Annaly Capital (AAYA) AI Stock Analysis

Company Guidance

Annaly expects to outearn its $0.75 quarterly dividend in Q4, with the current portfolio delivering the dividend, while 2027 will depend on how it evolves; capital allocation is residential credit first, close second Agency, and then not far behind is MSR, with room to grow and maintain a 20% capital allocation to the sector. Agency new money returns are in the mid to high teens, residential credit returns are 13%-16%, residential loans can earn mid-teens returns, and certain BB non-QM bonds could provide 16%, 17%; the company expects non-QM origination this year to be $150 billion to $175 billion, total mortgage origination of $1.9 trillion to $2 trillion, and non-QM to remain 8%-9% of originations. Annaly expects 2026 to be a post GFC record in transaction volume, continues to see ample liquidity and balance sheet capacity to put capital to work, and believes spreads and volatility provide an opportunity to increase leverage tactically, although current leverage generates the returns needed. If mortgage rates stay at 7.375% to 7.5% for an extended period of time, housing can go negative by a couple points nationally, or down 2%-3%, 3%-4%.