DX vs NLY: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
NLY is the larger of the two ($17.12B market cap): the incumbent the market prices for continued execution (7.31x forward earnings, beta 1.24). DX is the smaller challenger ($3.15B), priced similarly on forward earnings (8.11x): more room to run, but more to prove. The real question is which set of drivers you believe, and whether owning one (or both) leaves you over-concentrated.
DX vs NLY: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | DX | NLY | What it tells you |
|---|---|---|---|
| Market cap | $3.15B | $17.12B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 8.11 | 7.31 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 4.06 | 5.49 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 0.93 | 1.24 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 28% of range | 60% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 0.98 | 1.15 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Before you buy: how DX and NLY affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DX and NLY share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DX and NLY exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Dynex Capital (DX) do?
Dynex Capital, Inc. is a Virginia-based real estate investment trust that invests primarily in agency mortgage-backed securities (MBS) guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, along with related hedges. It borrows heavily in the repurchase (repo) market to buy these securities, earning the spread between the yield on its mortgage assets and its short-term funding costs, and it returns most of that income to shareholders as a monthly dividend. As of mid-2026 the company managed an MBS and TBA portfolio of roughly $24.8 billion against about $2.8 billion of equity, running adjusted leverage near 8.6x.
What does Annaly Capital Management (NLY) do?
Annaly Capital Management is one of the largest and oldest mortgage real estate investment trusts (mREITs) in the United States. It runs a roughly $107 billion investment portfolio, the bulk of which (about $92 billion as of Q1 2026) sits in highly liquid agency mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae, complemented by growing residential credit and mortgage servicing rights (MSR) sleeves. The business model is essentially a leveraged carry trade: Annaly funds long-dated mortgage assets with short-term repo borrowings, earns the spread between the two, hedges interest-rate exposure with swaps and other instruments, and distributes the profit as dividends under REIT rules.
DX vs NLY: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- DX drivers: Falling-rate and steepening-curve tailwind; Aggressive portfolio growth and capital raising.
- NLY drivers: Wide net interest spread and covered dividend; Diversification into residential credit and MSR.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Book value is highly sensitive to interest rates and mortgage-spread moves, and a widening in spreads produced a negative 2.5% economic return and an $83 million net loss to common shareholders in Q1 2026. For NLY, the dominant risk is interest-rate and spread volatility: a sharp move in rates or a widening of mortgage spreads can cut book value per share quickly, as seen historically when the stock and dividend both fell.
DX or NLY: which should you pick?
Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick DX if you believe its drivers more; NLY if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the DX and NLY guides.
DX vs NLY: the full fundamentals
DX. DX trades close to, and at times modestly above, its stated book value per share, which is typical for an agency mortgage REIT when the market expects spreads to earn attractive returns. Because REIT payout rules push most taxable income out as dividends, the eye-catching mid-teens yield reflects leverage and rate risk rather than a bargain valuation. Book value moved meaningfully quarter to quarter in 2026, so point-in-time price-to-book can shift quickly.
NLY. As of July 2026 NLY trades around $22-23 per share, a modest premium to its ~$19.82 Q1 2026 book value. Earnings available for distribution of ~$0.76 covered the dividend, and the net interest spread of ~1.42% (net interest margin ~1.71%) is the key metric to watch quarter to quarter. Trailing-twelve-month revenue was roughly $2.4 billion, but for a levered mortgage REIT book value per share and dividend coverage matter far more than a revenue multiple.
Headline figures (approximate, JULY 2026): DX shows market cap ~$2.8B, revenue (ttm) ~$304M, net income (ttm) ~$231M, book value / share (q1 2026) ~$12.60; NLY shows market cap ~$16 billion, book value per share (q1 2026) ~$19.82, dividend yield ~13%, quarterly dividend (q2 2026) ~$0.75/share.
The bottom line: DX vs NLY
DX and NLY are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DX and NLY exposure against your real portfolio. It is not an investment adviser.
Wondering how DX or NLY fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Dynex Capital with AI
Connect the broker you already use and ask Walnut's AI how DX fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between DX and NLY?
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Dynex Capital, Inc. Annaly Capital Management is one of the largest and oldest mortgage real estate investment trusts (mREITs) in the United States. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is DX or NLY the better stock?
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Neither is universally better. NLY is the larger incumbent; DX is the smaller challenger and looks pricier on forward earnings. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, DX or NLY?
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On forward P/E (as of August 2026), DX trades at 8.11x and NLY at 7.31x, so NLY is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both DX and NLY?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of DX vs NLY?
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DX: Book value is highly sensitive to interest rates and mortgage-spread moves, and a widening in spreads produced a negative 2.5% economic return and an $83 million net loss to common shareholders in Q1 2026. High leverage near 8.6x magnifies both gains and losses on the portfolio. The dividend is not guaranteed and can be cut if spread income or book value deteriorates, as has happened across the agency mortgage REIT sector historically. Frequent equity issuance can dilute existing shareholders, and rising short-term funding costs would compress the net interest margin. As a leveraged, rate-driven vehicle, DX can lose value even when its underlying agency securities carry no credit risk. NLY: The dominant risk is interest-rate and spread volatility: a sharp move in rates or a widening of mortgage spreads can cut book value per share quickly, as seen historically when the stock and dividend both fell. Annaly runs meaningful leverage funded with short-term repo, so a funding-market disruption or margin calls could force asset sales at bad prices. The dividend is not guaranteed and has been cut multiple times over the company's history when spreads compressed. Prepayment risk erodes the value of premium MBS when rates fall, while rising rates pressure book value; the position is difficult to win on both sides. Finally, the stock can trade at a premium or discount to book value, so investors face price risk on top of portfolio risk.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell DX or NLY; figures are approximate and dated (as of August 2026). Verify current data before investing.