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

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

One stock to keep an eye on is Annaly Capital Management (NLY - Free Report) . NLY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 8.75, while its industry has an average P/E of 9.20. Over the last 12 months, NLY's Forward P/E has been as high as 10.33 and as low as 8.12, with a median of 9.07.

We should also highlight that NLY has a P/B ratio of 0.99. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.20. Over the past year, 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 will want to recognize that NLY has a P/CF ratio of 3.17. 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 5.09. Over the past 52 weeks, NLY's P/CF has been as high as 5.56 and as low as 3.13, 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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