CluenexAnnaly Capital Management NLY
Annaly Capital Management scores good on business quality (6.6 of 10). Here is why, in plain words, and what our sealed record shows.
Why it matters
- What Annaly Capital Management does
Annaly Capital Management finances residential real estate by buying mortgage-backed securities through a leveraged portfolio. It earns money on the spread between mortgage yields and its short-term borrowing costs. The firm continues to lean heavily into agency mortgage-backed securities while scaling its servicing portfolio to stabilize cash flows against interest rate volatility.
- What it does best
Annaly scales its mortgage portfolio with a debt-to-equity ratio of 7.2, operating in the top quartile of its sector for revenue growth at 22.1%. This massive scale gives it superior execution in the agency mortgage market compared to peers like RITM, which posted a revenue decline of 6.4%.
- The main risk
Rapid interest rate shifts threaten book value by eroding the market price of its mortgage holdings. Because total debt sits at $116.2 billion against just $2.0 billion in cash, any widening of mortgage spreads forces painful deleveraging or margin calls.
Quality, check by check
Scored against its own industry, from company filings.
Operating margins sit at a healthy 35.2%, pushing profitability into the top quartile of its sector at the 79th percentile. However, free cash flow margin remains negative at -2.4%, showing that scaling revenue does not cleanly convert to free cash.
Annaly holds little structural economic moat, scoring in the bottom quartile for gross margin at 37.8%. Rivals easily replicate its strategy because mortgage securities are commoditized financial instruments traded in hyper-liquid public markets.
Revenue grew 22.1% to $8.4 billion, accelerating sharply from prior years like 2023 when revenue was $2.4 billion. This top-line expansion places it in the top quartile of its sector at the 86th percentile.
Total debt stands at $116.2 billion against $2.0 billion in cash, showing extreme leverage with a debt-to-equity ratio of 7.2. Free cash flow sits negative at -$202 million, reflecting softening cash generation as financing costs pressure the balance sheet.
Insiders
Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.
No open market buys or unplanned sales by executives or directors.
Our sealed record on NLY
Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.
The first sealed verdicts appear here on Oct 11, 2026.
Questions
Annaly Capital Management scores good on the Cluenex quality check (6.6 of 10), measured against its own industry. Profitability is fair, moat weak, growth fast and financial health fair.
In the last 90 days of SEC Form 4 filings: No open market buys or unplanned sales by executives or directors.
Oct 20, 2026, after the close.
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Cite this page: Cluenex, “Annaly Capital Management (NLY)”, https://cluenex.com/stocks/nly/, data as of Oct 10, 2026.