Annaly Capital Management, Inc. (NYSE:NLY)

CAPS Rating: 4 out of 5

The Company owns and manages a portfolio of mortgage backed securities, including mortgage pass-through certificates, collateralized mortgage obligations and other securities representing interests in or obligations backed by pools of mortgage loans.


Player Avatar MatthewCHoffman (< 20) Submitted: 9/23/2011 11:42:47 AM : Outperform Start Price: $16.90 NLY Score: -12.41

Analy has some serious weaknesses, but is earning a very high dividend due to the current spread between interest rates. This highly leveraged REIT takes (relatively) high interest from mortgages while financing its ownership through a revolving credit facility at lower short term rates. I understand that its investment strategy is very conservative so it picks "safe" mortages. These stocks have a lot of long run volatility both in price and in dividends but with Fed policy maintaining low interest rates to 2013 this should be a good shelter with a high ROI for the shareholder during the downturn for at least a year or two. Even with the current "twist" policy announced by the Fed, which will flatten the yield curve somewhat, the effect on mortgage interest rates is not expected to be great.

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