NLY - Annaly Capital: Solid Dividend Yield Which Trumps Valuation Concerns
2024-07-20 05:27:33 ET
Summary
- Annaly Capital Management, Inc. is a real estate investment trust that invests in mortgage-backed securities through agency, non-agency, and mortgage servicing rights.
- Despite concerns about lower mortgage rates, I'm optimistic about Annaly's prospects.
- A bullish steepening of the yield curve might reduce Annaly's funding costs and raise its collateral value. Moreover, the steeper curve might benefit long-end investment opportunities.
- A softer economy could keep credit spreads high and prepayment risk low.
- Although I think the mREIT is fairly valued, I believe its total return has runway via sustainable dividends.
I took some time to assess the mortgage real estate investment trust (mREIT) subsector. While embarking on my journey, I analyzed Annaly Capital Management, Inc. ( NLY ) , as I believe its makeup is well suited for discussion, given the current interest rate environment....
Annaly Capital: Solid Dividend Yield Which Trumps Valuation Concerns