Dividend coverage is currently unsustainable, as evidenced by a 2026Q1 payout ratio of 1.89x relative to AFFO, which has frequently dipped into negative territory.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 |
|---|
| Cash from Operations | -552.27M | 692.91M | 3.31B | 2.37B | 5.37B | 3.08B | 527.97M | -1.2B | 2.62B | 6.93B | 6.86B | -3.17B | 6.13B | -12.89B | 7.64B | 2.42B | 10.86B | 10.82B | 1.11B | 525.38M | 221.63M | 281.53M | 416.92M | 354.92M | 302.11M | 99.77M | 14.25M | 25.38M | 18.8M | 6.5M |
| Operating CF Growth % | -834.56% | -79.07% | 39.86% | -55.94% | 74.61% | 482.77% | 144.01% | -145.75% | -62.18% | 1.11% | 316.48% | -151.68% | 147.53% | -268.76% | 215.67% | -77.72% | 0.42% | 874.93% | 111.19% | 137.06% | -21.28% | -32.47% | 17.47% | 17.48% | 202.8% | 599.98% | -43.84% | 35.01% | 189.23% | - |
| Operating CF / Revenue % | -8.08% | 10.35% | 52.09% | 42.21% | 129.46% | 409.48% | 35.57% | -66.11% | 126.08% | 294.86% | 344.07% | -228.4% | 649.37% | -542.81% | 260.82% | 79.56% | 489.62% | 461.53% | 35.04% | 21.73% | 17.66% | 38.01% | 75.8% | 180.77% | 129.4% | 100.18% | 75.52% | 124.29% | 107.43% | 114.04% |
| Net Income | 2.19B | 2.05B | 1.01B | -1.64B | 1.73B | 2.4B | -889.77M | -2.16B | 54.15M | 1.57B | 1.43B | 465.75M | -842.28M | 3.73B | 1.74B | 344.46M | 1.27B | 1.96B | 346.18M | 414.38M | 93.82M | -9.25M | 248.59M | 180.1M | 219.51M | 92.28M | 16.59M | 18.14M | 15.5M | 4.9M |
| Depreciation & Amortization | 34.44M | 34.04M | 30.36M | 24.81M | 20.51M | 24.64M | 41.36M | 31.56M | 72.36M | 26.55M | 34.76M | 19.97M | 4.59M | 2.61M | 4.08M | 2.3M | 1.6M | 2.32M | 4.13M | 66.55M | 65.21M | 154.88M | 179.73M | 216.57M | 106.2M | 36.87M | 2.65M | 6.13M | 8.2M | 2.6M |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.41M | 7.05M | 1.16M | 1.07M | 2.55M | 5.58M | 5.27M | 4.76M | 4.51M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -2.89B | -1.62B | 2.12B | 4.68B | 3.85B | 689.82M | 1.28B | 1.12B | 2.31B | 5.17B | 5.31B | -4.64B | 5.06B | -15.15B | 4.56B | 1.92B | 322.16M | -349.52M | 881.94M | -34.06M | 72.76M | 133.88M | -6.03M | -39.18M | -19.62M | -2.81M | -2.03M | -454.78K | -3.3M | -800K |
| Working Capital Changes | 95.9M | 224.77M | 148.43M | -694.48M | -223.07M | -33.9M | 92.01M | -188.59M | 188.9M | 27.49M | -33.36M | 7.33M | 16.88M | 134.43M | 40.87M | -49.5M | -1.56M | 9.04B | -122.67M | 78.51M | -10.16M | 2.02M | -5.38M | -2.58M | -3.98M | -26.56M | -2.96M | 1.57M | -1.6M | -200K |
| Cash from Investing | -33.42B | -27.36B | -14.98B | -8.42B | -14.53B | 4.9B | 40.35B | -20.64B | -908.42M | -14.67B | -2.06B | 11.67B | -7.8B | 37.55B | -18.69B | -25.12B | -13.85B | -7.34B | -2.27B | -21.46B | -15.04B | 3B | -6.46B | -1.2B | -4.27B | -5.26B | -294.41M | -74.49M | -365.7M | -1.06B |
| Acquisitions (Net) | 0 | 0 | 0 | 0 | 0 | 1.12B | 0 | 0 | -258.33M | 5.45M | 41.7M | 0 | 0 | -708.68M | -800K | -3.99M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Purchase of Investments | -42.61B | -40.75B | -32.21B | -41.04B | -45.47B | -22.34B | -32.68B | -64.09B | -45.44B | -102.35M | -243.57M | -583.61M | -38.82B | -984.74M | -86.16B | -69.12B | -25.46B | -25.15B | -26.38B | -33.14B | -23.2B | -7.42B | -14.4B | -13.14B | -11.08B | -8.19B | -952.74M | -559.7M | -1.42B | -1.31B |
| Sale of Investments | 23.28B | 25.51B | 27.94B | 37.41B | 34.6B | 30.42B | 72.21B | 25.71B | 33.41B | 226.59M | 96.55M | 206.63M | 22.65B | 122.46M | 14.43M | 44.03B | 11.39B | 17.83B | 24.11B | 11.68B | 8.16B | 10.42B | 7.94B | 11.94B | 6.81B | 2.93B | 658.33M | 485.21M | 1.05B | 254.5M |
| Other Investing | -13.06B | -11.22B | -9.85B | -4.4B | -2.64B | -3.76B | 33.49B | 17.75B | 11.38B | -14.78B | -1.78B | 12.05B | 8.36B | 39.12B | -13.39M | -16.34M | 223.22M | -13.65M | 0 | 0 | 0 | 0 | 2.53M | 0 | 0 | 0 | 0 | 0 | 0 | 100K |
| Cash from Financing | 34.05B | 27.22B | 11.75B | 5.88B | 9.39B | -7.88B | -41.49B | 21.96B | -684.44M | 12.2B | -5.02B | -8.47B | 2.86B | -24.72B | 10.68B | 23.41B | 1.76B | -2.88B | 1.97B | 20.95B | 14.9B | -3.28B | 6.05B | 848.68M | 3.97B | 5.16B | 280.2M | 49.11M | 346.4M | 1.05B |
| Dividends Paid | -2B | -1.88B | -1.49B | -1.52B | -1.52B | -1.36B | -1.48B | -1.69B | -1.54B | -1.35B | -1.22B | -1.21B | -1.21B | -1.64B | -2.15B | -2.04B | -1.6B | -1.27B | -975.07M | -263.67M | -95.53M | -190M | -230.13M | -191.59M | -202M | -56.11M | -17.46M | -17.08M | -14.4M | -1.9M |
| Common Dividends | -2B | -1.88B | -1.49B | -1.52B | -1.52B | -1.36B | -1.48B | -1.69B | -1.54B | -1.35B | -1.22B | -1.21B | -1.21B | -1.64B | -2.15B | -2.04B | -1.6B | -1.27B | -975.07M | -263.67M | -95.53M | -190M | -230.13M | -191.59M | -202M | -56.11M | -17.46M | -17.08M | -14.4M | -1.9M |
| Debt Issuance (Net) | 4M | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | -1000K | 1000K | 1000K | -1000K | 1000K | -1000K | 1000K | 0 | 1000K | 0 | 0 | 1000K | 1000K | -1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K | 1000K |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | -669.42M | -223.57M | -412.5M | -185.31M | -102.71M | -114.26M | 0 | -141.15M | -255.9M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 23.56B | 16.45B | 3.72B | 2.91B | 4.16B | -10.08B | -40.47B | 20.88B | 1.32B | -3.16M | -1.9M | 5.11M | 3.68B | 5.06M | 12.24B | 20.1B | 1.73B | -1.62B | 792.26M | 195.76M | 16M | 0 | 0 | 0 | 0 | 475.66M | 7.39M | 8.17M | -100K | 0 |
| Net Change in Cash | 78.92M | 549.81M | 75.88M | -164.57M | 234.62M | 98.39M | -607.03M | 114.98M | 1.03B | -833.16M | -229.51M | 28.01M | 1.19B | -63.35M | -378.41M | 711.57M | -1.22B | 595.22M | 805.39M | 12.18M | 86.97M | -1.04M | 5.61M | -479K | 297K | 316.19K | 41.14K | 2.9K | -500K | 500K |
| Exchange Rate Effect | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash at Beginning | 2.04B | 1.49B | 1.41B | 1.58B | 1.34B | 1.24B | 1.85B | 1.74B | 706.59M | 1.54B | 1.77B | 1.74B | 552.44M | 615.79M | 994.2M | 282.63M | 1.5B | 909.35M | 103.96M | 91.78M | 4.81M | 5.85M | 247K | 726K | 429K | 113.06K | 71.92K | 69.02K | 500K | 0 |
| Cash at End | 1.91B | 2.04B | 1.49B | 1.41B | 1.58B | 1.34B | 1.24B | 1.85B | 1.74B | 706.59M | 1.54B | 1.77B | 1.74B | 552.44M | 615.79M | 994.2M | 282.63M | 1.5B | 909.35M | 103.96M | 91.78M | 4.81M | 5.85M | 247K | 726K | 429.25K | 113.06K | 71.92K | 0 | 500K |
| Free Cash Flow | -1.58B | -222.16M | 2.45B | 1.97B | 4.36B | 2.54B | 527.97M | -1.2B | 2.62B | 6.92B | 6.68B | -3.17B | 6.13B | -12.89B | 75.11B | 2.42B | 10.86B | 10.82B | 1.11B | 525.38M | 221.63M | 281.53M | 416.92M | 354.92M | 302.11M | 99.77M | 14.25M | 25.38M | 18.8M | 6.5M |
| FCF Growth % | -318.98% | -109.08% | 24.22% | -54.79% | 71.67% | 380.84% | 144.01% | -145.76% | -62.12% | 3.58% | 310.98% | -151.68% | 147.53% | -117.17% | 3008.12% | -77.75% | 0.42% | 874.93% | 111.19% | 137.06% | -21.28% | -32.47% | 17.47% | 17.48% | 202.8% | 599.98% | -43.84% | 35.01% | 189.23% | - |
| FCF / Revenue % | -23.12% | -3.32% | 38.51% | 35.14% | 105.02% | 337.86% | 35.57% | -66.11% | 126.06% | 294.37% | 335.33% | -228.4% | 649.37% | -542.81% | 2564.25% | 79.44% | 489.62% | 461.53% | 35.04% | 21.73% | 17.66% | 38.01% | 75.8% | 180.77% | 129.4% | 100.18% | 75.52% | 124.29% | 107.43% | 114.04% |
Mortgage basis spread volatility
As reported in recent financial filings, Annaly’s AFFO has frequently failed to cover dividend distributions, with the 2026Q1 payout ratio reaching 1.89x, indicating that the company is relying on capital recycling or balance sheet liquidity rather than recurring cash flow to sustain its current dividend policy.
The persistent inability of AFFO to consistently exceed dividend payments suggests that the current distribution level may be structurally unsupported by core operations. Investors should monitor whether management continues to prioritize dividend maintenance at the expense of book value preservation during periods of market volatility.
Based on the provided data, the relationship between Net Income and FFO is highly erratic, with the FFO/NI ratio swinging from -25.18 in 2024Q3 to 5.83 in 2024Q4, demonstrating that GAAP earnings are fundamentally disconnected from the actual cash-generating capacity of the mortgage portfolio.
This extreme variance highlights the impact of non-cash mark-to-market adjustments on interest rate hedges and MBS valuations. The lack of correlation between these metrics suggests that headline GAAP figures provide little utility for assessing the underlying health of the company's interest-spread business model.
According to quarterly reports, Annaly consistently records significant negative capital expenditures, reaching a peak of -$515.8M in 2024Q1, which directly reduces the AFFO available for shareholders and underscores the high cost of maintaining the portfolio's competitive position in the Agency MBS and credit markets.
These recurring capital outflows appear to be a structural drag on cash flow rather than discretionary investment. The magnitude of these adjustments suggests that the company's 'true' cash earnings are significantly lower than the headline FFO figures often cited by market participants.
Financial statements reveal that GAAP operating cash flow is subject to extreme swings, ranging from a $2.8B inflow in 2024Q4 to a $1.7B outflow in 2024Q3, which complicates the assessment of the company's ability to generate stable cash from its core investment activities.
Such volatility may indicate that working capital changes and repo-market collateral requirements are creating significant noise in the cash flow statement. This instability warrants further investigation into whether the company's liquidity management is becoming overly sensitive to short-term fluctuations in mortgage basis spreads.
Quick answers to the most common questions about buying NLY stock.
Annaly Capital Management, Inc. (NLY) generated $692.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Annaly Capital Management, Inc. (NLY) reported negative free cash flow of $222.2M in 2025, indicating capital requirements exceeded cash from operations.
Annaly Capital Management, Inc. (NLY) spent $915.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Annaly Capital Management, Inc. (NLY) returned $1.88B to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.