Annaly Analyst Downgrade, Yield Hunters Stay (NLY)

Annaly Capital Management Inc. (NYSE: NLY) is actually managing to hold up better than some may have guessed considering an analyst downgrade this morning.  Dividend yield investors have been clipping double-digit yields in this one and in other Mortgage-REITs and no one wants to be the last one out of the door if and when the Mortgage-REIT sector turns back south.  This morning it was a firm called Macquarie which downgraded the common shares of Annaly, not the preferred shares, to Neutral from Outperform.

Keep in mind that this downgrade was on the heels of a downgrade last week when FBR Capital Markets cut the rating to Market Perform from Market Outperform.

With earnings last week, Annaly showed that its leverage has been coming down… it was 5.4:1 at the end of the December quarter, down from 5.5:1 at the end of the September quarter and down from 6.7:1 a year earlier. The company’s annualized yield on its average interest earning assets during the quarter was 3.31%, down from 3.71% one quarter earlier and down from 3.65% a year earlier.

Shares are down 0.7% at $16.52 on only 4.2 million shares having traded hands.  The 52-week trading range is $14.05 to $18.79 and the market cap is still $16 billion.

JON C. OGG