A comprehensive analysis of the company's dividend history, yield, growth rates, and sustainability
Annaly Capital Management Inc (NLY, Financial) recently announced a dividend of $0.65 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-09-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Annaly Capital Management Inc's dividend performance and assess its sustainability.
What Does Annaly Capital Management Inc Do?
Annaly Capital Management Inc is an American mortgage real estate investment trust. The Company owns a portfolio of real estate related investments, including mortgage pass-through certificates, collateralized mortgage obligations, credit risk transfer securities, other securities representing interests in or obligations backed by pools of mortgage loans, residential mortgage loans and mortgage servicing rights. Its business objective is to generate net income for distribution to its stockholders and optimize its returns through prudent management of its diversified investment strategies. The Company's three investment groups are comprised of the following: Annaly Agency Group, Annaly Residential Credit Group, Annaly Mortgage Servicing Rights Group.
A Glimpse at Annaly Capital Management Inc's Dividend History
Annaly Capital Management Inc has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Annaly Capital Management Inc's Dividend Yield and Growth
As of today, Annaly Capital Management Inc currently has a 12-month trailing dividend yield of 15.91% and a 12-month forward dividend yield of 13.55%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Annaly Capital Management Inc's annual dividend growth rate was -5.70%. Extended to a five-year horizon, this rate decreased to -7.20% per year. And over the past decade, Annaly Capital Management Inc's annual dividends per share growth rate stands at -6.60%.
Based on Annaly Capital Management Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Annaly Capital Management Inc stock as of today is approximately 10.95%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Annaly Capital Management Inc's dividend payout ratio is 0.00.
Annaly Capital Management Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Annaly Capital Management Inc's profitability 3 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Annaly Capital Management Inc's growth rank of 3 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Dividend Sustainability: A Final Verdict
Annaly Capital Management Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics present a mixed picture. While the company has a consistent dividend payment record, its negative growth rate and low profitability rank raise concerns about the sustainability of its dividends. Investors should carefully consider these factors before making investment decisions.
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