Published Thu, 04 Jun 2020 16:56:07 -0400 on Seeking Alpha
Part 1 of this article compares NLY’s recent investment composition, leverage, hedging coverage ratio, quarterly BV, economic return, and current valuation to seventeen mREIT peers.
Part 1 also performs a detailed analysis of NLY’s MBS and derivatives portfolios as of 3/31/2020. This includes NLY’s projected performance during the second quarter of 2020 (through 5/29/2020).
Due to what occurred during the first quarter of 2020 (decrease in rates/yields), understanding the composition of NLY’s MBS/investment and derivatives portfolio is crucial in understanding current/future performance.
My buy, sell, or hold recommendation, current BV projection (BV as of 5/29/2020), and updated price target for NLY is in the “Conclusions Drawn” section of the article.
I also provide a list of the mREIT stocks I currently believe are undervalued (a buy recommendation), overvalued (a sell recommendation), or appropriately valued (a hold recommendation).
Focus of Article
The focus of PART 1 of this article is to analyze Annaly Capital Management Inc.'s (NYSE: NLY) recent results and compare several of the company's metrics to seventeen mortgage real estate investment trust (mREIT) peers. This analysis will show past and current data with supporting documentation within three tables. Table 1 will compare NLY's mortgage-backed securities ("MBS")/investment composition, recent leverage, hedging coverage ratio, BV, and economic return (loss) to the seventeen mREIT peers. Table 1 will also provide a premium (discount) to estimated CURRENT BV analysis using stock prices as of 5/29/2020. Table 2 will show a quarterly compositional analysis of NLY's agency MBS portfolio while Table 3 will show the company's recent hedging coverage ratio over the past two quarters (only contributor/team to provide hedging metrics).
I am writing this two-part article due to the continued requests that such an analysis be specifically performed on NLY versus its mREIT peers at periodic... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ORCHID ISLAND CAPITAL||5.58||0.0||-0.29||0.96||17.75|
|ARLINGTON ASSET INVESTMENT||5.55||0.0||-1.21||0.90||16.58|
|CHERRY HILL MORTGAGE INVESTMENT||13.52||0.0||-3.91||1.60||14.40|
|NEW RESIDENTIAL INVESTMENT||14.98||18.0||0.83||2.00||13.28|
|ANWORTH MORTGAGE ASSET||3.39||0.0||-0.98||0.44||13.17|
|NEW YORK MORTGAGE TRUST||6.14||12.0||0.51||0.80||12.74|
|WESTERN ASSET MORTGAGE CAPITAL||9.83||10.7||0.92||1.24||12.58|
|AMERICAN CAPITAL AGENCY||15.64||0.0||-1.54||1.92||12.21|
|ARMOUR RESIDENTIAL REIT||17.26||0.0||-9.30||2.04||12.03|
|TWO HARBORS INVESTMENT||13.28||0.0||-2.81||1.60||12.02|
|INVESCO MORTGAGE CAPITAL||15.18||0.0||-1.01||1.80||11.80|
|AG MORTGAGE INVESTMENT TRUST||17.47||6.1||2.87||1.90||10.89|
|PENNYMAC MORTGAGE INV TRUST||22.24||9.5||2.35||1.88||8.50|
|BLACKSTONE MORTGAGE TRUST||36.16||14.5||2.49||2.48||6.94|
|ISHARES FTSE NAREIT MORTG PLUS CAPPED INDEX FUND||41.97||0.0||0.00||0.00||0.00|
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