"It was nice to get up-to-date figures on the spread that NLY is actually experiencing.
For the 3rd quarter, the average cost of funds was 1.80% and the yield on average earnings assets was 3.36%--a spread of 1.56%.
The analysts' forecast for fiscal year earnings (last up-dated 10/13/04)is $2.07. Earnings through the third quarter have been $1.57, needing just $.50 to make the forecast.
Dividends paid out or announced add up to $1.48, so there is a 9 cent leeway in reaching the 50 cents I sincerely hope for next quarter."
I have to say that this management team in place continues...to simply kick-ass in handling their portfolio. They have provided yet again further proof that they see changes in the macro, and exact excellent decisions in the micro. I am thoroughly impressed with their handling of the choppy seas.
They should all get raises, reasonable, but rewarding. This REIT is just so solid, and at these prices given valuations in the broader market, and returns in the bond alley...somewhat of an idiot's paradise. They are a talented crew who know what the heck they are DOING out there. It's gratifying to see given what goes for Talent on Main Street investment America...
A quick note...You can not directly relate the amount of per share earnings to the dividends declared. The tricky part is the earnings are based on 'average number of shares outstanding during a quarter'. The dividend is paid to all shares outstanding at the date of record. These two numbers are never the same. For example, during the 2nd quarter of 04, the average oustanding was 118.5 million. The dividend was paid to around 120.1 million shares.
The key metric you want to look at is the amount of retained earnings. At the end of the 3rd quarter, it was 9.3 million (about 7.5 cents per share). These are funds that management could disburse to shareholders without violating their pledge of never returning equity capital in the form of dividends.