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Is Annaly (NLY) Signaling a New Capital Playbook with Floating Preferreds and Idle Buybacks?

Simply Wall St·02/19/2026 04:46:35
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  • In recent months, Annaly Capital Management declared first-quarter 2026 cash dividends on its Series F, G, I and J preferred shares, while reporting that no shares were repurchased under the buyback program announced in January 2025.
  • The combination of floating-rate preferred dividends tied to three‑month CME Term SOFR and an unused buyback program highlights how Annaly is prioritizing income distributions within a changing interest rate backdrop and capital allocation framework.
  • We’ll now examine how these floating-rate preferred dividends, alongside unused buyback capacity, may influence Annaly’s broader investment narrative.

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Annaly Capital Management Investment Narrative Recap

To own Annaly Capital Management, you need to be comfortable with a mortgage REIT whose fortunes are closely tied to interest rate spreads, funding costs and housing credit conditions. The latest preferred dividend declarations and the unused buyback program do not materially change the key near term catalyst of earning an attractive net interest margin, or the biggest current risk of earnings pressure if interest rate volatility and hedging costs stay elevated.

The most relevant update here is the Q1 2026 cash dividends on the Series F, G, I and J preferred shares, particularly the floating rate issues that reset off three month CME Term SOFR plus a spread. These payouts sit ahead of the common dividend and interact directly with Annaly’s core catalyst of benefiting from attractive Agency MBS spreads and improved financing costs, since higher preferred funding costs can eat into the net income available to common shareholders.

Yet behind these income headlines, investors should be aware that prolonged interest rate volatility could still...

Read the full narrative on Annaly Capital Management (it's free!)

Annaly Capital Management's narrative projects $3.4 billion revenue and $3.2 billion earnings by 2028. This requires 46.9% yearly revenue growth and about a $2.6 billion earnings increase from $575.1 million today.

Uncover how Annaly Capital Management's forecasts yield a $24.45 fair value, a 6% upside to its current price.

Exploring Other Perspectives

NLY 1-Year Stock Price Chart
NLY 1-Year Stock Price Chart

Nine fair value estimates from the Simply Wall St Community span roughly US$18.84 to US$39.46 per share, showing how far apart individual views can be. Against this wide range, the reliance on attractive Agency MBS spreads and conservative hedging as key earnings drivers underlines why you may want to compare several perspectives before deciding how interest rate swings could shape Annaly’s performance.

Explore 9 other fair value estimates on Annaly Capital Management - why the stock might be worth as much as 72% more than the current price!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.