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TheStreet Open House

Why Annaly Capital Management (NLY) Is Up Today

NEW YORK (TheStreet) -- Annaly Capital Management (NLY) was gaining 2.9% to $11.19 Wednesday after beatings analysts' earnings and revenue estimates for the fourth quarter.

In the fourth-quarter, the company post earnings of 35 cents a share. Analysts surveyed by Thomson Reuters expected earnings of 26 cents a share for the quarter. Annaly reported revenue of $633.9 million for the quarter, easily beating analysts' estimates of $337.7 million.

"We are encouraged by the reduced uncertainty in the fixed income markets with the introduction of monetary policy tapering," Annaly chairman and CEO Wellington Denahan said in a statement. "Our commercial assets continue to build momentum, with commercial investments now representing 14% of our stockholders' equity. The lower leverage stance permits us to be opportunistic with capital deployment allowing us to strengthen earnings in future periods."

Must read: 3 Stocks Advancing The Real Estate Industry

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TheStreet Ratings team rates ANNALY CAPITAL MANAGEMENT as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ANNALY CAPITAL MANAGEMENT (NLY) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ANNALY CAPITAL MANAGEMENT's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for ANNALY CAPITAL MANAGEMENT is currently very high, coming in at 91.13%. Regardless of NLY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NLY's net profit margin of 29.04% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Real Estate Investment Trusts (REITs) industry. The net income has decreased by 14.4% when compared to the same quarter one year ago, dropping from $224.76 million to $192.46 million.
  • Net operating cash flow has significantly decreased to $810.87 million or 77.46% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ANNALY CAPITAL MANAGEMENT has marginally lower results.
  • You can view the full analysis from the report here: NLY Ratings Report

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