Cantor Fitzgerald Starts Annaly Capital Management (NLY) at Buy; Largest Market Cap and Diversification

Cantor Fitzgerald initiates coverage on Annaly Capital Management (NYSE: NLY) with a Buy. PT $18.50.

Cantor analyst says, "Unlike its peers, Annaly is also diversified: it is already a horizontallyintegrated fixed-income asset manager and, in our view, is in the process of becoming a vertically-integrated mortgage origination/securitization entity for conforming and non-conforming mortgages...Annaly's investment portfolio is also more heavily weighted than its peers toward fixed-rate mortgage collateral (86% fixed-rate), which could be an issue when interest rates increase...We expect (a) Annaly's existing investments, (b) its two 1Q:11 equity raises, and (c) a continuation of the current favorable environment (especially a steep yield curve) for Agency mortgage REITs, to enable it to sustain at least a peer ROE through 2011. Accordingly, we believe that Annaly should trade at least in line with its peers."

For more ratings news on Annaly Capital Management click here and for the rating history of Annaly Capital Management click here.

Shares of Annaly Capital Management closed at $17.23 yesterday.

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