Financial Analysis: Annaly Capital Management (NLY) & The Competition

Annaly Capital Management (NYSE:NLY) is one of 52 publicly-traded companies in the “Mortgage Real Estate Investment Trusts (REITs)” industry, but how does it contrast to its competitors? We will compare Annaly Capital Management to related businesses based on the strength of its institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Insider & Institutional Ownership

51.6% of Annaly Capital Management shares are owned by institutional investors. Comparatively, 52.3% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are owned by institutional investors. 0.2% of Annaly Capital Management shares are owned by company insiders. Comparatively, 4.8% of shares of all “Mortgage Real Estate Investment Trusts (REITs)” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Annaly Capital Management and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Annaly Capital Management	15.52%	16.65%	1.72%
Annaly Capital Management Competitors	-13.10%	7.62%	1.04%

Analyst Recommendations

This is a breakdown of recent recommendations for Annaly Capital Management and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Annaly Capital Management	0	4	7	1	2.75
Annaly Capital Management Competitors	690	1987	2136	136	2.35

Annaly Capital Management currently has a consensus target price of $21.67, indicating a potential upside of 15.85%. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies have a potential upside of 50.00%. Given Annaly Capital Management’s competitors higher probable upside, analysts plainly believe Annaly Capital Management has less favorable growth aspects than its competitors.

Volatility & Risk

Annaly Capital Management has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Annaly Capital Management’s competitors have a beta of 1.21, suggesting that their average share price is 21% more volatile than the S&P 500.

Dividends

Annaly Capital Management pays an annual dividend of $3.00 per share and has a dividend yield of 16.0%. Annaly Capital Management pays out 209.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Mortgage Real Estate Investment Trusts (REITs)” companies pay a dividend yield of 16.8% and pay out -102.0% of their earnings in the form of a dividend. Annaly Capital Management has raised its dividend for 2 consecutive years. Annaly Capital Management lags its competitors as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings & Valuation

This table compares Annaly Capital Management and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Annaly Capital Management	$1.36 billion	$2.03 billion	13.08
Annaly Capital Management Competitors	$545.49 million	$157.00 million	19.32

Annaly Capital Management has higher revenue and earnings than its competitors. Annaly Capital Management is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Summary

Annaly Capital Management beats its competitors on 9 of the 15 factors compared.

About Annaly Capital Management

Annaly Capital Management, Inc. is a mortgage real estate investment trust (REIT) that invests in assets tied to the U.S. housing and mortgage markets. Its portfolio includes agency mortgage-backed securities, residential credit investments and mortgage servicing rights. The company’s agency investments include mortgage-backed securities whose principal and interest payments are guaranteed by government-sponsored enterprises or government agencies. Its residential credit activities include investments in mortgage loans and securities that do not carry those guarantees, while its servicing rights relate to the collection and administration of mortgage payments.