annaly.com

Number of Employees


Location

  • Annaly Capital Management, Inc.
  • 1211 Avenue of the Americas
  • New York
  • New York
  • 10036
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NLYNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1997
AAYDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1997
NLY.PRDNYSE (New York Stock Exchange)PFD SER D %USUSDSep 2012
NLY.PRFNYSE (New York Stock Exchange)6.95% PFD SER FUSUSDJul 2017
NLY.PRGNYSE (New York Stock Exchange)PFD SER GUSUSDJan 2018
NLY.PRINYSE (New York Stock Exchange)6.750% CUM PFD IUSUSDJun 2019

Biography

Annaly Capital Management, Inc., a diversified capital manager, invests in and finances residential and commercial assets. The company invests in various types of agency mortgage-backed securities, non-agency residential mortgage assets, and residential mortgage loans; and originates and invests in commercial mortgage loans, securities, and other commercial real estate investments. It also provides financing to private equity-backed middle market businesses; and operates as a broker-dealer. 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. was founded in 1996 and is based in New York, New York. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 23:30
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.