Annaly Capital Management's dividend yield of 13% could come under pressure if the Federal Reserve raises interest rates. The mortgage REIT reported earnings available for distribution of $0.76 per share in the first quarter of 2026 and paid a dividend of $0.70 per share, a 92% payout ratio. Rising oil prices and persistent inflation may force the Fed to hike rates, which would increase Annaly's short-term borrowing costs while the income from its long-maturity mortgage securities remains fixed. The company recently raised its quarterly dividend to $0.75 per share, potentially tightening dividend coverage further. Annaly's dividend history is highly variable, and investors relying on the payout should exercise caution.
Annaly Capital Management, Inc.Rising interest rates would increase Annaly's short-term borrowing costs while income from long-maturity mortgage securities remains fixed, pressuring dividend coverage.