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Can Annaly Sustain Its Impressive 12.2% Dividend Yield?
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Key Takeaways
Annaly raised its dividend 7.7% to 70 cents per share in 2025, bringing the yield to 12.2%.
NLY held a $104.7B portfolio at 2025 end, including $92.9B invested in Agency mortgage-backed securities.
Annaly had $9.4B in financing assets and approved a $1.5B share buyback plan through 2029.
High dividend yields often attract income-focused investors, and Annaly Capital Management (NLY - Free Report) stands out in this regard with its notably high payout.
As a publicly traded mortgage real estate investment trust (mREIT), the company has historically delivered favorable long-term shareholder returns while maintaining a sizable dividend yield that appeals strongly to income-oriented investors. The key question, however, is whether such a generous payout can remain sustainable over the long term.
In 2025, Annaly increased its cash dividend 7.7% to 70 cents per share, reinforcing its commitment to returning capital to shareholders. At present, the company’s dividend yield stands at 12.2%.
Annaly Capital Management Inc Dividend Yield (TTM)
Beyond dividends, Annaly is also focused on enhancing shareholder value through capital management initiatives. On Jan. 31, 2025, the company’s board authorized a share repurchase program that allows the repurchase of up to $1.5 billion in common stock through Dec. 31, 2029.
A central factor supporting NLY’s dividend is its disciplined investment strategy, which emphasizes prudent asset selection and efficient capital allocation to produce stable returns. The company primarily invests in Agency mortgage-backed securities (MBS), which are generally considered safer instruments because their principal and interest payments are guaranteed by government-sponsored enterprises such as Fannie Mae, Freddie Mac and Ginnie Mae. As of Dec. 31, 2025, Annaly’s total investment portfolio was valued at $104.7 billion, with $92.9 billion allocated to highly liquid Agency MBS.
In addition to its portfolio strength, NLY maintains a solid liquidity position that supports its ability to navigate market volatility. At the end of 2025, the company had $9.4 billion in total assets available for financing, including $6.1 billion in cash and unencumbered Agency MBS. This liquidity cushion enhances financial flexibility and positions the company to manage economic stress or shifts in interest-rate conditions while continuing to support its dividend commitments.
In conclusion, Annaly’s large allocation to high-quality Agency MBS, a strong liquidity buffer and disciplined capital management provide a solid foundation for maintaining its generous dividend payments. Nevertheless, investors should remain mindful that mREIT dividends are inherently sensitive to macroeconomic shifts, particularly interest-rate volatility.
How NLY Competes With AGNC & ABR in Terms of Dividends
Annaly’s peers, such as AGNC Investment Corp. (AGNC - Free Report) and Arbor Realty Trust, Inc. (ABR - Free Report) , have also been focusing on maintaining shareholder returns through consistent dividend payouts.
AGNC Investment offers a 13.2% dividend yield. As of Dec. 31, 2025, AGNC Investment’s liquidity, including unencumbered cash and Agency MBS, was $7.6 billion, which reinforces the sustainability of its capital distribution strategy.
Conversely, Arbor Realty has a dividend yield of 13.6%. However, its liquidity position remains comparatively weak. As of Dec. 31, 2025, Arbor Realty had cash and cash equivalents of $482.9 million against long-term debt of $5.5 billion. Such a narrow liquidity cushion raises concerns about the sustainability of its capital distribution in the long term.
Annaly’s Price Performance & Zacks Rank
Over the past six months, NLY shares have gained 3.7% against the industry’s decline of 1.9%.
View the Zacks #1 Rank List
Image: Bigstock
Can Annaly Sustain Its Impressive 12.2% Dividend Yield?
Key Takeaways
High dividend yields often attract income-focused investors, and Annaly Capital Management (NLY - Free Report) stands out in this regard with its notably high payout.
As a publicly traded mortgage real estate investment trust (mREIT), the company has historically delivered favorable long-term shareholder returns while maintaining a sizable dividend yield that appeals strongly to income-oriented investors. The key question, however, is whether such a generous payout can remain sustainable over the long term.
In 2025, Annaly increased its cash dividend 7.7% to 70 cents per share, reinforcing its commitment to returning capital to shareholders. At present, the company’s dividend yield stands at 12.2%.
Annaly Capital Management Inc Dividend Yield (TTM)
Annaly Capital Management Inc dividend-yield-ttm | Annaly Capital Management Inc Quote
Beyond dividends, Annaly is also focused on enhancing shareholder value through capital management initiatives. On Jan. 31, 2025, the company’s board authorized a share repurchase program that allows the repurchase of up to $1.5 billion in common stock through Dec. 31, 2029.
A central factor supporting NLY’s dividend is its disciplined investment strategy, which emphasizes prudent asset selection and efficient capital allocation to produce stable returns. The company primarily invests in Agency mortgage-backed securities (MBS), which are generally considered safer instruments because their principal and interest payments are guaranteed by government-sponsored enterprises such as Fannie Mae, Freddie Mac and Ginnie Mae. As of Dec. 31, 2025, Annaly’s total investment portfolio was valued at $104.7 billion, with $92.9 billion allocated to highly liquid Agency MBS.
In addition to its portfolio strength, NLY maintains a solid liquidity position that supports its ability to navigate market volatility. At the end of 2025, the company had $9.4 billion in total assets available for financing, including $6.1 billion in cash and unencumbered Agency MBS. This liquidity cushion enhances financial flexibility and positions the company to manage economic stress or shifts in interest-rate conditions while continuing to support its dividend commitments.
In conclusion, Annaly’s large allocation to high-quality Agency MBS, a strong liquidity buffer and disciplined capital management provide a solid foundation for maintaining its generous dividend payments. Nevertheless, investors should remain mindful that mREIT dividends are inherently sensitive to macroeconomic shifts, particularly interest-rate volatility.
How NLY Competes With AGNC & ABR in Terms of Dividends
Annaly’s peers, such as AGNC Investment Corp. (AGNC - Free Report) and Arbor Realty Trust, Inc. (ABR - Free Report) , have also been focusing on maintaining shareholder returns through consistent dividend payouts.
AGNC Investment offers a 13.2% dividend yield. As of Dec. 31, 2025, AGNC Investment’s liquidity, including unencumbered cash and Agency MBS, was $7.6 billion, which reinforces the sustainability of its capital distribution strategy.
Conversely, Arbor Realty has a dividend yield of 13.6%. However, its liquidity position remains comparatively weak. As of Dec. 31, 2025, Arbor Realty had cash and cash equivalents of $482.9 million against long-term debt of $5.5 billion. Such a narrow liquidity cushion raises concerns about the sustainability of its capital distribution in the long term.
Annaly’s Price Performance & Zacks Rank
Over the past six months, NLY shares have gained 3.7% against the industry’s decline of 1.9%.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.