Annaly Raises Quarterly Dividend 7.1% to $0.75

Annaly Capital Management increased its quarterly common dividend to $0.75 per share from $0.70, a 7.1% raise. The increase applied to shares with an ex-dividend date of June 30, 2026. At the new rate, the annual dividend is $3.00 per share.

Why the dividend changed

Annaly attributed the increase to the performance of its diversified housing-finance portfolio. Chief Executive Officer David Finkelstein said disciplined portfolio construction, proactive hedging and a prudent capital structure were producing durable cash flows and risk-adjusted returns. The company presented the increase as an operating and capital-allocation decision, with no split, merger or spinoff adjustment attached to it. Annaly’s dividend announcement

The decision followed a first quarter in which earnings available for distribution were $0.76 per average common share, compared with the then-current dividend of $0.70. Annaly also reported a 1.5% economic return and said its Residential Credit and mortgage-servicing-rights businesses had expanded their financing capacity. Those results gave the board current earnings support for a higher distribution while the company continued allocating capital among Agency mortgage-backed securities, Residential Credit and mortgage servicing rights. Annaly’s first-quarter results

Results reported after the declaration reinforced that explanation. Second-quarter earnings available for distribution were $0.79 per average common share, exceeding the new $0.75 dividend, while GAAP net income was $1.06 per average common share. Annaly generated a 5.5% economic return and raised $447 million through its at-the-market program. It deployed capital into higher-coupon Agency securities while adding financing capacity in Residential Credit. Management said the quarter’s earnings and portfolio performance supported the dividend increase. Annaly’s second-quarter results

Dividend track record

The increase extends a recovery that began after Annaly’s last annual cut in 2023. The annual payout fell 26.1% to $2.60 in 2023 from $3.52 in 2022, remained $2.60 in 2024 and then rose 7.7% to $2.80 in 2025. The quarterly rate was $0.65 for the September 30, 2024, and December 31, 2024, ex-dividend dates, then $0.70 from March 31, 2025, through March 31, 2026, before increasing to $0.75 for June 30, 2026.

Annaly has 1 consecutive year of dividend growth, so the current sequence is short. The longer record remains uneven: the annual total fell 3.3% to $3.52 in 2021, was unchanged in 2022 and then sustained the larger 2023 cut. Its dividend growth rate over five years is a 4.5% annual decline. Even at the new $3.00 annual rate, the payout remains below the $3.64 distributed in 2020.

Is the dividend covered?

The dividend consumes 69% of earnings. That indicates current earnings cover the distribution and leave some headroom, consistent with the company’s reported earnings available for distribution exceeding the quarterly dividend in its latest results.

SmarterDividends gives Annaly a dividend safety score of 51 and rates the dividend C, meaning borderline (50-65). In plain terms, the payout is covered on the present figures, but its protection is not strong enough to offset the risks inherent in a leveraged mortgage portfolio. Funding costs, hedging results, prepayments and changes in the value of mortgage assets can move distributable earnings and book value materially between quarters.

Yield and valuation

Annaly’s forward yield is 14.26%, compared with a Real Estate sector median forward yield of 7.06%. The gap signals substantially more income at the current share price, alongside the higher operating and balance-sheet sensitivity associated with a mortgage REIT. For every 100 shares, the new rate represents $300.00 of annual income.

At a share price of $20.77, Annaly has a market value of $15.7 billion. SmarterDividends estimates fair value at $45.27 and classifies the shares as undervalued, equivalent to 115% upside to that estimate. That valuation is model-based rather than a forecast. The stock’s 0.6% loss over one year also shows that the high yield has not been accompanied by a positive price return over that period.

What to watch

The next ex-dividend date is September 30, 2026. Annaly subsequently maintained the quarterly dividend at $0.75, showing that the increase carried into the following quarter rather than operating as a one-time special distribution. Annaly’s third-quarter dividend announcement

The next results will provide the relevant tests of coverage: earnings available for distribution relative to the $0.75 payout, changes in book value, leverage and funding costs, and the returns generated by newly deployed capital. Investors can also track whether the larger Agency portfolio and expanded Residential Credit financing capacity continue to support distributable earnings without weakening the company’s capital position.