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Is Annaly Capital Management (NLY) Stock Undervalued Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Annaly Capital Management (NLY - Free Report) is a stock many investors are watching right now. NLY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 8.90, while its industry has an average P/E of 9.33. Over the past 52 weeks, NLY's Forward P/E has been as high as 10.33 and as low as 8.12, with a median of 9.10.

Investors should also recognize that NLY has a P/B ratio of 1.01. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. NLY's current P/B looks attractive when compared to its industry's average P/B of 1.21. Within the past 52 weeks, NLY's P/B has been as high as 1.19 and as low as 0.88, with a median of 1.01.

Finally, investors should note that NLY has a P/CF ratio of 3.24. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. NLY's P/CF compares to its industry's average P/CF of 5.20. Over the past year, NLY's P/CF has been as high as 5.56 and as low as 3.20, with a median of 3.70.

Value investors will likely look at more than just these metrics, but the above data helps show that Annaly Capital Management is likely undervalued currently. And when considering the strength of its earnings outlook, NLY sticks out at as one of the market's strongest value stocks.


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