ANNALY CAPITAL MANAGEMENT IN (NLY) Stock Fundamental Analysis
NYSE:NLY - New York Stock Exchange, Inc. - US0357108390 - REIT - Currency: USD
We assign a fundamental rating of 4 out of 10 to NLY. NLY was compared to 64 industry peers in the Mortgage Real Estate Investment Trusts (REITs)" industry. While NLY is still in line with the averages on profitability rating, there are concerns on its financial health. NLY scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
NLY had positive earnings in the past year.
NLY had a positive operating cash flow in the past year.
In multiple years NLY reported negative net income over the last 5 years.
NLY had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 0.82%, NLY perfoms like the industry average, outperforming 57.81% of the companies in the same industry.
The Return On Equity of NLY (6.72%) is better than 71.88% of its industry peers.
NLY has a Return On Invested Capital (0.79%) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.82% | ||
| ROE | 6.72% | ||
| ROIC | 0.79% |
ROA(3y)0.29%
ROA(5y)0.54%
ROE(3y)1.73%
ROE(5y)3.03%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
NLY has a better Profit Margin (14.51%) than 62.50% of its industry peers.
NLY's Profit Margin has declined in the last couple of years.
NLY has a Operating Margin of 17.59%. This is in the better half of the industry: NLY outperforms 62.50% of its industry peers.
In the last couple of years the Operating Margin of NLY has declined.
Looking at the Gross Margin, with a value of 20.52%, NLY is doing worse than 68.75% of the companies in the same industry.
In the last couple of years the Gross Margin of NLY has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.59% | ||
| PM (TTM) | 14.51% | ||
| GM | 20.52% |
OM growth 3Y-42.02%
OM growth 5YN/A
PM growth 3Y-42.61%
PM growth 5YN/A
GM growth 3Y-39.27%
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NLY is destroying value.
Compared to 1 year ago, NLY has more shares outstanding
The number of shares outstanding for NLY has been increased compared to 5 years ago.
Compared to 1 year ago, NLY has a worse debt to assets ratio.
2.2 Solvency
NLY has an Altman-Z score of -0.75. This is a bad value and indicates that NLY is not financially healthy and even has some risk of bankruptcy.
NLY's Altman-Z score of -0.75 is on the low side compared to the rest of the industry. NLY is outperformed by 75.00% of its industry peers.
The Debt to FCF ratio of NLY is 36.61, which is on the high side as it means it would take NLY, 36.61 years of fcf income to pay off all of its debts.
NLY has a Debt to FCF ratio of 36.61. This is in the better half of the industry: NLY outperforms 68.75% of its industry peers.
A Debt/Equity ratio of 7.11 is on the high side and indicates that NLY has dependencies on debt financing.
The Debt to Equity ratio of NLY (7.11) is worse than 73.44% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.11 | ||
| Debt/FCF | 36.61 | ||
| Altman-Z | -0.75 |
ROIC/WACC0.15
WACC5.17%
2.3 Liquidity
A Current Ratio of 0.07 indicates that NLY may have some problems paying its short term obligations.
With a Current ratio value of 0.07, NLY is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
NLY has a Quick Ratio of 0.07. This is a bad value and indicates that NLY is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.07, NLY is doing worse than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 |
3. Growth
3.1 Past
The earnings per share for NLY have decreased by -5.92% in the last year.
Measured over the past years, NLY shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.74% on average per year.
NLY shows a strong growth in Revenue. In the last year, the Revenue has grown by 141.58%.
The Revenue has been growing by 45.38% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-5.92%
EPS 3Y-16.27%
EPS 5Y-7.74%
EPS Q2Q%5.88%
Revenue 1Y (TTM)141.58%
Revenue growth 3Y25.23%
Revenue growth 5Y45.38%
Sales Q2Q%35.19%
3.2 Future
The Earnings Per Share is expected to grow by 2.04% on average over the next years.
NLY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.41% yearly.
EPS Next Y6.36%
EPS Next 2Y3.21%
EPS Next 3Y2.04%
EPS Next 5YN/A
Revenue Next Year12.29%
Revenue Next 2Y6.41%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
NLY is valuated reasonably with a Price/Earnings ratio of 8.01.
Based on the Price/Earnings ratio, NLY is valued cheaper than 81.25% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.75. NLY is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 7.54, the valuation of NLY can be described as very cheap.
81.25% of the companies in the same industry are more expensive than NLY, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of NLY to the average of the S&P500 Index (22.44), we can say NLY is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.01 | ||
| Fwd PE | 7.54 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NLY is valued cheaper than 92.19% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, NLY is valued cheaper than 85.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.93 | ||
| EV/EBITDA | 30.61 |
4.3 Compensation for Growth
NLY's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.26
PEG (5Y)N/A
EPS Next 2Y3.21%
EPS Next 3Y2.04%
5. Dividend
5.1 Amount
NLY has a Yearly Dividend Yield of 11.97%, which is a nice return.
Compared to an average industry Dividend Yield of 12.95, NLY has a dividend in line with its industry peers.
NLY's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.97% |
5.2 History
The dividend of NLY decreases each year by -10.87%.
NLY has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-10.87%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
NLY pays out 176.28% of its income as dividend. This is not a sustainable payout ratio.
DP176.28%
EPS Next 2Y3.21%
EPS Next 3Y2.04%
21.64
-0.32 (-1.46%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryMortgage Real Estate Investment Trusts (REITs)"
Earnings (Last)
Earnings (Next)
Inst Owners60.28%
Inst Owner Change14.04%
Ins Owners0.13%
Ins Owner Change6.43%
Market Cap12.08B
Analysts77.78
Price Target21.47 (-0.79%)
Short Float %2.61%
Short Ratio1.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 11.97% |
Yearly Dividend2.77
Dividend Growth(5Y)-10.87%
DP176.28%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.27%
Min EPS beat(2)-2.22%
Max EPS beat(2)6.77%
EPS beat(4)2
Avg EPS beat(4)1.61%
Min EPS beat(4)-2.22%
Max EPS beat(4)6.77%
EPS beat(8)4
Avg EPS beat(8)0.77%
EPS beat(12)7
Avg EPS beat(12)4.16%
EPS beat(16)11
Avg EPS beat(16)4.72%
Revenue beat(2)2
Avg Revenue beat(2)5.9%
Min Revenue beat(2)5.18%
Max Revenue beat(2)6.62%
Revenue beat(4)4
Avg Revenue beat(4)6.67%
Min Revenue beat(4)5.18%
Max Revenue beat(4)8.41%
Revenue beat(8)6
Avg Revenue beat(8)3.71%
Revenue beat(12)8
Avg Revenue beat(12)28.25%
Revenue beat(16)11
Avg Revenue beat(16)31.6%
PT rev (1m)-0.47%
PT rev (3m)-2.55%
EPS NQ rev (1m)3.11%
EPS NQ rev (3m)3.96%
EPS NY rev (1m)3.74%
EPS NY rev (3m)3.32%
Revenue NQ rev (1m)2.5%
Revenue NQ rev (3m)2.9%
Revenue NY rev (1m)2.33%
Revenue NY rev (3m)2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.01 | ||
| Fwd PE | 7.54 | ||
| P/S | 2.07 | ||
| P/FCF | 4.93 | ||
| P/OCF | 3.65 | ||
| P/B | 0.96 | ||
| P/tB | 0.96 | ||
| EV/EBITDA | 30.61 |
EPS(TTM)2.7
EY12.48%
EPS(NY)2.87
Fwd EY13.27%
FCF(TTM)4.39
FCFY20.27%
OCF(TTM)5.93
OCFY27.41%
SpS10.47
BVpS22.6
TBVpS22.58
PEG (NY)1.26
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.82% | ||
| ROE | 6.72% | ||
| ROCE | 2.96% | ||
| ROIC | 0.79% | ||
| ROICexc | 0.8% | ||
| ROICexgc | 0.81% | ||
| OM | 17.59% | ||
| PM (TTM) | 14.51% | ||
| GM | 20.52% | ||
| FCFM | 41.91% |
ROA(3y)0.29%
ROA(5y)0.54%
ROE(3y)1.73%
ROE(5y)3.03%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-34.31%
ROICexcg growth 5YN/A
ROICexc growth 3Y-34.32%
ROICexc growth 5YN/A
OM growth 3Y-42.02%
OM growth 5YN/A
PM growth 3Y-42.61%
PM growth 5YN/A
GM growth 3Y-39.27%
GM growth 5YN/A
F-Score6
Asset Turnover0.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.11 | ||
| Debt/FCF | 36.61 | ||
| Debt/EBITDA | 84.74 | ||
| Cap/Depr | 2843.32% | ||
| Cap/Sales | 14.78% | ||
| Interest Coverage | 0.27 | ||
| Cash Conversion | 313.1% | ||
| Profit Quality | 288.85% | ||
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 | ||
| Altman-Z | -0.75 |
F-Score6
WACC5.17%
ROIC/WACC0.15
Cap/Depr(3y)3082.57%
Cap/Depr(5y)2232.96%
Cap/Sales(3y)20.64%
Cap/Sales(5y)15.98%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-5.92%
EPS 3Y-16.27%
EPS 5Y-7.74%
EPS Q2Q%5.88%
EPS Next Y6.36%
EPS Next 2Y3.21%
EPS Next 3Y2.04%
EPS Next 5YN/A
Revenue 1Y (TTM)141.58%
Revenue growth 3Y25.23%
Revenue growth 5Y45.38%
Sales Q2Q%35.19%
Revenue Next Year12.29%
Revenue Next 2Y6.41%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y164.23%
EBIT growth 3Y-27.4%
EBIT growth 5YN/A
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y24.22%
FCF growth 3Y-2.02%
FCF growth 5YN/A
OCF growth 1Y39.86%
OCF growth 3Y2.47%
OCF growth 5YN/A