Annaly Capital's Easy Money Is Gone - But The 12% Yield Isn't

The Alpha Analyst3.32K FollowersFollow5ShareSavePlay(8min)CommentsSummaryAnnaly Capital Management delivered over 20% economic returns in 2025, with a 34% price appreciation and stable, high-yield dividends.NLY’s current environment is defined by tight agency spreads and premium valuations, shifting the thesis to income stability rather than further rerating.Portfolio diversification toward Residential Credit and MSR aims to smooth cash flows, reducing dependency on agency spreads and rate volatility.I maintain a Hold rating on NLY, emphasizing carry over capital gains, with current valuations not supporting new capital deployment.Nature/iStock via Getty Images In May 2025, I had rated Annaly Capital Management (NLY) as a Hold, leaning toward a Buy (Hold for the short term, accumulation for long term investors). I did see positives ahead, as yield curve steepening would improve spreadsThis article was written byThe Alpha Analyst3.32K FollowersFollowI am a stock analyst with over 20 years of experience in quantitative research, financial modeling, and risk management. My focus is on equity valuation, market trends, and portfolio optimization to uncover high-growth investment opportunities. As a former Vice President at Barclays, I led teams in model validation, stress testing, and regulatory finance, developing a deep expertise in both fundamental and technical analysis. Alongside my research partner (also my wife), I co-author investment research, combining our complementary strengths to deliver high-quality, data-driven insights. Our approach blends rigorous risk management with a long-term perspective on value creation. We have a particular interest in macroeconomic trends, corporate earnings, and financial statement analysis, aiming to provide actionable ideas for investors seeking to outperform the market.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.