Can Annaly Capital Uphold Its Impressive 13% Dividend Yield?

One of the most closely watched aspects of Annaly Capital Management, Inc.’s NLY financial profile is its dividend policy. This publicly traded mortgage real estate investment trust (mREIT) offers favorable long-term stockholder returns and a gigantic dividend yield that appeals to income-focused investors.

Income-seeking investors have a large appetite for REIT stocks, as U.S. law requires REITs to distribute 90% of their annual taxable income as dividends. In March 2025, the company increased its cash dividend by 7.7% to 70 cents per share. NLY’s dividend yield currently stands at 13.02%, surpassing the industry average of 12.51%. Also, its 97% payout ratio underscores its commitment to maintaining regular distributions.

Dividend Yield

Beyond dividends, Annaly Capital remains focused on enhancing shareholder value through repurchases. On Dec. 31, 2024, the board authorized a new common stock repurchase program of up to $1.5 billion, set to expire on Dec. 31, 2029. However, the company has not repurchased any shares to date under this plan.

The company enjoys a decent liquidity position. As of Sept. 30, 2025, the company held $8.8 billion in total assets available for financing, including $3.9 billion in cash and unencumbered Agency MBS. This strong liquidity cushion positions Annaly Capital well to navigate economic stress and sustain capital distributions.

How NLY Competes With AGNC & ABR in Terms of Dividends

Annaly Capital’s peers, such as AGNC Investment Corp. AGNC and Arbor Realty Trust, Inc. ABR, have also been focusing on maintaining shareholder returns through consistent dividend payouts.

AGNC Investment offers a 14.2% dividend yield and maintains a payout ratio of 94%. As of Sept. 30, 2025, AGNC Investment held $7.2 billion in liquidity, including unencumbered cash and Agency MBS, which reinforces the sustainability of its capital distribution strategy.

On the other hand, Arbor Realty has a dividend yield of 12.6% and a payout ratio of 98%. However, its liquidity position remains comparatively weak. As of Sept. 30, 2025, Arbor Realty had cash and cash equivalents of $423.4 million against long-term debt of $5.9 billion. Such a narrow liquidity cushion raises concerns about the sustainability of its capital distribution in the long term.

Annaly Capital’s Price Performance, Valuations & Estimates

Over the past year, NLY shares have gained 11.6% against the industry’s decline of 2.6%.

Price Performance

From a valuation standpoint, NLY trades at a forward price-to-tangible book (P/TB) ratio of 1.07X, above the industry’s average of 1.04X.

Price-to-Tangible Book TTM

The Zacks Consensus Estimate for NLY’s 2025 and 2026 earnings implies a year-over-year rise of 7.4% and 1.5%, respectively. The estimates for 2025 have been revised upward, while the 2026 estimates have been revised downward over the past 30 days.

Estimates Revision Trend

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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