Annaly Capital Management's Dividend at Risk: Earnings Fall Short Again
The Numbers Don't Lie: This 14%-Yielding Dividend Is at Risk for Another Reduction
Annaly Capital Management's earnings fell short of its dividend payment in the first quarter. Annaly Capital Management (NYSE: NLY) currently offers a monster dividend yield. At 14%, it's 10 times higher than the S&P 500's 1.4% dividend yield.
The decline continues
- Annaly recorded $0.64 per share of earnings available for distribution (EAD) during the first quarter, falling short of the $0.65 dividend payment.
- Annaly's leverage ratio decreased, but the unstable market poses a threat.
On a more positive note, Annaly's leverage ratio has also declined. Leverage was 5.6 times at the end of the first quarter, an improvement from 5.7x at the end of 2023. Conversely, if earnings keep falling, a dividend cut might be inevitable.
Renewed volatility
- Stable market conditions in the first quarter supported Annaly’s earnings, but recent weeks have seen increased volatility.
- CEO David Finkelstein highlighted the company's current investment opportunities and risks amid changing market dynamics.
Should Annaly's earnings continue to decline, another dividend cut is increasingly likely, making it a risky choice for income-oriented investors.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.