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AGNC Investment and Annaly Capital are mortgage REITs, but they give you different kinds of mortgage-market exposure. AGNC is built almost entirely around Agency mortgage-backed securities (MBS), while Annaly combines Agency MBS with residential credit assets and mortgage-servicing rights (MSR). If you want the clearest Agency-MBS concentration, AGNC is the more focused description; if you want a broader mortgage-finance platform and accept additional credit and servicing risks, Annaly is the broader description. Neither label makes one stock universally better. The useful choice depends on how you want interest-rate, mortgage-spread, leverage, funding, credit and prepayment risks to behave in your portfolio.
The latest directly comparable figures in the source set are for the quarter ended September 30, 2026. Company definitions differ, so the figures below are a framework for analysis, not an individualized recommendation or a forecast.
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| Name | Best for | Key spec | Checked |
|---|---|---|---|
| AGNC Investment Corp. (AGNC) | Investors seeking a mostly Agency-MBS mortgage REIT | 99% Agency MBS; $94.4 billion portfolio; 7.9x tangible-book-value “at risk” leverage (September 30, 2026) | November 2026 |
| Annaly Capital Management, Inc. (NLY) | Investors seeking Agency, residential-credit and servicing exposure in one platform | $106.5 billion total portfolio, including $91.8 billion Agency, $10.4 billion residential credit and $4.3 billion MSR market value (September 30, 2026) | November 2026 |
Prices checked November 2026.
What is the main difference between AGNC and Annaly?
AGNC concentrates on Agency mortgage assets, whereas Annaly operates three strategies: Agency MBS, residential credit and mortgage-servicing rights. That distinction changes what drives earnings and book value. Agency guarantees substantially reduce borrower-default credit risk, but they do not remove interest-rate, prepayment, extension, funding or mortgage-spread risk. Annaly’s credit and servicing businesses add potential sources of return and diversification, while also adding borrower-credit, servicing and operational exposures.
AGNC’s concentrated Agency strategy
AGNC says 99% of its portfolio was Agency MBS as of September 30, 2026. The portfolio includes pass-through certificates, collateralized mortgage obligations (CMOs) and to-be-announced (TBA) securities, according to its portfolio description. Agency securities carry a guarantee from a government agency or government-sponsored enterprise, which addresses much of the direct loss risk from mortgage default. The guarantee does not protect an investor in AGNC from changes in rates, mortgage spreads, expected prepayments, funding costs or the market value of hedges and securities.
Concentration can make the company easier to characterize: its results are closely tied to Agency-MBS pricing, financing and hedging. It is not the same as low risk. AGNC notes that its hedges generally are not designed to protect against mortgage-spread risk, so a widening or tightening of spreads can affect tangible book value even when borrower credit remains strong.
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Annaly’s three-part mortgage-finance platform
Annaly reported a $106.5 billion total portfolio at September 30, 2026. The reported mix included a $91.8 billion Agency portfolio, a $10.4 billion residential-credit portfolio and MSR with a $4.3 billion market value. Residential credit primarily consists of non-Agency residential whole loans and securitized products. MSR exposure is linked to the economics of servicing mortgage loans rather than simply owning the mortgage securities.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsThose businesses can diversify the sources of earnings, but diversification is not a guarantee of smoother returns. Credit performance, servicing costs and operating execution introduce risks that a nearly pure Agency-MBS strategy does not have in the same form. Annaly’s total-portfolio presentation also includes specified off-balance-sheet economic exposures and other adjustments described in its release footnotes, so its headline total should not be treated as directly equivalent to AGNC’s portfolio total.
What did each company report for the quarter ended September 30, 2026?
The quarter was volatile for fixed-income markets, and both companies reported meaningful market-value effects. Read the metrics with their labels intact: AGNC’s net spread and dollar-roll income is not the same calculation as Annaly’s earnings available for distribution (EAD).
| Measure | AGNC | Annaly | How to read it |
|---|---|---|---|
| Portfolio | $94.4 billion total portfolio; 99% Agency MBS on the company portfolio page | $106.5 billion total portfolio; $91.8 billion Agency, $10.4 billion residential credit and $4.3 billion MSR market value | Perimeters and included exposures differ. |
| Book value | $7.13 tangible net book value per common share | $17.86 book value per common share | AGNC reports tangible book value; Annaly’s figure is book value. The per-share levels are not a quality ranking. |
| Leverage | 7.9x tangible net book value “at risk” leverage | 8.0x GAAP leverage; 5.9x economic leverage | Definitions and denominators differ, so a simple higher/lower ranking is misleading. |
| Quarterly earnings measure | $0.37 per common share net spread and dollar-roll income | $0.80 per average common share EAD | Both are non-GAAP measures, but they are not interchangeable. |
| Distribution information | The cited comparison does not establish a current payout-coverage figure. | $0.75 common dividend declared for the quarter; EAD was $0.80 per average common share | One quarter of EAD above the dividend does not ensure future coverage. |
| Liquidity and hedge context | $6.3 billion of unencumbered cash and Agency MBS; 90% hedge coverage of funding liabilities including option hedges | 100% hedge ratio; $8.5 billion total assets available for financing | These are issuer-defined, quarter-end snapshots. |
AGNC’s tangible net book value fell 16.9% during the quarter, from $8.58 per common share at June 30 to $7.13 at September 30, 2026. Its net spread and dollar-roll income declined to $0.37 per share from $0.40 in the prior quarter. Those are historical results during the reported period, not a forecast of the next quarter.
Annaly reported a GAAP net loss of $1.36 per average common share, EAD of $0.80 per average common share and a negative 7.6% economic loss/return for the quarter. It declared a $0.75 quarterly common dividend. The coexistence of a GAAP loss and positive EAD illustrates why investors must understand what each non-GAAP measure includes and excludes instead of treating one figure as the single “true” result. See Annaly’s third-quarter release and financial supplement for reconciliations.
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How should you compare book value and leverage?
Start with the exact definition and reporting date, not the headline multiple. AGNC’s $7.13 figure is tangible net book value per common share, and its 7.9x measure is leverage “at risk” relative to tangible net book value. Annaly reports $17.86 book value per common share, 8.0x GAAP leverage and 5.9x economic leverage. Those pairs use different accounting and economic concepts.
Book value is a snapshot of the equity supporting the portfolio. Mortgage-REIT book value can move when Agency MBS prices, mortgage spreads, hedges, interest rates and prepayment expectations change. A higher per-share number at one company does not mean the stock is safer or cheaper; the companies have different share counts, definitions and asset mixes.
Leverage magnifies both gains and losses. Compare leverage over several quarters using the same issuer-defined series, and examine whether the company is discussing repurchase agreements, other secured financing, derivatives and off-balance-sheet exposures consistently. Annaly’s release presents both GAAP and economic leverage; AGNC emphasizes tangible-book-value “at risk” leverage. Without reconciling those definitions, declaring one company more leveraged from the two headline numbers would be false precision.
What risks drive AGNC and Annaly differently?
Interest-rate risk
Changes in short- and long-term rates affect the value of mortgage assets, the cost of financing and the performance of interest-rate hedges. Mortgage securities also have changing duration: when borrowers refinance or prepay, principal returns sooner; when refinancing slows, cash flows can extend. A rate move can therefore change both market value and the expected timing of cash flows.
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchBoth companies use hedges, but a hedge ratio is not a promise that book value will be stable. AGNC reported 90% hedge coverage of funding liabilities, including option hedges, at quarter end. Annaly reported a 100% hedge ratio. The measures are company-defined and do not show how well each portfolio is protected against every rate path, basis move or volatility change.
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Mortgage-spread and basis risk
Mortgage spreads measure the compensation investors demand for mortgage assets relative to a reference interest-rate curve. Spreads can widen because of market liquidity, supply, volatility or risk appetite even when Treasury rates are unchanged. AGNC explicitly says its hedges generally are not designed to protect against spread risk. Annaly also remains exposed to mortgage-market spread movements through its Agency and other mortgage assets.
Prepayment and extension risk
Faster prepayments can return principal when reinvestment opportunities are less attractive, while slower prepayments can extend a security’s duration as rates rise or refinancing becomes difficult. These changes affect asset yields, hedge positioning and book value. Agency guarantees address borrower-default losses, not the economic effects of changing prepayment speeds.
Funding and liquidity risk
Mortgage REITs commonly finance assets through secured borrowing and must manage collateral, haircuts, margin requirements, maturities and funding costs. AGNC reported $6.3 billion of unencumbered cash and Agency MBS, equal to 57% of tangible equity at quarter end, in its results release. Annaly reported $8.5 billion of total assets available for financing. The figures use different descriptions and are snapshots rather than proof of relative safety. A thorough review should track funding maturity, counterparties, collateral and liquidity through stressed markets.
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Annaly’s residential-credit portfolio includes non-Agency whole loans and securitized products, where borrower performance and credit losses matter more directly than in Agency MBS. MSR exposure depends on servicing economics, prepayment behavior, servicing costs and operational execution. These businesses may respond differently from Agency assets during a housing or credit cycle, which can diversify returns but also complicate analysis.
Which mortgage REIT may fit a particular portfolio objective?
Use the following as a decision framework, not as a ranking of expected returns. The right question is which risks you already own and which additional exposures you can tolerate.
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AGNC may be easier to investigate if you want Agency concentration
- Primary exposure: A portfolio dominated by Agency MBS, including pass-throughs, CMOs and TBA securities.
- Risk profile to study: Interest-rate, mortgage-spread, prepayment, extension, funding and leverage sensitivity, with comparatively less direct borrower-credit exposure.
- Analytical benefit: The strategy is relatively straightforward to describe because 99% of the reported portfolio was Agency MBS at the latest date.
- Important limitation: Concentration can increase sensitivity to a common set of mortgage-market factors; Agency status does not eliminate book-value volatility or spread risk.
Annaly may be worth investigating if you want multiple mortgage businesses
- Primary exposure: Agency MBS alongside residential credit and MSR.
- Risk profile to study: Agency-market risks plus borrower-credit, servicing, operational and valuation risks.
- Analytical benefit: Different businesses can contribute under different market conditions, potentially broadening the opportunity set.
- Important limitation: A broader platform is harder to reduce to one yield or leverage number, and diversification does not guarantee lower volatility.
If portfolio income is your priority
Do not select solely on an indicated dividend yield, especially when no current share price or yield has been established here. Examine the issuer’s distribution history, the definition and trend of its earnings measure, realized and unrealized gains or losses, book-value changes, financing costs and the sustainability of leverage. Annaly’s $0.80 Q3 EAD versus its $0.75 dividend is one quarter’s relationship, not a promise of continued coverage. The cited AGNC comparison does not provide a current payout-coverage figure.
If you already own rate-sensitive assets
Map your existing exposure first. A portfolio containing long-duration bonds, mortgage funds or other leveraged rate-sensitive securities may already react strongly to rates and spreads. Adding a concentrated Agency-MBS REIT can increase that common-factor exposure; adding Annaly can add credit and servicing factors as well. Correlation can change in stressed markets, so do not assume that two different labels will always diversify each other.
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What should you check before buying either stock?
- Read the latest quarterly release and supplement. Confirm the reporting date, portfolio composition, book-value definition, leverage bases, hedge information and liquidity disclosures.
- Separate Agency and non-Agency assets. For AGNC, verify the proportion of Agency MBS. For Annaly, track Agency, residential credit and MSR separately rather than relying on the total portfolio.
- Trace the earnings measure. Identify whether a figure is GAAP net income, net spread and dollar-roll income, EAD or another non-GAAP measure. Read the reconciliation and compare trends over multiple quarters.
- Compare leverage on a like-for-like basis. Use the same issuer’s series over time, and document whether the denominator is GAAP equity, tangible equity or an economic measure.
- Examine book-value movement. Ask which changes came from rates, mortgage spreads, hedges, realized gains or losses and portfolio repositioning.
- Review funding resilience. Look for unencumbered assets, cash, financing availability, repo maturity and collateral requirements. A quarter-end liquidity figure can change rapidly.
- Stress prepayments and extensions. Consider what faster or slower mortgage prepayments would do to asset duration, reinvestment and hedge effectiveness.
- For Annaly, analyze each non-Agency business. Review credit performance, servicing economics and the share of results coming from residential credit and MSR.
- Check corporate actions and distribution policy. Verify the latest declared dividend, ex-dividend date and any changes directly from issuer filings. The research used here does not establish a current market yield, tax character or valuation multiple.
- Match position size to risk capacity. Leverage can amplify book-value losses, and a diversified business mix does not remove that structural risk.
What common comparison mistakes should you avoid?
- Ranking by dividend yield alone: Yield changes with the share price and can be unsupported by durable earnings.
- Treating book-value numbers as interchangeable: Tangible book value and GAAP book value are not the same measure.
- Comparing leverage without definitions: AGNC’s “at risk” tangible leverage and Annaly’s GAAP and economic leverage use different bases.
- Assuming Agency means risk-free: Guarantees reduce credit-default risk, not rate, spread, prepayment, extension or funding risk.
- Adding portfolio totals mechanically: Annaly’s total includes specified economic exposures and adjustments that may not share AGNC’s accounting perimeter.
- Reading one quarter as a trend: Q3 2026 results describe a volatile period; use multiple reports to assess direction.
- Confusing management commentary with an independent forecast: Statements by AGNC’s or Annaly’s executives describe management’s view and positioning, not a guarantee of future performance.
What did management say about the quarter?
AGNC CEO and CIO Peter Federico said in the company’s Q3 release: “AGNC’s net spread and dollar roll income per common share was $0.37 for the third quarter, and AGNC concluded the third quarter with tangible net book value ‘at risk’ leverage of 7.9x and a liquidity position of $6.3 billion of unencumbered cash and Agency MBS, or 57% of our tangible equity at quarter end.” This is management’s description of reported results and liquidity, not an independent safety assessment.
Annaly CEO and Co-Chief Investment Officer David Finkelstein said: “While the third quarter of 2026 was a challenging period for fixed income markets, which we were not immune to, we entered the quarter prepared for the volatility. Our cycle-low leverage and minimal duration exposure provided us with the flexibility to actively manage our portfolio while continuing to make attractive investments across our three strategies.” That statement reflects management’s assessment and should be read alongside the company’s GAAP, EAD and economic-return figures.
How we picked the comparison order
AGNC appears first because its 99% Agency-MBS concentration creates the clearest single-strategy contrast. Annaly follows because its three-strategy platform is the broader mortgage-finance comparison. The framework prioritizes portfolio mix, risk sources, issuer-defined leverage and book-value measures, earnings and distribution definitions, and liquidity disclosures from the September 30, 2026 reports. It does not rank either company by expected return, valuation or current yield.
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Bottom line: which one fits?
AGNC is the more focused choice to investigate when your intended exposure is predominantly Agency MBS and you are prepared for leverage, funding, mortgage-spread and duration-related volatility. Annaly is the broader choice to investigate when you want Agency exposure combined with residential credit and MSR and accept the additional credit, servicing and operational analysis that requires. The latest quarter does not establish a universal winner: AGNC’s concentrated structure and Annaly’s diversified structure carry different risks, while their reported metrics are not perfectly comparable. Build the decision from your existing portfolio, risk capacity and the issuer’s multi-quarter disclosures rather than from a single dividend, book-value number or leverage headline.
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Frequently Asked Questions
Are AGNC and Annaly classified as mortgage REITs in the same way?
Both are mortgage-focused real estate investment companies, but their asset mixes differ materially. AGNC is overwhelmingly Agency-MBS oriented, while Annaly also owns residential-credit assets and mortgage-servicing rights, so the economic exposures behind the same broad sector label are not identical.
Can I compare AGNC’s $7.13 book value with Annaly’s $17.86 book value?
Not as a direct scorecard. AGNC’s figure is tangible net book value per common share, while Annaly reports book value per common share; share counts, accounting conventions and portfolio perimeters also differ.
Does an Agency guarantee protect shareholders from a dividend cut?
No. The guarantee primarily addresses credit losses on the underlying mortgages. Funding costs, leverage, mortgage spreads, prepayments, hedge results and changes in portfolio income can still affect a mortgage REIT’s earnings and distribution decisions.
Where can I find the definitions behind Annaly’s EAD and leverage figures?
Use Annaly’s quarterly release and financial supplement, which provide the company’s reconciliations and definitions. Read those documents with the same quarter’s balance-sheet and portfolio disclosures so the non-GAAP figures are not viewed in isolation.
