Recently, Annaly declared a quarterly dividend that will be paid on October 31. This will be paid to registered shareholders on September 30, 2022. The dividend per share is $0.88. It increased its dividend from $0.22 per share in the previous quarter to $0.88 this quarter. This constitutes an annualized dividend of $3.52 and a yield of 19.00%. Annaly Capital Management’s dividend distribution ratio is currently 34.92%.
This can be seen as one of the main reasons for the increase in the share price today.
Reverse 1 by 4 stock split: Recently, Annaly Capital Management approved a reverse stock split of its common stock at a ratio of 1 by 4. The company was overvalued prior to this, so they expected their common stock to reach in line with similar companies on the market. They expected their common shares to be reduced from about $1.8 billion to about $445 million. They believed this could solve stock price volatility over time. The stock fell about 10% after the stock split.
Annaly joined the S&P midcap 400: in August of this year, Annaly joined the S&P Midcap 400. This helps the company get a short-term demand.
Since Annaly is a mortgage REIT (real estate investment fund) and invests in tangible assets thanks to which the security is sensitive to the variable rates of the market. Annaly is down 61% compared to the last 5 years. The Fed’s rate hike is detrimental to the entire housing market as it reduces purchase demand. Rising mortgage rates and the impending recession are the main obstacles for the company. The spread of various mortgage-backed securities and other problems have led to a decrease in book value. Annaly’s book value has decreased by 26% and 50% over the past 5 years.
NLY Stock Forecast: Price Target
|Overall average||US$ 22.5|
|Credit Suisse Group||$26|
NLY Stock Forecast: Q 2 Results
- NLY released its Quarter 2 (which ended on June 30, 2022) in August 2022.
- Total revenue was reported to be $952.7 million, up 505% year-over-year.
- The net profit margin was 90.9%, down 27.6% year-on-year.
- Total operating expenses were $42 million, down 25.2% year-over-year.
- Total operating income was $910.7 million, up 412.7% year-over-year.
- Net income was reported at $866.7 million, up 396.2% year-over-year.
- Diluted earnings per share (EPS) was $2.20, up 339% year-over-year.
NLY Share Price Forecast: Short-Term Outlook
|1. The wisdom of the market||negative|
|1a. Market data||lower|
|Performance vs NASDAQ (Last 5 days)||lower|
|2. The wisdom of the crowd||positive|
|2a. Google Search||superior|
|2b. Sentiment on social media||superior|
NLY Stock Forecast: Conclusion
NLY shares have fallen 45% over the past 1 year. The current conditions are not favorable to the real estate market. Given the Fed’s high rates, recession and mortgage prices, the company’s dividend could be reduced in the coming year. The company can see profits if the Fed lowers interest rates. So, investors should consider all risks and be aware before investing.