IVR vs NLY: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
IVR and NLY are similarly sized, but IVR trades noticeably cheaper on forward earnings (3.87x vs 7.31x): the market is paying up for NLY's profile and pricing IVR more conservatively, or for faster growth. Which you prefer comes down to the drivers you believe, and whether adding either over-concentrates what you already own.
IVR 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 | IVR | NLY | What it tells you |
|---|---|---|---|
| Forward P/E | 3.87 | 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 | 4.69 | 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. |
| Price vs 52-week range | 13% 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 | 0.92 | 1.15 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: IVR is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how IVR 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. IVR 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 IVR 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 Invesco Mortgage Capital (IVR) do?
Invesco Mortgage Capital is a mortgage REIT externally managed by Invesco Advisers. Rather than owning physical property, it invests in mortgage-backed securities and related assets, with a portfolio heavily concentrated in agency residential MBS (as of mid-2026, agency MBS made up roughly 87% of investments, dominated by 30-year fixed-rate RMBS, with some agency CMOs and agency CMBS). It funds these holdings largely with short-term borrowing (repo) and uses leverage to boost returns, then hedges interest-rate exposure with instruments like swaps. Because it qualifies as a REIT, it distributes most of its taxable income to shareholders, which is why mortgage REITs like IVR typically carry very high dividend yields.
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.
IVR 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.
- IVR drivers: High dividend income; Agency MBS focus and credit quality.
- 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: The dominant risk is interest-rate and spread sensitivity: because IVR holds long-duration MBS funded with short-term borrowing and leverage, rising rates or widening mortgage spreads can sharply reduce book value per share, as seen in the 2026 decline. 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.
IVR or NLY: which should you pick?
IVR vs NLY: the full fundamentals
IVR. These figures are approximate and tied to the asOf date; verify live numbers before acting. Mortgage REITs like IVR are valued mainly on price relative to book value and on the sustainability of the dividend, not on P/E. A very high yield can signal that the market expects book-value erosion or a dividend cut, so judge IVR on interest-rate conditions, book-value trends, and distributable earnings rather than headline yield alone.
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, Jul 2026): IVR shows portfolio Agency MBS made up roughly 87% of investments in mid-2026, dominated by 30-year fixed-rate RMBS, book value Book value per share around $8 in Q1 2026, down from roughly $8.72 at the end of 2025, earnings Q1 2026 showed a net loss per share alongside positive earnings available for distribution near $0.55, dividend Switched to monthly dividends in January 2026, recently around $0.12 per share per month; very high yield; 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: IVR vs NLY
IVR 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 IVR and NLY exposure against your real portfolio. It is not an investment adviser.
Wondering how IVR 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 Invesco Mortgage Capital with AI
Connect the broker you already use and ask Walnut's AI how IVR 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 IVR and NLY?
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Invesco Mortgage Capital is a mortgage REIT externally managed by Invesco Advisers. 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 IVR or NLY the better stock?
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Neither is universally better; they suit different views and risk levels. 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, IVR or NLY?
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On forward P/E (as of August 2026), IVR trades at 3.87x and NLY at 7.31x, so IVR 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 IVR 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 IVR vs NLY?
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IVR: The dominant risk is interest-rate and spread sensitivity: because IVR holds long-duration MBS funded with short-term borrowing and leverage, rising rates or widening mortgage spreads can sharply reduce book value per share, as seen in the 2026 decline. Dividend risk is real, since the payout depends on distributable earnings and mortgage REITs, including IVR historically, have cut dividends when conditions deteriorate. Leverage magnifies both gains and losses and creates funding risk if repo markets tighten or margin calls rise. As an externally managed REIT, it pays management fees that can create conflicts and reduce shareholder returns. Prepayment risk (homeowners refinancing when rates fall) can erode MBS value, and the shares often trade around book value, so book-value erosion typically pressures the stock price directly. This is an income vehicle, not a capital-growth stock. 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 IVR or NLY; figures are approximate and dated (as of August 2026). Verify current data before investing.