Annaly Capital Management Inc. (NYSE: NLY) is holding up rather well considering an analyst downgrade this morning. The research team at Stern Agee lowered the Annaly rating down to Underperform from an already-cautious rating of Neutral. The Mortgage-REIT closed at $16.34 on Wednesday and opened at $16.24 on Thursday and it has a 52-week trading range of $14.05 to $18.79.
Today’s move follows a big gap up in the stock on Wednesday because shares closed at $16.11 on Tuesday despite another dividend cut. The new dividend is only at $0.55 per quarter, down from $0.57, $0.60, and $0.65 in the sequential quarters before. Now the dividend yield is “only” 13.5% on a static basis.
What makes this call so interesting is that Annaly is often considered the best or one of the best in the field of REITs which are actually buyers of mortgage-backed securities on a leveraged basis. A rise in long-term interest rates could have a very adverse impact on the portfolio of its mortgages.
The Market Vectors Mortgage REIT (NYSE: MORT) ETF is down only 0.3% at $25.17 on this volume.
JON C. OGG