NLY vs RITM: 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). RITM is the smaller challenger ($5.52B), cheaper on forward earnings (4.19x): 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.
NLY vs RITM: 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 | NLY | RITM | What it tells you |
|---|---|---|---|
| Market cap | $17.12B | $5.52B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 7.31 | 4.19 | 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 | 5.49 | 9.06 | 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 | 1.24 | 1.12 | 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 | 60% of range | 34% 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 | 1.15 | 0.80 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: RITM 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 NLY and RITM 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. NLY and RITM 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 NLY and RITM 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 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.
What does Rithm Capital Corp (RITM) do?
Rithm Capital Corp. (NYSE: RITM) is a global asset manager focused on real estate, credit, and financial services. It operates through several segments: Origination and Servicing (its Newrez and New Residential Mortgage subsidiaries), Residential Transitional Lending, Asset Management, an Investment Portfolio, and Commercial Real Estate. Newrez is the engine, with roughly $850 billion of servicing unpaid principal balance and about $15.5 billion of funded origination volume in the first quarter of 2026. The company internalized its external management function (previously run by an affiliate of Fortress Investment Group) in 2022, rebranding from New Residential Investment Corp. to Rithm Capital.
NLY vs RITM: 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.
- NLY drivers: Wide net interest spread and covered dividend; Diversification into residential credit and MSR.
- RITM drivers: Servicing and origination scale; Shift to fee-based asset management.
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 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. For RITM, rithm is highly sensitive to interest rates, which affect origination volumes, MSR valuations, and financing costs.
NLY or RITM: 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 NLY if you believe its drivers more; RITM 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 NLY and RITM guides.
NLY vs RITM: the full fundamentals
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.
RITM. Rithm traded around $9 for a market cap near $5 billion in mid-2026, a discount to its stated book value per share of about $12.51. Q1 2026 GAAP net income was roughly $68 million ($0.12 per diluted share), while earnings available for distribution, the metric income investors watch, was about $0.51 per share, comfortably covering the $0.25 quarterly dividend. Trading below book value is common for mortgage REITs and reflects rate and credit uncertainty.
Headline figures (approximate, JULY 2026): NLY shows market cap ~$16 billion, book value per share (q1 2026) ~$19.82, dividend yield ~13%, quarterly dividend (q2 2026) ~$0.75/share; RITM shows share price ~$9, market cap ~$5.0B, revenue (q1 2026) ~$1.4B, book value per share ~$12.51 (Mar 2026).
The bottom line: NLY vs RITM
NLY and RITM 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 NLY and RITM exposure against your real portfolio. It is not an investment adviser.
Wondering how NLY or RITM 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 Annaly Capital Management with AI
Connect the broker you already use and ask Walnut's AI how NLY 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 NLY and RITM?
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Annaly Capital Management is one of the largest and oldest mortgage real estate investment trusts (mREITs) in the United States. Rithm Capital Corp. 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 NLY or RITM the better stock?
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Neither is universally better. NLY is the larger incumbent; RITM is the smaller challenger and looks cheaper 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, NLY or RITM?
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On forward P/E (as of August 2026), NLY trades at 7.31x and RITM at 4.19x, so RITM 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 NLY and RITM?
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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 NLY vs RITM?
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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. RITM: Rithm is highly sensitive to interest rates, which affect origination volumes, MSR valuations, and financing costs. A sharp drop in rates can spur refinancing that reduces the value of the servicing book, while higher-for-longer rates pressure mortgage demand and profitability. Credit and housing exposure in its lending and commercial real estate segments could deteriorate in a downturn, and the office property holdings carry their own occupancy risk. As a leveraged, spread-and-fee business, book value per share (about $12.51 as of March 2026) can move with markets, and the large dividend is not guaranteed and can be adjusted. Its multi-segment structure also makes the business harder to value than a single-strategy REIT.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell NLY or RITM; figures are approximate and dated (as of August 2026). Verify current data before investing.