Warren Buffett, former CEO of Berkshire Hathaway, popularized the term "moat" to describe a company with secure competitive advantages, as if it were protected by a moat around the proverbial castle.
Many of his stock picks over the years had this competitive moat. But one moat-protected stock that Buffett never owned is Standard & Poor's Global (SPGI +1.52%), and I'm not sure why -- it may be the best wide-moat stock in the financial sector.
Buffett does own S&P Global's major competitor, Moody's, and has for a long time, but I think SPGI is an even better stock, with multiple moats.
Image source: Getty Images.
Since 2016, when S&P Global spun off from McGraw-Hill, SPGI stock has had one negative year: 2022, when it fell 29%. But over that 10-year stretch, it has an average annualized return of about 14.5%, beating the benchmark it owns, the S&P 500. The stock price is down 17% year to date, but at its low valuation, it looks like a screaming buy.
Multiple moats S&P Global's primary moat is its credit ratings business, which is the leader in the space alongside Moody's. Combined, they own about 80% of the market share, while the rest is held by Fitch and a few smaller players.
This is not a business that is easily penetrated because of the regulatory hoops companies have to jump through, the costs and complexities involved, the trust that needs to be established, and the network effect because other companies rely on these ratings. Plus, there is only a need for a limited number of reputable ratings agencies; otherwise, the ratings could become watered down.
So this lucrative, asset-light business is not going anywhere, though it will fluctuate with the market and credit issuance. When credit issuance is high, this business will dominate, but when it is not, S&P has other durable businesses that can fill the void.
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The other moat is its indexing business, perhaps the one most associated with the company. S&P is the leading indexer through its various benchmarks, including the S&P 500. This is not its most lucrative business, but it is steady and has been growing, buoyed by huge assets in ETFs that track the S&P 500 and other indexes. In the first quarter of 2026, the indexing business was SPGI's fastest growing, with revenue up 17% year over year.
A solid buy The third major business is Market Intelligence, the biggest revenue driver, along with ratings. It is one of the market leaders, providing data, intelligence, analysis, and insights for institutions. It recently spun off its mobility/transportation data business to focus more on its core offerings.
The combination of the three major moat-protected segments provides SPGI with a balanced, durable revenue stream that allows the stock to navigate various market conditions, thereby ensuring its consistency. In Q1, SPGI saw revenue increase 10% year over year, while earnings rose 32%. For the full year, it anticipates revenue growth of 6.3% to 8.3%.
The stock is down 17% year to date, due to speculative fears of artificial intelligence (AI) disruption, among other issues. But the stock is as cheap as it's been in a while, trading at 21 times forward earnings. At this valuation, it is a no-brainer buy.
The Late-Stage Bull Market Is a Buying Opportunity for TechAutomatic Data Processing NASDAQ: ADP President and CEO Maria Black said the human capital management provider is seeing a “generally stable” but still muted labor environment, while positioning the company for what she described as a “defining moment” for the HCM industry.
Speaking with Tien-Tsin Huang, who covers payments processors and IT services at JPMorgan, Black said ADP’s data gives it a “front row seat” into labor, wage and employment trends, though she emphasized that the company is not in the business of predictive modeling.
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3 Large Cap Stocks Announce Big Buyback Boosts Amid +20% FallsBlack pointed to ADP’s guidance for roughly 1% “pays per control” growth, which she described as a same-store-style measure of the number of pays per company at ADP. She said the company was pleased to see an uptick in the second and third quarters, allowing it to raise that guide back to roughly 1%.
“I think our lens is that it’s a relatively muted environment. It’s relatively stable,” Black said.
ADP Sees Stable Labor Trends, Some Sector Strength 3 Stocks That Benefit if Companies Cut Costs in 2026Black discussed ADP’s National Employment Report and its newer weekly “National Employment Report Pulse,” or NERP. She said the weekly number was 42,250, while the April report was 109,000. She characterized the broader labor backdrop as a “low hire, low fire” environment.
On the technology sector, Black said IT is still adding jobs, citing 11,000 in February, 16,000 in March and 4,000 in April. She also said some areas, including trades and hospitality, are showing growth, while other sectors remain under more pressure.
Black Says AI Adds Complexity, Not Less Demand for HCM Black said the rise of artificial intelligence is changing jobs and tasks, but she argued it does not reduce the need for payroll, compliance and workforce management systems.
“As AI gets infused into work, we don’t see the need to manage people and payroll and the very functions of HCM to go away,” Black said. “We actually see them becoming even more important.”
She highlighted the complexity of payroll, saying it must be “100% accurate 100% of the time,” and noted that regulatory requirements continue to expand. Black cited areas such as data privacy, data lodgment, federal and state regulatory conflicts, and the EU Pay Transparency Directive.
Black also emphasized ADP’s role in what she called the “final mile” of payroll: connections with regulators, carriers, brokers and banking institutions. She said ADP communicates with “tens of thousands of entities” to complete payroll accurately.
Pricing, Retention and AI Monetization Huang noted that ADP’s recent key performance indicators, including net-positive pricing, retention and client satisfaction scores, appeared to counter some investor concerns about AI disruption. Black said ADP’s model is based on value-based pricing and investments that create productivity and efficiency for clients.
Black said ADP is guiding to 130 basis points of price this year, up from 100 basis points. She said clients continue to ask ADP to bring more value and are willing to pay for it when the value is clear.
Asked whether ADP will monetize AI tools separately or through its normal pricing cadence, Black said the answer is “both.” She said AI can support ADP’s recurring revenue model through more bookings, longer client relationships and referrals. She also said there could be opportunities for new revenue lines, pointing to benchmarking, analytics and employment verification as examples of how ADP has already monetized data-driven tools.
Bookings, Competition and Lyric Black said ADP was pleased with year-to-date bookings momentum and described third-quarter performance as broad-based. She cited international operations, Compliance Solutions, Retirement Services and Insurance Services as areas of strength. She said the company is entering the fourth quarter with “good momentum” and “solid pipelines.”
Black also discussed ADP’s investments in sales headcount, tools and technology, including “The Zone,” a proprietary platform designed to use AI in the sales process by serving up the right lead, seller and offer at the right time.
On competition, Black said ADP operates in a “highly competitive” space and monitors peers closely. However, she said she has not seen anything unusual in the competitive environment. She added that ADP is distinctive because it spans the full spectrum of customers, from very small businesses to global employers with as many as 1 million employees.
Black described ADP’s Lyric platform as a “TAM expander” into enterprise HR. She said Lyric is architected at the employee level and supports “dynamic teams,” multiple reporting managers and task-based work, which she said is becoming more important as AI changes work patterns. She said Lyric, combined with Global Payroll across 140 countries, Global Time and WorkForce Software, has changed ADP’s conversations with enterprise and multinational clients.
Product Roadmap, PEO and Capital Allocation Black said ADP Assist is the company’s overarching framework for AI offerings inside its platforms. She said ADP Assist is deployed across HCM domains including payroll, time, benefits, HR and tax. One cited example was ADP Assist for payroll, which she said is shaving 30 minutes off the payroll cycle for users.
Black also pointed to digital transformation in the down market, including implementation and onboarding automation. She said ADP now has line of sight to “almost entirely automate” some onboarding work.
On the company’s professional employer organization, or PEO, Black said secular demand remains strong, supported by complexity in labor management, regulation and rising healthcare costs. She said roughly 50% of new PEO clients come from ADP’s existing client base, though not every ADP client is a fit for the PEO model.
Black also addressed the RUN/Clover partnership with Fiserv, saying her enthusiasm “only continues to grow.” She said RUN has been placed into the Clover platform and CashFlow Central into the ADP platform, with sales motions aligned between the teams.
Regarding capital allocation, Black said ADP stepped up share repurchases through the end of 2026 and referenced the company’s 51st year of dividends, calling ADP a Dividend King. She said ADP remains open to acquisitions, citing the recent PEI acquisition in Mexico and the $1.2 billion acquisition of WorkForce Software nearly two years ago.
Black closed by emphasizing client trust as a central advantage for ADP as the company navigates technological, economic and workforce changes.
About Automatic Data Processing NASDAQ: ADPAutomatic Data Processing, Inc (ADP) is a global provider of cloud-based human capital management (HCM) and payroll solutions. Founded in 1949 and headquartered in Roseland, New Jersey, ADP began as a payroll processing company and has evolved into a diversified provider of workforce management, HR, benefits administration, tax and compliance services, and analytics for employers of all sizes.
ADP's product portfolio includes payroll processing and tax filing, time and attendance systems, benefits administration, talent management, and HR outsourcing.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Key Takeaways ADP expands its global HCM and outsourcing reach with cloud-based multi-country solutions.ADP strengthened its HCM suite through acquisitions, including WorkForce Software.Automatic Data Processing paid $2.4 billion in dividends during fiscal 2025. Shares of Automatic Data Processing, Inc. (ADP - Free Report) have had a decent run over the past month. The stock has gained 9.5% against the 6.5% decline of the industry. The Zacks S&P 500 composite has gained 3.7% during the said time frame.
The company’s fourth-quarter fiscal 2026 earnings are expected to increase 14.6% year over year. Its 2026 and 2027 earnings are projected to rise 10.6% and 9.3%, respectively. Revenues are anticipated to grow 6.6% in 2026 and 5.5% in 2027.
Factors That Bode Well for ADPAutomatic Data Processing benefits from its three-tier business strategy, enabling it to sustain and strengthen its position as a leading Human Capital Management (HCM) technology and services provider. The company delivers a complete suite of cloud-based HCM and Human Resource Outsourcing (HRO) solutions. ADP is expanding its international HCM and HRO businesses with established local, in-country software and cloud-based multi-country solutions to broaden its presence across diverse markets.
The company also pursues buyouts as a driver for its overall growth. Acquisitions such as Celergo, WorkMarket, Global Cash Card and The Marcus Buckingham Company have enhanced ADP’s global capabilities, diversified its offerings and strengthened its competitive positioning. The recent acquisition of WorkForce Software has improved the company’s HCM solutions suite.
ADP continues to reward shareholders through consistent dividend payments and share repurchases. In fiscal 2025, 2024, 2023 and 2022, the company paid out $2.4 billion, $2.2 billion, $1.9 billion and $1.7 billion in dividends, respectively. Such moves indicate the company’s commitment to returning value to shareholders and underscore its confidence in its business.
ADP's current ratio (a measure of liquidity) at the end of the third-quarter fiscal 2026 was 1.04, lower than the industry average of 1.93. However, a current ratio of more than 1 often indicates that the company will be able to easily pay off its short-term obligations.
Risks to WatchADP faces significant competition in each of its product lines. Both its Employer Services and Professional Employer Organization Services segments compete with other independent business outsourcing companies in most of their operating regions. The company has observed a few negative impacts on its retention rate due to the rising competition and migration from the legacy business.
The outsourcing industry is labor-intensive and heavily dependent on foreign talent. Surging talent costs amid intensifying competition could limit the company’s ability to continue investing in technology and talent while balancing growth initiatives with profitability.
ADP’s Zacks Rank & Stocks to ConsiderAutomatic Data Processing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks from the broader Zacks Computer and Technology sector are Cisco Systems (CSCO - Free Report) and Dell Technologies (DELL - Free Report) .
Cisco Systems carries a Zacks Rank of 2 (Buy) at present. It has a long-term (next five years) earnings growth expectation of 9.6%.
CSCO delivered a trailing four-quarter earnings surprise of 2%, on average.
Dell Technologies has a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 22.3%.
DELL beat the Zacks Consensus Estimate in three of the last four reported quarters and missed once, with an average earnings surprise of 1.2%.
On May 26, 2026, Automatic Data Processing Inc ADP shares fell 3.1% to a current price of $218.35. This decline comes amid a 52-week trading range of $188.16 to $329.93. The stock has seen significant fluctuations, with a year-to-date drop of 14.4% and a one-year decline of 30.3%.
GF Value™ verdict: The current price of $218.35 is 27.7% below the GF Value™ estimate of $301.91, indicating the stock is undervalued.GF Score™: With a score of 87/100, ADP is rated as strong, suggesting solid long-term performance potential.Most notable signal: Insiders have recently bought $0.7 million worth of shares while selling $0.4 million, indicating a net positive sentiment among management. Is ADP Overvalued or Undervalued? Currently, ADP's stock price of $218.35 is significantly lower than the GF Value™ of $301.91, which suggests that the stock is undervalued by approximately 27.7%. This margin of safety can be appealing for potential investors, as it indicates room for upside should the market correct itself. The GF Valuation label identifies ADP as "Modestly Undervalued," suggesting that while there is an opportunity for appreciation, it may not be without risks. Investors should consider the overall market conditions and the company's fundamentals before making decisions based solely on valuation metrics.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given the current price is well below the GF Value™, it presents a potential opportunity for those looking to invest in stocks with strong fundamentals.
How Does ADP's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 20.4x 30.4x Forward P/E 17.9x - ADP's current P/E ratio of 20.4x is significantly below its 5-year median P/E of 30.4x, indicating that the stock is trading at a valuation much lower than its historical average. The forward P/E of 17.9x further suggests a potential for future price appreciation. This P/E analysis aligns with the GF Value™ verdict, reinforcing the conclusion that the stock is undervalued compared to its historical valuation metrics.
What Does ADP's GF Score™ Tell Us? Metric Rating GF Score™ 87/100 Financial Strength 6/10 Profitability 9/10 Growth 10/10 Valuation 8/10 Momentum 2/10 The GF Score™ of 87/100 indicates that ADP is positioned favorably in terms of potential long-term returns. The strongest areas are Growth, with a perfect score of 10/10, and Profitability, which scores 9/10, suggesting robust operational efficiency and potential for future earnings growth. However, the Momentum rank of 2/10 highlights recent weaknesses in price performance, which may raise concerns for short-term investors.
What Are Insiders Doing with ADP Stock? In the past three months, insider activity at ADP has shown a slight positive trend, with insiders purchasing $0.7 million worth of shares while simultaneously selling $0.4 million. This net buying activity can be seen as a positive signal, indicating that those with the most insight into the company believe the stock is undervalued at current levels. This could suggest a level of confidence in the company's future performance.
What This Means for Investors Based on the GF Value™ analysis, Automatic Data Processing Inc ADP is currently undervalued, presenting a potential opportunity for long-term investors. However, it is essential to consider the broader market context and the company's fundamentals in conjunction with this valuation assessment.
For the complete analysis, visit the Automatic Data Processing Inc ADP stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is ADP's GF Score™?
ADP's GF Score™ is 87/100, indicating that it is rated as strong and has potential for higher long-term returns based on historical performance.
Is ADP overvalued or undervalued?
ADP is considered undervalued, with its current price being 27.7% below the GF Value™ estimate, suggesting potential for price appreciation.
What is ADP's P/E ratio?
ADP's current P/E ratio is 20.4x, which is significantly below its 5-year median P/E of 30.4x, indicating that the stock is trading at a lower valuation compared to its historical averages.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
On May 27, 2026, we delve into the DCF analysis for Automatic Data Processing Inc ADP , a company currently facing mixed price performance with a year-to-date decline of 14.4% and a significant drop of 30.3% over the past year. Below are key highlights from our analysis:
DCF Earnings-based intrinsic value of $214.16 compared to the current price of $218.35 (margin of safety: -2.0%) DCF Free Cash Flow (FCF)-based intrinsic value of $226.17, providing a second opinion on valuation GF Score™ of 87/100 indicates a high reliability of the DCF inputs What Is ADP Worth? DCF Earnings-Based Model To determine the intrinsic value of ADP using a Discounted Cash Flow (DCF) model, we apply a two-stage approach. The first stage accounts for a high growth period over the next ten years, while the second stage estimates the terminal value based on a more stable growth rate. Below are the assumptions used in our DCF model:
Parameter Value Current EPS (TTM, excl. non-recurring) $10.74 10-Year Growth Rate 13.3% 10-Year Treasury Rate 4.47% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the first stage, we project EPS growth at 13.3% annually for ten years, discounted at a rate of 11%. The calculated value for this growth stage is $120.41 per share. In the second stage, we apply a terminal growth rate of 4% for an additional ten years, which results in a terminal stage value of $93.75 per share. The summary of our calculations is as follows:
Stage Description Value Growth Stage (Years 1-10) EPS growing at 13.3%, discounted at 11% $120.41 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $93.75 Intrinsic Value Growth + Terminal $214.16 With the current price at $218.35, our intrinsic value of $214.16 indicates that ADP is fairly valued, with a margin of safety of -2.0%. It is important to note that GuruFocus uses EPS excluding non-recurring items, as research shows stock prices correlate more closely with earnings than with free cash flow. For further details, visit the ADP DCF Calculator.
What Does the Free Cash Flow DCF Say? In addition to the earnings-based DCF model, we also evaluated ADP using a Free Cash Flow (FCF)-based DCF model. The intrinsic value derived from the FCF analysis is $226.17. This value provides a second perspective on ADP's valuation, and when compared with the earnings-based intrinsic value of $214.16, we see a slight divergence. However, both models suggest that ADP is fairly valued, with the FCF model indicating a margin of safety of 3.5%.
How Does GF Value™ Compare to the DCF Models? According to GuruFocus, the GF Value™ for ADP is $301.91, indicating that the stock is 27.7% undervalued based on this proprietary measure. GF Value™ is calculated from historical trading multiples, past business growth, and future performance estimates. While the DCF models suggest that ADP is fairly valued, the GF Value™ presents a more optimistic view, suggesting that all three valuation methods (DCF earnings, DCF FCF, and GF Value™) provide differing perspectives on ADP's valuation. For more information, visit the GF Value™ page.
What Does ADP's GF Score™ Tell Us? The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested from 2006 to 2021). Below is a summary of ADP's GF Score™ metrics:
Metric Rating GF Score™ 87/100 Financial Strength 6/10 Profitability 9/10 Growth 10/10 Valuation 8/10 Momentum 2/10 With a predictability rank of 4/5 stars, this indicates that the DCF model is more reliable for ADP. For more details, visit the ADP stock page.
Key Assumptions and Limitations It is important to recognize that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Additionally, stocks with low predictability ratings tend to produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not fully capture the complexities of future growth.
What This Means for Investors In summary, the three valuation models—DCF earnings, DCF FCF, and GF Value™—provide a comprehensive view of ADP's valuation. While the DCF earnings model suggests a fair valuation, the FCF model indicates a slight undervaluation, and the GF Value™ suggests that ADP may be undervalued based on historical performance metrics. Overall, ADP appears to be fairly valued based on the DCF analysis, but the GF Value™ presents a more favorable outlook. For the full DCF analysis, visit the ADP DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is ADP's intrinsic value based on DCF?
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
, /PRNewswire/ -- For the four weeks ending May 9, 2026, U.S. private employers added an average of 35,750 jobs per week, according to the NER Pulse, a weekly update of the monthly ADP National Employment Report (NER).
Hiring slowed from the previous week. These numbers are preliminary and could change as new data is added.
The NER Pulse is an estimate of the week-over-week change in employment based on a four-week moving average. These estimates are based on ADP's finely tuned, high-frequency data. The data is seasonally adjusted and have a two-week lag to allow for more complete and accurate estimates of real-time employment trends.
The NER Pulse, including 12 weeks of historical data, publishes every Tuesday at 8:15 a.m. ET, except weeks when ADP Research publishes the monthly National Employment Report which is built on a reference week that includes the 12th day of the month. The press release is available Tuesdays at 8:15 a.m. ET in the ADP Media Center. The NER Pulse is also available shortly after 8:15 a.m. ET on release days at ADP Research and in Main Street Macro.
The next NER Pulse will be released June 9, 2026. For upcoming release dates please refer to the calendar on the NER website.
The ADP National Employment Report and the NER Pulse are produced by ADP Research in collaboration with the Stanford Digital Economy Lab.
About ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policy makers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.
To subscribe to monthly email alerts or obtain additional information about ADP Research, including employment and pay data, methodology, and a calendar of release dates, please visit https://www.adpresearch.com.
About ADP (NASDAQ: ADP)
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people. We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com.
ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, and ADP Research are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.
A month has gone by since the last earnings report for Automatic Data Processing (ADP - Free Report) . Shares have added about 3.7% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is ADP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
ADP's Q3 Earnings Beat EstimatesAutomatic Data Processing posted third-quarter fiscal 2026 adjusted earnings per share of $3.37, beating the Zacks Consensus Estimate of $3.28 by 2.7%. The metric increased 10.1% from the year-ago quarter.
Total revenues came in at $5.94 billion, topping the consensus mark of $5.86 billion by 1.4% and rising 7% year over year. Operationally, Employer Services client revenue retention and overall client satisfaction reached record highs for the third quarter.
ADP Posts Broad-Based Top-Line GrowthADP’s revenue performance reflected gains across its two operating segments. Employer Services revenues increased 7% year over year to $4.04 billion, whereas PEO Services revenues rose 7% to $1.91 billion.
Client funds tailwinds also remained supportive. Interest on funds held for clients increased 14% year over year to $403.9 million, driven by average client funds balances that rose 9% to $48.3 billion and an average yield of 3.3%, up 10 basis points.
Automatic Data Processing Sees Employer Services LiftEmployer Services continued to be a key growth engine in the quarter. Management cited solid business booking growth, while retention and client satisfaction set record highs for the third quarter.
Profitability improved meaningfully in the segment. Employer Services’ margin expanded 130 basis points year over year, with ADP pointing to operational productivity improvements alongside growth in client funds interest revenues as notable contributors.
ADP’s PEO Segment Mix Weighs on MarginPEO Services turned in another quarter of revenue expansion, but profitability moved the other way. Segment margin declined 120 basis points year over year, reflecting a combination of business mix and cost items within the segment.
ADP noted that zero-margin benefits pass-through growth was a key factor behind the margin pressure. Higher state unemployment insurance costs and higher selling expenses also contributed. On an operating metric basis, average worksite employees increased 2% year over year to about 762,000.
Automatic Data Processing Expands Adjusted Operating ProfitADP converted its revenue growth into higher operating profit. Adjusted EBIT increased 10% year over year to $1.79 billion and the adjusted EBIT margin improved to 30.2%, representing an 80-basis-point expansion.
Below the operating line, ADP’s effective tax rate for the quarter was 23.7% on both a reported and adjusted basis. On a GAAP basis, net earnings increased 9% year over year to $1.36 billion, while diluted earnings per share rose 10% to $3.38.
ADP’s Balance Sheet Shows Higher Client Fund LevelsAutomatic Data Processing ended March 31, 2026, with cash and cash equivalents of $3.23 billion. Funds held for clients totaled $46.41 billion, matched by client funds obligations of $46.77 billion, underscoring the scale of client funds activity in the quarter.
On leverage, long-term debt stood at $3.98 billion. Through the first nine months of fiscal 2026, ADP generated $4.01 billion in cash from operating activities. Capital returns remained sizable, with $1.46 billion used for share repurchases and $1.94 billion paid out in dividends over the same nine months.
Automatic Data Processing Raises FY26 OutlookADP raised its fiscal 2026 outlook following the quarter’s results. The company expects total revenue growth of 6-7% and an adjusted EBIT margin expansion of 70-80 basis points. It also lifted its adjusted diluted earnings per share growth view to 10-11%.
Within the outlook, ADP updated expectations for client funds contribution, projecting interest on funds held for clients of $1.340 billion to $1.350 billion, and total contribution from the client funds extended investment strategy of $1.300 billion to $1.310 billion. Strategically, ADP highlighted continued investment in AI across products and service delivery, including further deployment of ADP Assist agents and an expanded agentic AI ecosystem through ADP Marketplace, alongside scaling GenAI capabilities across service operations via “The Zone.”
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates review.
VGM ScoresCurrently, ADP has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, ADP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerADP belongs to the Zacks Internet - Software industry. Another stock from the same industry, F5 Networks (FFIV - Free Report) , has gained 18.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
F5 reported revenues of $811.7 million in the last reported quarter, representing a year-over-year change of +11%. EPS of $3.90 for the same period compares with $3.42 a year ago.
F5 is expected to post earnings of $3.98 per share for the current quarter, representing a year-over-year change of -4.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.9%.
F5 has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
Throughout the first quarter of the year, the tech sector was a laggard as fears of an artificial intelligence (AI) bubble carried over from the selloff that began in October 2025.
But since the start of the second quarter, that corner of the market has rallied—so much so that it has now overtaken energy as the best performer among the S&P 500’s 11 sectors in 2026.
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But within tech, there has been one notable omission from the rally: software. As fears over AI’s encroachment on the industry linger, beaten-down stocks operating in that space have amassed some of the worst year-to-date (YTD) losses across the market.
However, management at some software companies are viewing these corrections as a golden opportunity to take advantage of undervalued shares, signaling that they believe the market has mispriced their stocks.
For the following three companies, that is evidenced through enormous share repurchase authorizations that could prove to be prudent decisions in the long term.
Salesforce Announces Its Largest-Ever Stock BuybackSalesforce Today
$166.07 -0.38 (-0.23%)
As of 03:59 PM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$161.40▼
$276.80Dividend Yield1.06%
P/E Ratio19.22
Price Target$259.26
Authorized stock buybacks allow—but do not require—companies to repurchase their own stock. Regardless, San Francisco-based Salesforce NYSE: CRM is going all in.
The cloud software company, which focuses on customer relationship management and enterprise applications, announced a share repurchase program on March 16, the largest in its history.
The $25 billion accelerated stock buyback plan accounts for more than 14% of CRM’s shares outstanding.
According to the company’s press release, the plan calls for the repurchase of 103 million shares and “represents the immediate execution of half of the $50 billion aggregate Share Repurchase Program authorized by Salesforce’s Board of Directors in February 2026.”
Those 103 million shares account for approximately 80% of the total shares that the company anticipates repurchasing. From its Jan. 7 YTD high, CRM fell by more than 38% before hitting its YTD low on April 10. Since then, the stock has gained a modest 9.1%.
Of the 39 analysts currently covering Salesforce, 26 have assigned it a Buy rating. Overall, it receives a consensus Moderate Buy rating with an average 12-month price target that implies around 35% potential upside.
Adobe’s Repurchase Plan Aims to Take Advantage of a 5-Year LullAdobe Today
$204.02 -14.78 (-6.76%)
As of 04:00 PM Eastern
52-Week Range$196.90▼
$405.00P/E Ratio11.88
Price Target$285.73
On April 21, San Jose-based Adobe NYSE: ADBE announced a $25 billion stock repurchase authorization that will account for nearly 25% of the company’s shares outstanding.
According to a company press release, Adobe is aiming to return value to shareholders while minimizing dilution.
The plan is a “direct expression of confidence in [Adobe’s] robust cash flow and…long-term value,” says Dan Durn, executive vice president and CFO.
Shareholders are hoping the plan can serve as a shot in the arm for the sluggish stock. After posting a four-year average annual revenue growth rate of 21.31% from 2018 to 2021, Adobe has seen that metric fall to an average of just 10.77% over the past four years.
That resulted in a dramatic drop-off in the company’s net change in cash and equivalents, which fell from $472 million in 2024 to -$2.2 billion in 2025. Still, Adobe has beat earnings expectations for 13 consecutive quarters, and 15 of the last 17 dating back to Q1 FY2022.
But investors have had to endure some pain. Shares of ADBE have dropped around 28% YTD, about 40% over the past year, and more than 50% over the past five years. The stock is virtually flat since the company announced its share repurchase program, but based on analysts’ average 12-month price target, it could see approximately 35% potential upside.
Despite Its Impressive Earnings Streak, ADP Has Yet to Turn a CornerAutomatic Data Processing Today
ADP
Automatic Data Processing
$226.21 +0.44 (+0.19%)
As of 04:00 PM Eastern
52-Week Range$188.16▼
$315.98Dividend Yield3.01%
P/E Ratio21.10
Price Target$244.29
While a $6 billion share repurchase authorization may pale in comparison to the $25 billion announcements of the other two stocks on this list, New Jersey-based Automatic Data Processing NASDAQ: ADP plans to buy back 403 million common shares, or nearly 6% of the company’s shares outstanding.
Since ADP—which provides payroll processing, workforce management, HR, benefits administration, tax, and compliance services software—announced the program on Jan. 14, the stock went on to lose nearly 27% before hitting its YTD low on April 10. Since then, the stock has rallied more than 16%.
That has been welcome news to investors who saw revenue growth fall from a four-year high of nearly 10% in 2022 to just over 7% in 2025. Still, ADP has managed to beat earnings expectations for an impressive 24 consecutive quarters dating back to Q4 FY2020, and 34 out of 35 quarters dating back to Q4 FY2017.
Analysts are maintaining a tepid outlook, though, with the stock receiving a consensus Hold rating and a 12-month price target that implies around 13% potential upside.
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Automatic Data Processing is a US-based global technology company providing cloud-based enterprise human resources management software and services. ADP improved its revenue from $11.7 billion in FY 2016 to $20.6 billion in FY 2025. That's a compound annual growth rate of 6.5%. ADP has a stellar financial position. Its long-term debt/equity ratio is 0.6, while the interest coverage ratio is right around 13.
, /PRNewswire/ -- Private sector employment increased by 122,000 jobs in May and pay was up 4.4 percent year-over-year according to the May ADP National Employment Report® produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab").
ADP Research The ADP National Employment Report is an independent measure of the labor market based on the anonymized weekly payroll data of more than 26 million private-sector employees in the United States. ADP's Pay Insights captures over 15 million individual pay change observations each month. Together, the jobs report and pay insights use ADP's fine-grained data to provide a representative and highfrequency picture of the private-sector labor market.
"Hiring was more broad-based in May than we've seen in the last few years," said Dr. Nela Richardson, chief economist, ADP. "The labor market continues to show sustained momentum going into the summer hiring season."
May 2026 Report Highlights
View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.
JOBS REPORT
Private employers added 122,000 jobs in May
Eight out of 10 supersectors showed gains last month, and employers of all sizes were hiring.
Change in U.S. Private Employment: 122,000
Change by Industry
- Goods-producing: 8,000
Natural resources/mining -3,000 Construction 8,000 Manufacturing 3,000 - Service-providing: 114,000
Trade/transportation/utilities 36,000 Information -9,000 Financial activities 7,000 Professional/business services 11,000 Education/health services 57,000 Leisure/hospitality 8,000 Other services 4,000 Change by U.S. Regions
- Northeast: 35,000
New England 18,000 Mid-Atlantic 17,000 - Midwest: 21,000
East North Central 13,000 West North Central 8,000 - South: 23,000
South Atlantic -12,000 East South Central 14,000 West South Central 21,000 - West: 45,000
Mountain 20,000 Pacific 25,000 Change by Establishment Size
- Small establishments: 67,000
1-19 employees 49,000 20-49 employees 18,000 - Medium establishments: 17,000
50-249 employees 10,000 250-499 employees 7,000 - Large establishments: 40,000
500+ employees 40,000 PAY INSIGHTS
Pay for job-stayers rose 4.4 percent in May
Year-over-year pay growth for job-stayers was steady at 4.4 percent. For job-changers, the pace of growth slowed slightly, to 6.5 percent from 6.6 percent in April.
Median Change in Annual Pay
- Job-stayers 4.4%
- Job-changers 6.5%
Median Change in Annual Pay for Job-Stayers by Industry
- Goods-producing:
Natural resources/mining 4.2% Construction 4.5% Manufacturing 4.8% - Service-providing:
Trade/transportation/utilities 4.4% Information 4.0% Financial activities 5.1% Professional/business services 4.1% Education/health services 4.2% Leisure/hospitality 4.5% Other services 4.1% Median Change in Annual Pay for Job-Stayers by Firm Size
- Small firms:
1-19 employees 2.5% 20-49 employees 4.1% - Medium firms:
50-249 employees 4.7% 250-499 employees 4.8% - Large firms:
500+ employees 4.8% To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:
The April total number of jobs added was revised from 109,000 to 105,000.
For additional information about the ADP National Employment Report, including historical files, employment and pay data, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.
The June 2026 ADP National Employment Report will be released on July 1, 2026 at 8:15 a.m. ET.
About ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policy makers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.
To subscribe to monthly email alerts or obtain additional information about ADP Research, including employment and pay data, methodology, and a calendar of release dates, please visit https://www.adpresearch.com.
About ADP (NASDAQ: ADP)
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people. We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com
ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, and ADP Research are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.
(Kitco News) - The gold market could see renewed selling pressure as the U.S. labor market remains resilient, with the private sector creating slightly more jobs than expected in May.
According to some analysts, the healthy labor market will force the Federal Reserve to pay more attention to the ongoing inflation threat.
Private-sector payroll processor ADP said Wednesday that 122,000 jobs were created in May, up from 109,000 jobs in April. The data came in slightly better than expected, as consensus estimates had forecast a reading of 118,000.
"Hiring was more broad-based in May than we've seen in the last few years," said Dr. Nela Richardson, chief economist at ADP. "The labor market continues to show sustained momentum going into the summer hiring season."
The report said that eight out of 10 supersectors posted gains last month and that employers of all sizes were hiring.
Expectations that the Federal Reserve will have to raise interest rates by the end of the year continue to pressure the gold market, with prices struggling below $4,500 an ounce. Spot gold last traded at $4,460.40 an ounce, down 0.60% on the day.
Along with the solid headline number, the report noted relatively steady wage inflation. Wages for workers who stayed in their jobs rose 4.4% annually last month, unchanged from April. At the same time, workers who changed jobs saw their annual wage increase 6.5%, down slightly from 6.6% in April.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
, /PRNewswire/ -- Private sector employment increased by 122,000 jobs in May and pay was up 4.4 percent year-over-year according to the MayADP National Employment Report®produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab").
The ADP National Employment Report is an independent measure of the labor market based on the anonymized weekly payroll data of more than 26 million private-sector employees in the United States. ADP's Pay Insights captures over 15 million individual pay change observations each month. Together, the jobs report and pay insights use ADP's fine-grained data to provide a representative and highfrequency picture of the private-sector labor market.
"Hiring was more broad-based in May than we've seen in the last few years," said Dr. Nela Richardson, chief economist, ADP. "The labor market continues to show sustained momentum going into the summer hiring season."
May 2026 Report Highlights
View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.
JOBS REPORT
Private employers added 122,000 jobs in May
Eight out of 10 supersectors showed gains last month, and employers of all sizes were hiring.
Change in U.S. Private Employment: 122,000
Change by Industry
- Goods-producing: 8,000
Natural resources/mining -3,000 Construction 8,000 Manufacturing 3,000- Service-providing: 114,000
Trade/transportation/utilities 36,000 Information -9,000 Financial activities 7,000 Professional/business services 11,000 Education/health services 57,000 Leisure/hospitality 8,000 Other services 4,000 Change by U.S. Regions
- Northeast: 35,000
New England 18,000 Mid-Atlantic 17,000 - Midwest: 21,000
East North Central 13,000 West North Central 8,000 - South: 23,000
South Atlantic -12,000 East South Central 14,000 West South Central 21,000 - West: 45,000
Mountain 20,000 Pacific 25,000 Change by Establishment Size
- Small establishments: 67,000
1-19 employees 49,000 20-49 employees 18,000 - Medium establishments: 17,000
50-249 employees 10,000 250-499 employees 7,000 - Large establishments: 40,000
500+ employees 40,000 PAY INSIGHTS
Pay for job-stayers rose 4.4 percent in May
Year-over-year pay growth for job-stayers was steady at 4.4 percent. For job-changers, the pace of growth slowed slightly, to 6.5 percent from 6.6 percent in April.
Median Change in Annual Pay
- Job-stayers 4.4%
- Job-changers 6.5%
Median Change in Annual Pay for Job-Stayers by Industry
- Goods-producing:
Natural resources/mining 4.2% Construction 4.5% Manufacturing 4.8%- Service-providing:
Trade/transportation/utilities 4.4%Information 4.0%Financial activities 5.1%Professional/business services 4.1%Education/health services 4.2%Leisure/hospitality 4.5%Other services 4.1%Median Change in Annual Pay for Job-Stayers by Firm Size
- Small firms:
1-19 employees 2.5%20-49 employees 4.1%- Medium firms:
50-249 employees 4.7%250-499 employees 4.8%- Large firms:
500+ employees 4.8%To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:
The April total number of jobs added was revised from 109,000 to 105,000.
For additional information about the ADP National Employment Report, including historical files, employment and pay data, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.
The June 2026 ADP National Employment Report will be released on July 1, 2026 at 8:15 a.m. ET.
About ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policy makers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.
To subscribe to monthly email alerts or obtain additional information about ADP Research, including employment and pay data, methodology, and a calendar of release dates, please visit https://www.adpresearch.com.
About ADP (NASDAQ: ADP)
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people. We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com
ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, and ADP Research are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.
View original content to download multimedia:https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-122-000-jobs-in-may-annual-pay-was-up-4-4-302790127.html
Key Takeaways ADP Posts Highest Private-Sector Jobs Since January 2025JOLTS Yesterday Saw a Spike in Job Openings for AprilMacy's & Medtronic Beat on Earnings; AVGO, CRWD & PVH Later Wednesday, June 3rd, 2026
Jobs Week Coming Up Roses So Far: JOLTS, ADP
Don’t look now, but the labor market in the U.S. has demonstrably improved. Where we had been at historic lows on job openings and under water on private-sector payrolls roughly a year ago, we’re now seeing monthly highs that go back prior to the second Trump administration.
Yesterday’s Job Openings and Labor Turnover Survey (JOLTS) report for April spiked to 7.6 job openings, up from 6.88 million expected and the 6.89 million reported. This is the highest monthly tally since November of 2024, after two downward-moving months. Job Quits quieted to 3.0 million in the month.
The biggest change between March and April was in the near-million-job swing among Professional/Business Services positions, which went from -318K in the former month to +668K in the latter. In March, only the Northeast region gained in job opportunities; for April, only the Midwest did not show a gain in new job openings.
Automatic Data Processing (ADP - Free Report) released its monthly private-sector payroll report this morning for May, posting +122K new jobs filled outside the government sector — the strongest month for this metric since January of 2025. It improves above the +117K consensus estimate and the downwardly revised +105K for April.
Small businesses bounced back in a big way: +67K new private-sector jobs were gained at firms of fewer than 50 employees. Large companies (over 500 employees) grew by +40K, and medium-sized businesses added +17K. Unsurprisingly, Education/Healthcare led by industry, +57K, followed by renewed strength in Trade/Transportation/Utilities at +36K, +11K at Professional/Business consulting, and +8K in Construction. This last may speak to the spreading out of AI investment to material parts of the economy — the building out of data centers includes plenty of construction work.
“Hiring has been more broad-based,” ADP Chief Economist Nela Richardson said, which bears out these findings. Meanwhile, wage gains in the private sector have been a non-factor: those who stayed in their current jobs made +4.4% more on average, whereas jobs changers averaged +6.6%. This remains a very narrow bar in the relatively short time ADP has kept this metric.
Q1 Earnings at a Glance: M, MDT & More to Come
Retail companies wrap up Q1 earnings season this morning, with department store major Macy’s (M - Free Report) reporting its most impressive quarter in years: earnings of $0.13 per share trounced the +$0.02 expected, for a positive earnings surprise of +550%. Revenues also outpaced estimates, but by a more modest +1.28%. Raised guidance helped sentiment, and shares are up around +1% in today’s pre-market. For more on M’s earnings, click here.
Medtronic (MDT - Free Report) , the world’s largest medical device company, also beat estimates this morning, for its fiscal Q4. Earnings of $1.55 per share improved over the Zacks consensus by a penny, on revenues of $9.81 billion — its highest growth in a decade — and above expectations by +1.48%. Shares are up +4% at this hour of the pre-market, but still down nearly -20% year to date. For more on MDT’s earnings, click here.
After today’s close, the earnings parade sweeps up some of its final noteworthy reporters. These include semiconductor giant Broadcom (AVGO - Free Report) , cybersecurity major CrowdStrike (CRWD - Free Report) and Calvin Klein/Tommy Hilfiger parent PVH (PVH - Free Report) .
Questions or comments about this article and/or author? Click here>>
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, /PRNewswire/ -- For the four weeks ending May 23, 2026, U.S. private employers added an average of 29,000 jobs per week, according to the NER Pulse, a weekly update of the monthly ADP National Employment Report (NER).
Employment growth eased for the third consecutive week. These numbers are preliminary and could change as new data is added.
ADP Research Week ending
Change
(Four-week moving
average, seasonally
adjusted)
5/23/2026
29,000
5/16/2026
30,500
5/9/2026
35,750
5/2/2026
40,750
4/25/2026
33,000
4/18/2026
30,250
4/11/2026
39,250
4/4/2026
40,250
3/28/2026
40,250
3/21/2026
26,000
3/14/2026
15,250
3/7/2026
10,000
The NER Pulse is an estimate of the week-over-week change in employment based on a four-week moving average. These estimates are based on ADP's finely tuned, high-frequency data. The data is seasonally adjusted and have a two-week lag to allow for more complete and accurate estimates of real-time employment trends.
The NER Pulse, including 12 weeks of historical data, publishes every Tuesday at 8:15 a.m. ET, except weeks when ADP Research publishes the monthly National Employment Report which is built on a reference week that includes the 12th day of the month. The press release is available Tuesdays at 8:15 a.m. ET in the ADP Media Center. The NER Pulse is also available shortly after 8:15 a.m. ET on release days at ADP Research and in Main Street Macro.
The next NER Pulse will be released June 16, 2026. For upcoming release dates please refer to the calendar on the NER website.
The ADP National Employment Report and the NER Pulse are produced by ADP Research in collaboration with the Stanford Digital Economy Lab.
About ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policy makers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.
To subscribe to monthly email alerts or obtain additional information about ADP Research, including employment and pay data, methodology, and a calendar of release dates, please visit https://www.adpresearch.com.
About ADP (NASDAQ: ADP)
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people. We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com.
ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, and ADP Research are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.
ToplineStrategy on Monday disclosed a bitcoin purchase valued at more than $100 million, after billionaire Michael Saylor’s firm—the world’s largest institutional holder of bitcoin—announced a rare sale of the cryptocurrency amid a broad drop in the world’s most valuable digital asset.
Bitcoin’s price recently dropped under $60,000 for the first time since 2024.
Getty Images for Bitcoin Magazine
Key FactsStrategy, in a Securities and Exchange Commission filing on Monday, disclosed it purchased 1,550 bitcoin for $101.3 million last week at an average price of $65,332 per coin, which it funded through $181 million in stock sales.
The announcement comes roughly a week after Strategy disclosed the sale of 32 bitcoins to raise about $2.5 million to pay dividends to stockholders, the company’s second such sale and its first since December 2022, amplifying bearish sentiment for the crypto market as bitcoin’s value fell below $60,000 for the first time since October 2024.
Bitcoin’s value rose as high as $63,926 early Monday, up as much as 8% since hitting a recent low of $59,159 on Friday.
Strategy rose 3.8% as of Monday morning, though shares have plummeted by more than 33% over the last month.
big number845,256. That’s Strategy’s total bitcoin holdings, aggregated at a market value of $63.9 billion, or about $75,680 per token, according to Strategy’s disclosure.
tangentCardano’s ADA token, once the world’s third-largest cryptocurrency behind bitcoin and ethereum, dropped to a low of just under $0.16 on Monday, its lowest level since December 2020. That extended a more than 26% decline for the token over the last week, following the cancellation of Cardano’s flagship summit.
key backgroundBroader pessimism spread across the crypto market following Strategy’s latest bitcoin sale, erasing the record-setting surge for the world’s largest cryptocurrency that followed the 2024 presidential election. President Donald Trump’s push for the U.S. to become the “crypto capital of the world” fueled demand and optimism for the crypto market, with promises of pro-crypto legislation pushing bitcoin above $120,000 by July 2025, and then to $122,000 just days later. Bitcoin’s value has steadily declined since hitting a peak in October 2025, following waning demand for spot bitcoin ETFs and lower odds of interest rate cuts. A hotter-than-expected labor market report last week further increased betting odds of an interest rate hike, aiding in bitcoin’s sell-off.
orbes valuationSaylor, who founded Strategy, then known as MicroStrategy, in 1989, has an estimated net worth of $3.8 billion as of Monday. His fortune plummeted during the dot-com crash, but Strategy’s bitcoin investments made Saylor a billionaire once again, as Saylor has directed his firm to shift its corporate coffers into bitcoin.
further readingForbesBitcoin Falls Below $60,000—Erasing Trump-Fueled RallyBy Ty RoushForbesCardano—Once The Third-Largest Cryptocurrency—Hits 6-Year Low: Here’s WhyBy Ty Roush
Schiff argued that the transaction highlighted a growing problem for Strategy’s capital allocation model.
In an X post on June 8, Schiff called the purchase "damage control, while also increasing its U.S. dollar reserves by $100 million."
He claimed that if Strategy sold common stock below the level required to make Bitcoin purchases accretive, existing shareholders effectively suffered dilution.
To commentators agreeing with Schiff’s interpretation, he said the stock sale is “the beginning of the end.”
Diluting MSTR ShareholdersThe criticism centers on Strategy’s adjusted multiple-to-net-asset-value (mNAV) which measures how much investors are paying relative to the company’s Bitcoin holdings.
Trader Crypto Kaleo pointed to comments Saylor made during Strategy’s Q1 earnings call, where he stated that issuing common stock to buy BTC is accretive only when MSTR trades above roughly 1.22x mNAV.
Strategy’s adjusted mNAV recently fell to around 1.2x, below the threshold Saylor previously identified.
That raises concerns whether newly issued shares could reduce Bitcoin exposure on a per-share basis rather than increase it.
"The cash raise and BTC acquisition was funded entirely by common MSTR ATM sales," Kaleo noted. "He’s diluting MSTR common shareholders."
Image: Shutterstock
Market News and Data brought to you by Benzinga APIs
Strategy stock is showing exceptional strength. Why is MSTR stock up today? Crypto Market BackdropSome analysts suggested that Michael Saylor may have sold a small amount of Bitcoin to reset expectations before buying more at lower levels. They argued the sale showed Strategy can adjust its holdings when needed without abandoning its long‑term strategy. Even so, they pointed to macro pressure, weak equities, oil uncertainty and capital rotation into AI as the larger forces weighing on crypto.
Bitcoin's decline did not show the heavy volume that usually marks a lasting bottom. One analyst said Bitcoin may still drift toward the low $50,000 range. Others noted that AI has attracted about $400 billion in capital inflows over the past six months, pulling money away from Bitcoin in the short term.
Strategy Adds 1,550 BitcoinStrategy announced it bought 1,550 BTC for $101 million at an average price of $65,332. This is the company's first purchase since selling 32 coins last week. The buy brings total holdings to 845,256 BTC acquired for just under $64 billion at an average of $75,680 per coin.
The latest purchase came in about $10,000 below that average, which means Strategy lowered its cost basis for the first time since it began accumulating Bitcoin. To fund the buy and rebuild liquidity, the company issued $181 million in common stock and increased its USD reserve by $100 million, bringing total cash reserves to $1 billion.
Regulatory Tailwind: The CLARITY ActMore than 200 companies signed a letter urging Senate leadership to schedule a vote on the Digital Asset Market CLARITY Act. The bill recently advanced out of the Senate Banking Committee and was placed on the Senate Legislative Calendar. Lawmakers are pushing to move it before the July recess.
MSTR Shares Are ClimbingMSTR Price Action: Strategy shares were up 5.94% at $127.60 at the time of publication on Monday, according to Benzinga Pro.
Image: PJ McDonnell/Shutterstock.com
Market News and Data brought to you by Benzinga APIs
A decade ago, Strategy (NASDAQ:MSTR | MSTR Price Prediction) was a forgettable enterprise analytics company that traded under the name MicroStrategy. The business intelligence software was fine. The stock was sleepy. Then founder Michael Saylor decided to torch the playbook.
In August 2020, the company made bitcoin its primary treasury reserve asset, becoming the first major public company to do so. The stock stopped behaving like a software ticker and started behaving like a leveraged bitcoin proxy. A 10-for-1 stock split hit in August 2024, the company officially rebranded to Strategy in February 2025, and CEO Phong Le turned the capital markets desk into a perpetual motion machine, raising $25.3 billion in 2025 alone to buy more coins. Today, Strategy holds 713,502 bitcoins, the largest corporate stash on earth.
Your $1,000 Became $6,212, But the Last Year Hurt 10-Year Return
Initial Investment: $1,000 Current Value: $6,212 Total Return: 521.21% Annualized Return: ~20% S&P 500 (same period): $3,484 (248.43%) 5-Year Return
Initial Investment: $1,000 Current Value: $2,485 Total Return: 148.5% Annualized Return: ~20% S&P 500 (same period): $1,745 (74.53%) 1-Year Return
Initial Investment: $1,000 Current Value: $327 Total Return: -67.34% S&P 500 (same period): $1,244 (24.37%) The 10-year number crushes the S&P 500, but almost all of that outperformance came after the 2020 bitcoin pivot. Holding through it required stomach. Shares ran to $396.51 at the Q2 2025 filing in July, then collapsed to $106 by the February 2026 Q4 earnings report as bitcoin slid roughly 40% over the past year. Q4 2025 alone produced a $12.44 billion net loss, driven by a $17.44 billion unrealized loss on the bitcoin pile.
I’d Buy It Only If I Wanted Leveraged Bitcoin I’d put $1,000 into Strategy today if I genuinely believe bitcoin heads materially higher from here and I want amplified exposure with no key-management headache. The bull case is simple: BTC rebounds, the $3.4 billion STRC platform keeps scaling, and the Bitcoin Per Share flywheel makes every dilutive raise accretive. The software business is a quiet kicker, with subscription services up 62.1% YoY.
But I’d avoid it if I’m not ready to underwrite bitcoin itself. Strategy carries $8.2 billion in long-term debt, perpetual preferred dividend obligations growing toward 11.25%, constant ATM dilution, and trades at a premium to its underlying coins. When BTC falls, MSTR falls harder. That last year proved it.
Personally, I lean to the sidelines. If I want bitcoin, I’ll buy bitcoin. The leverage cuts both ways, and the past twelve months were the wrong direction.
Strategy Inc. remains a leveraged play on Bitcoin, despite a recent deviation from its 'never sell' doctrine. The company's preferred stock overhang introduces a genuine new risk, with annual dividend obligations exceeding $750 million and declining USD reserves. MSTR's recent purchase of 1,550 BTC at $65,332 per coin helps average down its cost basis, reinforcing the long-term bullish thesis.
Michael Saylor said Monday that Strategy (NASDAQ:MSTR) shareholders had approved an amendment moving STRC preferred dividends from monthly to semi-monthly.
The first record date is June 30 and the first payment July 15.
Schiff’s Flywheel ArgumentPeter Schiff, the gold bug and persistent Bitcoin critic, was not impressed by the new changes.
He posted that Strategy’s original model generated positive Bitcoin yield by issuing common stock at a premium to net asset value, then later by issuing preferred stock at coupons below Bitcoin’s expected appreciation.
Now, Schiff argued, Saylor is “forcing common shareholders to accept a negative Bitcoin yield just to prop up Bitcoin.”
The dedicated $1 billion preferred-dividend backstop, disclosed the same morning, lines up neatly with that structural critique. Schiff has spent the past several weeks calling STRC a classic centralized Ponzi, arguing the dividend model depends on continuous capital inflows.
The First Bitcoin Sale Since 2022Strategy also sold 32 Bitcoin for roughly $2.5 million between May 26 and May 31, its first disclosed sale since December 2022. The amount is symbolic, but it puts Saylor’s May earnings call line about selling bitcoin “to inoculate the market” into practice.
Two Prime CEO Alexander Blume warned last week that Saylor may have “flown too close to the sun,” arguing the preferred-stack math could force more Bitcoin sales to fund STRC dividends.
MSTR is trading at $127, up roughly 5% Monday, with Bitcoin near $63,500.
Image: Shutterstock
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Strategy (MSTR - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this business software company have returned -35.1% over the past month versus the Zacks S&P 500 composite's +0.2% change. The Zacks Financial - Miscellaneous Services industry, to which Strategy belongs, has lost 6.5% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Strategy is expected to post earnings of $52.04 per share, indicating a change of +59.6% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The consensus earnings estimate of $116.7 for the current fiscal year indicates a year-over-year change of +866.3%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $74.73 indicates a change of -36% from what Strategy is expected to report a year ago. Over the past month, the estimate has remained unchanged.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Strategy.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Strategy, the consensus sales estimate of $126.95 million for the current quarter points to a year-over-year change of +10.9%. The $503.9 million and $498 million estimates for the current and next fiscal years indicate changes of +5.6% and -1.2%, respectively.
Last Reported Results and Surprise HistoryStrategy reported revenues of $124.3 million in the last reported quarter, representing a year-over-year change of +11.9%. EPS of -$38.25 for the same period compares with -$16.49 a year ago.
Compared to the Zacks Consensus Estimate of $124.6 million, the reported revenues represent a surprise of -0.24%. The EPS surprise was -1021.7%.
Over the last four quarters, Strategy surpassed consensus EPS estimates two times. The company topped consensus revenue estimates three times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Strategy is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Strategy. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.
Lawrence Lepard, a longtime bitcoin investor and advocate, laid out one of the most aggressive bull cases for Strategy (NASDAQ:MSTR | MSTR Price Prediction) on a recent appearance on Thoughtful Money with Adam Taggart. Lepard says he is buying shares both for his fund and personally, and his target price is striking: “I think it’s a $1,000 stock within a few years.”
MSTR last traded around $127.69 after falling 35.53% over the past month and 67.34% over the past year, alongside a sharp pullback in Bitcoin, which is down 21.27% over the past month to about $63,495.
The $1,000 Call and the Leverage Thesis Lepard’s idea is that MSTR is a leveraged proxy on Bitcoin. Strategy borrows in dollars, issues equity and preferred stock, and channels the proceeds into Bitcoin. That structure amplifies Bitcoin’s moves in both directions, which is why MSTR has historically outrun Bitcoin in rallies and undercut it in drawdowns. “I’m very, very bullish on MicroStrategy,” Lepard said, framing Strategy stock as the most concentrated way to express his view that Bitcoin annual returns continue in the 30-40% range.
The Weimar Germany Analogy Lepard compares Michael Saylor’s strategy of borrowing in fiat currency to buy bitcoin to that of a Weimar-era investor who borrowed money to buy industrial businesses. As the value of the German currency collapsed, investors who had borrowed money to purchase hard assets such as businesses, real estate, or commodities often saw their assets rise in value while their debt became easier to repay in increasingly devalued currency.
In an inflationary environment, debt denominated in a depreciating currency becomes easier to service over time, while the hard asset purchased with that debt appreciates in real terms. Lepard’s broader macro view is that, “the monetary system we’ve constructed is fatally flawed.” This is his foundation for treating Bitcoin as digital gold and MSTR as a vehicle to compound it.
The Stretch Preferred and Financial Engineering The newest piece of Saylor’s financing stack is the Stretch preferred stock. It pays an 11.5% dividend, with proceeds generated from the preferred stock used to buy more bitcoin. “To me, it’s an intelligent corporate financial engineering bet,” he said.
The strategy is straightforward: raise capital through high-yield preferred stock offerings, invest the proceeds into Bitcoin, and rely on Bitcoin’s appreciation to more than cover the dividend payments. The challenge is that an 11.5% dividend is a fixed obligation that must be paid regardless of whether Bitcoin is trading at $100,000 or $40,000.
Saylor Becomes the “Richest Man in the World” or Bankrupt Lepard is candid that the outcome for Strategy is binary. On the upside, he believes Saylor “will end up probably the richest man in the world, but it’ll probably take 20 years for that to happen.” On the downside, if Bitcoin fails, Saylor “is going to go bankrupt faster than anybody else.” His conviction is unambiguous: “I kind of feel like we’ve won this game now. It’s become pretty obvious we’ve won this game.”
Prediction markets paint a more measured picture. Polymarket traders assign only an 8% probability of a MicroStrategy margin call in 2026, but just a 36% probability that the company reaches 1 million BTC by year-end. Sell-side analysts maintain a consensus target of $351.54, with 14 buy ratings and 1 hold, well below Lepard’s $1,000 figure but well above today’s price.
Lepard’s MSTR thesis is among the most aggressive expressions of Bitcoin bullishness in public markets. The same financial engineering that makes the $1,000 scenario possible, layered preferreds and dollar-denominated debt funding bitcoin purchases, also stacks fixed obligations that get harder to meet if Bitcoin keeps sliding. MSTR is a leveraged, binary-outcome way to play bitcoin rather than a substitute for owning it directly.
Cryptocurrency markets began soaring following the 2024 U.S. presidential election, reaching new all-time highs in August 2025 as the crypto-friendly Trump administration began implementing policies. But this summer has been anything but sunny for crypto markets. Bitcoin has erased all its post-election gains over the last few weeks, dipping below the critical $60,000 level for the first time since September 2024. Crypto is naturally a tornado of volatility, but this time the market action appears to be generating from major institutional players, not retail investors.
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Why Crypto Markets Are Crashing in 2026The total crypto assets market cap has fallen to under $2.5 trillion, down from nearly $4.4 trillion just eight months ago. After moving in tandem with the Nasdaq 100 for much of the AI rally, Bitcoin and its cohorts have become dislocated from the tech sector due to a host of industry and macroeconomic factors.
Institutional Derisking: This should be the biggest concern amongst crypto investors. Bitcoin ETFs are seeing record outflows so far in 2026, including the newer spot ETFs that were viewed as less risky than the futures-based funds. Institutional funds have been a constant and reliable liquidity source, and if this capital exits the market, volatility will only get worse.
Treasury Drag: Digital asset treasury companies have become a popular trade over the last few years. These companies would issue equity to buy digital assets, and investors would happily pay a premium for the stock to gain crypto exposure. However, as crypto prices plummet, these treasury companies could be forced sellers at prices below cost basis to cover other obligations. We’ll delve into an example in a minute.
Geopolitical Shocks, Hawkish Policy, and Risk Rotation: While not crypto-specific, the specter of lingering inflation and high rates continues to weigh on volatile, risky assets. Market participants now consider rate hikes as likely as rate cuts this year, which is dampening crypto enthusiasm. Additionally, AI stocks have stolen the spotlight for retail risk seekers, and many former crypto traders now seek the volatility of memory or AI infrastructure stocks.
3 Stocks to Avoid as Cryptocurrencies PlummetCrypto’s in trouble at the moment, and any urge to buy the dip is probably best left ignored. Bitcoin at $60,000 is still “only” 50% off its all-time high (a drawdown for ants, Bitcoin HODLers will tell you), and industry news continues to lean negative. Here are three stocks unlikely to get hot this summer:
Strategy: Bitcoin Sales Trigger Larger WorriesCEO Michael Saylor has been one of the world's biggest Bitcoin bulls, but apparently even he sees trouble ahead. Last week, Strategy Inc. NASDAQ: MSTR announced it had sold Bitcoin for the first time since 2022, dumping 32 tokens for approximately $2.5 million. Yes, 32 Bitcoins is a trivial amount for a company that holds more than 800,000 in total, but the reason for the sale spooked investors more than the amount. Strategy sold Bitcoin to cover dividend obligations from its preferred stock, STRC, which dipped below par to $95 on June 3. STRC is issued to fund Strategy’s Bitcoin purchases and prevent dilution of common shareholders, but the dividend bump signals softening demand for the preferred.
Strategy purchased more Bitcoin during the recent dip, but the “Never Sell” narrative has blown up, and weak demand for preferred shares puts the company’s whole treasury strategy at risk. MSTR shares have closely tracked Bitcoin spot prices, and like BTC, the stock is back at September 2024 levels. No technical signals hinting at a reversal yet either; in fact, the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators both continue to shed momentum.
Bullish: High Beta Exchange With Dwindling VolumeBullish Inc. NYSE: BLSH went public last summer, and its first year in public markets hasn’t exactly lived up to its namesake. Bullish is a cryptocurrency exchange similar to Coinbase Global Inc. NASDAQ: COIN.
Its shares now trade below their IPO price, thanks to declining trading volumes. The company missed earnings-per-share estimates in its Q1 2026 report on May 14, largely due to slowing growth in trading revenue. The $4.2 billion acquisition of Equiniti is also a huge risk, considering Bullish’s current market cap sits at $4.1 billion.
There appears to be no end in sight to the drawdown. The stock is revisiting the February all-time lows, and the RSI and MACD show sellers are in full control at the moment. Unless trading volumes return, it's probably best to bet bearish on Bullish.
ProShares Bitcoin ETF: Higher Costs and Risks Compared to Spot ETFsThe ProShares Bitcoin ETF NYSEARCA: BITO was one of the first Bitcoin ETFs available on U.S. exchanges, but its strategy has quickly become outdated. BITO holds a combination of CME Bitcoin futures contracts and U.S. Treasuries, aiming to mimic Bitcoin's price without actually holding it. But now that spot ETFs are on the market, holders are paying a 0.95% expense ratio for a fund facing decay risk. When Bitcoin prices decline, BITO is forced to roll its expiring futures into more expensive, later-dated contracts, which erodes the fund's net asset value (NAV) and causes underperformance relative to Bitcoin's spot price. A sustained drawdown is the worst type of bear market for futures-based funds like BITO.
BITO has lost more than 60% over the last 52 weeks, failing to capitalize on the crypto rally following Trump’s election win. The stock recently hit a new all-time low after another failed 50-day moving average breakout, and the MACD shows a complete collapse in buying. With assets under management (AUM) now below $1.50 billion, this is looking increasingly like an obsolete asset headed for dissolution.
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Lawrence Lepard, a longtime bitcoin investor and author, spoke with host Adam Taggart on the Thoughtful Money podcast episode "The Next Big Money Printing Cycle Is Almost Here," and planted a contrarian flag. With Bitcoin sliding to around $63,000 from its all-time high of $124,000-$126,000, Lepard told listeners, "There were a lot of people ready to... Top Bitcoin Analyst Predicts $200K Within Two Years: 'We're Either At Or Within Spitting Distance Of A Bottom'
On Friday, June 5, Bitcoin fell below $60,000 for the first time since October 2024, putting the asset down roughly 50% from its peak. While Bitcoin has rebounded to over $63,000 as of Monday, June 8, it’s clear that crypto investors have missed out on the gains the market has seen so far this year. However, John D’Agostino, Head of Institutional Strategy at Coinbase, told CNBC on June 8 that both retail and institutional investors are treating crypto as a long-duration asset to buy and hold, signaling confidence in the asset.
Coinbase (NASDAQ:COIN | COIN Price Prediction) trades at $161.49 after a 32.61% year-to-date drawdown, and spot bitcoin proxy Fidelity Wise Origin Bitcoin Fund (NYSEARCA:FBTC) is down 31.18% YTD. The behavioral question D’Agostino raises matters precisely because the tape looks ugly.
The Institutional “Buy The Discount” Signal D’Agostino frames institutional behavior as conviction buying. “I have the luxury of speaking to institutional investors. They’ve put months and years into looking at this asset class. So when they do that, and it’s cheaper, they like it,” he said. His line captures the mindset: “They loved it at 125, they liked it at 100, and they love it even more at 65.”
Investors should remember that D’Agostino is a Coinbase executive and benefits when interest in crypto grows. At the same time, few people have more direct exposure to institutional crypto flows, giving him a unique vantage point on how large investors are behaving during market downturns.
The new entrants he flags are family offices and sovereign wealth funds in the UAE, accumulating at lower prices. That mirrors what Coinbase has been reporting in its filings: institutional transaction revenue of $136 million in Q1 2026 held up even as total crypto market capitalization and trading volumes both fell more than 20% sequentially. Coinbase also flagged its 12th consecutive quarter of net native unit inflows, with strength in BTC, ETH, and SOL.
The Retail Stickiness Signal “We’re still at about $100 billion of bitcoin ETF exposure. Just think about that. This is a very, very new product. The price has dropped almost 50% from the peak. And we’ve only seen about 15% drawdown in the retail interest,” D’Agostino said, pointing to retail ETF balances that have barely budged.
In prior cycles, retail capitulated hard on drawdowns of this size. ETF holdings barely budging against a roughly 50% price decline is a different behavioral pattern. D’Agostino’s summary: “I think both retail and institutional are signaling this is a long-term asset you want to hold.”
Conversations on Reddit tell a more cautious story. Discussions around MicroStrategy (NASDAQ:MSTR) in early June centered on the company’s first bitcoin sale since 2022, a $2.5 million disposition, with sentiment skewing bearish.
The Regulatory Infrastructure Tailwind D’Agostino also pointed to policy progress: “We have seven bills circulating that will do great things for the institutional piping that supports bitcoin and other crypto assets.” Cleaner tax treatment and market-structure rules lower friction for large allocators to participate at scale, which supports the durable-asset-class thesis over time.
Coinbase recently detailed a 14% headcount reduction targeting approximately $500 million in annualized cost savings, alongside $303.3 million in adjusted EBITDA, marking its 13th consecutive positive quarter.
What It Means For Investors The broader thesis is that crypto is evolving from a speculative trade into a long-term portfolio allocation. According to D’Agostino, both institutional and retail investors held through Bitcoin’s roughly 50% drawdown rather than rushing for the exits. Investors who want regulated exposure typically use spot bitcoin ETFs or crypto-linked equities such as Coinbase or MicroStrategy, the latter of which holds 845,256 BTC as of June 8, 2026.
Strategy (NASDAQ:MSTR | MSTR Price Prediction) is positioned as a long-horizon vehicle because it is the only public-market structure engineered to compound a fixed-supply monetary asset across unlimited capital-markets cycles, with a balance sheet built to outlast bitcoin’s drawdowns rather than be liquidated by them.
Pillar 1: Structural Durability The forever case starts with a balance sheet no peer has replicated. Strategy holds 818,334 BTC as of May 3, 2026, a position worth roughly $54 billion and backed by $36.65 billion in shareholders’ equity. In 2025 the company raised $25.3 billion in capital, making it the largest equity issuer among U.S. public companies for the second consecutive year, and it has already pulled in $11.68 billion through ATM offerings YTD 2026. That capital-markets machinery, paired with the legacy software business whose subscription revenue grew to $58.88 million at a 67.1% gross margin, is the durable engine.
Pillar 2: Compounding, Not Income MSTR common stock pays no dividend. The compounding mechanism is bitcoin-per-share growth, measured as BTC Yield, which ran 9.4% YTD 2026 after 22.8% in full-year 2025. The preferred stack handles cash income for investors who want it: STRC scaled to an $8.5 billion market cap in 9 months, paying $0.96 per share monthly at an 11.50% annualized rate. For the common, the long arithmetic is bitcoin’s own: BTC is up 10,228% over the past ten years, and MSTR has captured that asymmetry, returning 577.46% over the same decade.
Pillar 3: Cycle Survival Surviving bitcoin winters is the entire engineering problem, and Strategy has built for it. A $2.25 billion USD Reserve covers 2.5 years of dividend and interest obligations against $8.17 billion in long-term debt. The ASU 2023-08 fair value accounting standard means quarterly mark-to-market noise no longer threatens covenants the way it once did. Prediction markets agree: traders on Polymarket assign a 92.5% probability that MSTR is not margin called in 2026. Meanwhile, Morgan Stanley, Goldman Sachs, and Citi are launching bitcoin ETFs, trading, custody, and lending, validating the thesis the company built five years before Wall Street arrived.
Where the Thesis Underperforms A multi-year bitcoin bear market is the clear failure mode. Q1 2026 produced a $14.46 billion unrealized loss, BTC has fallen 43.15% over the past year, and MSTR has dropped 66.03% with it. A holder who needed to sell in this window would be punished. That doesn’t change the forever thesis because the structural design, perpetual preferreds, term debt, and the USD Reserve, means time is the variable the company manages. Drawdowns are the cost of entry under this design.
At $127.20, with the stock trading near a price-to-book ratio of 1, the math favors holders who can wait through cycles. The structural design rewards multi-cycle holders.
Is Strategy Safe?The bet has seen limited participation as of this writing, attracting slightly more than $162,000 in wagers.
The State Of Saylor’s StrategyConcerns about the Strategy's financial strength rose after it disclosed Bitcoin sales last week, undermining the "never sell" thesis that bullish investors had counted on.
The sale triggered instant panic, with Bitcoin tumbling below $60,000 to hit its lowest level since October 2024. The company’s shares plunged 40% over the week, and unrealized losses on its BTC holdings have ballooned to a record $12 billion.
As of this writing, Strategy’s Bitcoin reserves are valued at nearly $52 billion, enough to cover 30 months of its dividend and interest obligations. The firm also holds $1 billion in cash reserves, and there are no major debt maturities until 2028.
Critics Aren’t ConvincedEconomist Peter Schiff, meanwhile, predicted doomsday for the Bitcoin treasury company, highlighting a major problem with its capital allocation model.
Grayscale Head of Research Zach Pandl said last week that the firm’s levered business model “is under pressure” and creating problems for the BTC market as a whole.
Price Action: At the time of writing, BTC was exchanging hands at $61,429.92, down 2.24% over the last 24 hours, according to data from Benzinga Pro.
Strategy shares fell 0.36% in after-hours trading after closing 8% lower at $117.02 during Tuesday’s regular trading session. Year-to-date, the stock has plummeted 23%.
Benzinga's Edge Stock Rankings indicate that MSTR has underperformed with a weaker price trend across short-, medium-, and long-term timeframes.
Photo: PJ McDonnell / Shutterstock.com
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The Edge Ranking CollapseThe momentum score, which measures a stock’s relative strength based on price movement patterns and volatility, collapsed from 10.43 to 6.32 for all five funds.
This steep decline squarely places these ETFs in the bottom 10% of the market. Furthermore, all five funds are exhibiting negative price trends across short, medium, and long-term horizons, signaling intense and sustained downward pressure.
BTC Price ActionAt the last check, Bitcoin was trading 3.15% lower at $61,329.31 per coin, as per the last 24 hours. It was lower by 51.37% from its all-time high of $126,198.07. Meanwhile, here is how the five BTC-linked ETFs have performed.
Triggers Behind The PlungeAlthough financially small, the move was symbolically significant, raising concerns about corporate treasury models. Lucy Gazmararian described the current environment as a “classic mid-cycle” bear market.
Compounding the stress was the geopolitical uncertainty in the Middle East, accelerating ETF outflows.
A Silver Lining For Accumulation?Despite the bleeding, some experts view this downturn as a cyclical reset. Analyst Michaël van de Poppe called the recent sell-off “relatively irrational,” suggesting that a clean break above $65,000 could trigger a strong run to $74,000.
Additionally, analyst Ali Martinez noted that the flush-out is creating “premier accumulation windows” in the $53,900 and $43,150 ranges.
While market sentiment remains “incredibly shaky,” CryptoQuant emphasizes that the current “meaningful” stress—with 40% of supply in loss—often precedes deep bear market bottoms.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock
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Key Takeaways Strategy posted $124.3M in Q1 revenues against Bitcoin holdings valued above $64B.MSTR reported a $12.5B net loss after a $14.5B unrealized Bitcoin-related loss.Strategy raised $11.7B via capital markets as external financing remains critical. Strategy Inc.’s (MSTR - Free Report) relatively small operating revenue base is raising concerns about whether its core business can adequately support the risks associated with its rapidly expanding Bitcoin-heavy balance sheet.
In the first quarter of 2026, Strategy generated just $124.3 million in revenues, while its Bitcoin holdings were valued at more than $64 billion. The disparity underscores how heavily the company now relies on Bitcoin price appreciation and capital market activity rather than recurring software revenue growth. Although revenues rose 11.9% year over year, they remain modest relative to the company’s massive exposure to digital assets and growing financial obligations.
The imbalance became more evident during the quarter, when Strategy reported a $14.5 billion unrealized loss tied to Bitcoin price declines, resulting in a net loss of $12.5 billion. At the same time, the company carried $13.5 billion in preferred equity outstanding and $8.2 billion in convertible debt. Cumulative preferred dividend payments have already exceeded $692 million.
MSTR continues to rely primarily on equity and preferred issuances, rather than internally generated operating cash flow, to finance Bitcoin purchases. Year to date, Strategy raised roughly $11.7 billion through capital markets activities.
In May 2026, Strategy’s $1.5 billion debt repurchase reduced its USD reserve, underscoring how MSTR’s relatively small operating revenue base is increasing balance sheet risks as the company remains heavily dependent on Bitcoin performance and external financing. Unless the software business scales meaningfully over time, continued reliance on external financing could place additional pressure on the balance sheet.
How Rivals Compare Against MSTR’s Financial StrategyCoinbase Global (COIN - Free Report) benefits from diversified crypto revenues, stronger liquidity and regulatory engagement versus Strategy, reducing dependence on leveraged Bitcoin accumulation. COIN also maintains sizeable custodial and subscription businesses that support recurring cash flow stability. Compared with MSTR’s concentrated Bitcoin balance sheet strategy, COIN appears operationally stronger, though COIN still faces earnings volatility during prolonged digital asset downturns.
Riot Platforms, Inc. (RIOT - Free Report) competes with Strategy through direct Bitcoin mining exposure and infrastructure ownership rather than debt-driven Bitcoin purchases. RIOT benefits from energy partnerships, scalable mining capacity and operational leverage tied to Bitcoin prices. Still, RIOT faces risks from power costs, mining difficulty and weaker recurring revenue visibility. Compared with MSTR’s leveraged treasury model, RIOT offers asset-backed exposure.
MSTR’s Price Performance, Valuation & EstimatesShares of Strategy have declined 23% in the year-to-date period, underperforming the Zacks Finance sector’s modest 1.2% gain and the Financial - Miscellaneous Services industry’s 9.9% fall.
MSTR’s YTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, MSTR appears overvalued, trading at a forward 12-month price-to-sales ratio of 81.81, significantly higher than the sector’s 8.82X. MSTR carries a Value Score of F.
MSTR’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MSTR’s 2026 earnings is pegged at $116.7 per share, unchanged over the past 30 days. The estimate also indicates a sharp year-over-year improvement from a loss of $15.23 per share.
$10,000 dropped into T-REX 2X LONG MSTR DAILY TARGET ETF (NASDAQ:MSTU) on November 1, 2024 is worth about $561 today, and that figure already accounts for the 1-for-10 reverse split that took effect on December 3, 2025. The fund went out at a split-adjusted $67.40 in early November 2024, and it trades at $3 today. MSTU printed a return of negative 94% over that window. From the late-November 2024 intraday peak (which sat well above the split-adjusted open), buy-and-hold drawdown lands closer to 98%.
Crucially, the underlying did not lose anywhere near that much. Strategy (NASDAQ:MSTR | MSTR Price Prediction), the Michael Saylor Bitcoin-treasury vehicle that MSTU is built to track at 2x daily, fell 45% over the exact same November 2024 to June 2026 window, from $229.71 to $127.20. Bitcoin itself fell 43% year over year and trades near $62,500. The leveraged equity wrapper on top of it lost about 70% in a year, and the leveraged ETF wrapper on top of that lost about 96%. That escalation is the entire story.
How a 45% decline becomes a 98% wipeout MSTU promises 200% of MSTR’s return for a single trading day, then it resets at the close and starts the next day from scratch. It uses swap agreements and daily rebalancing, and the issuer’s own materials describe it as a short-term tactical tool because of the risks associated with daily compounding.
Consider what the volatility actually looks like. In just the past month MSTR fell 42%, and MSTU fell 68%. That ratio (call it 1.8x) looks roughly right for a 2x daily product. Stretch the window to one year, though, and MSTR is down 66% while MSTU is down 96%. The ratio is no longer 2x of anything. It is the compounding penalty that leveraged-ETF prospectuses warn about in bold, applied to one of the most volatile large-cap equities in the United States.
There is also a tracking-error problem that sits underneath the volatility drag. Sahm Capital reported in December 2024 that leveraged ETFs tracking MicroStrategy were experiencing significant tracking errors due to the company’s volatile stock and the ETFs’ exposure to swaps and options, and that MicroStrategy’s relatively small size made it challenging for these ETFs to maintain accurate performance, posing heightened risks for investors.
The fund was so successful at gathering assets (over $2.5 billion in AUM in just over two months) that swap counterparties effectively ran out of capacity to write the other side of the trade at scale, which forced compromises in how the daily exposure was achieved. Add in the fund’s 1.05% expense ratio, the fact that it pays no dividend, and the December 2025 1-for-10 reverse split that quietly hid an order-of-magnitude price collapse from the casual chart reader, and you have the full anatomy of a structural value-destroyer.
The stacked-leverage problem Strategy is already a leveraged bet. The company issues convertible debt and preferred stock to buy Bitcoin, which means a holder of MSTR is implicitly running a Bitcoin position financed with debt. When MSTU then promises 2x of MSTR’s daily move, the end buyer is sitting on leverage on top of leverage on top of Bitcoin, with a daily reset on the outermost layer. In a calm uptrend, all three layers compound in the same direction and the screenshots look spectacular. In a choppy downtrend, which is what 2025 and 2026 have delivered, the layers compound against you.
The Reddit and Moomoo posts feel like a small museum exhibit on the psychology of holding a daily-reset product. One user on May 2, 2026 expressed relief and excitement about MSTU finally becoming profitable, mentioning that a slight drop the previous day had caused them mental distress. Another posted on May 14, 2026, “I hope it goes up a little more…[Sob],” the parenthetical doing more work than the sentence. These are people who treated a daily-reset 2x fund like a buy-and-hold expression of a long-term Bitcoin thesis, which the prospectus explicitly tells them not to do.
What you should actually watch The forward look here is the easy part, because the mechanism is structural rather than regime-dependent. MSTU will continue to bleed value over any meaningfully long horizon in which MSTR is volatile, regardless of whether MSTR ends the period higher or lower. Exposure to Bitcoin is available through Bitcoin itself or a spot Bitcoin ETF. If you want a leveraged equity wrapper around Bitcoin, MSTR is itself that wrapper. If you want intraday or multi-day directional torque on MSTR, MSTU is built for exactly that and nothing else, which the issuer’s own language about a short-term tactical tool makes plain.
As long as MSTR trades like a Bitcoin-with-extra-steps small-cap (and right now it absolutely does), the compounding penalty inside MSTU stays brutal. A Bitcoin rally back to the highs would help, but it would not restore the dollars lost on the way down, because daily-reset products do not get those dollars back. They reset at the close, and the calendar moves on. That is the trade-off, and it is the only thing about MSTU that has ever really been worth understanding.
As far as crypto goes, you’d be hard-pressed to find something that comes to mind quicker than Strategy, as Strategy has been a major player with Michael Saylor, of course, being the face of the company. They have had some serious issues as of late, as Bitcoin has struggled, but Strategy Incorporated does see some support in this general vicinity.
If we can recapture the $125 level, it might be good for a pop from here. If it starts to break down from here, maybe significantly below the $119 level, we probably reset near the $100 level. That being said, this is a market that needs to make some type of move to the upside soon, or it’s going to be in very serious trouble.
Bitcoin treasury companies are becoming something much bigger than Bitcoin holders. In this episode of The Daily Wolf, Scott Melker sits down with Strategy President & CEO Phong Le to discuss why the company believes Bitcoin-backed capital markets could reshape financial infrastructure.
NEW YORK--(BUSINESS WIRE)--In accordance with the terms of Annaly’s 6.95% Series F Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series F Preferred Stock”), the Board has declared a Series F Preferred Stock cash dividend for the second quarter of 2026 of $0.559639 per share of Series F Preferred Stock, which reflects a rate of 8.95422%, equal to three-month CME Term SOFR (plus a spread adjustment of 0.26161%) on the Dividend Determination date plus a spread of 4.993%.
In accordance with the terms of Annaly’s 6.50% Series G Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series G Preferred Stock”), the Board has declared a Series G Preferred Stock cash dividend for the second quarter of 2026 of $0.513974 per share of Series G Preferred Stock, which reflects a rate of 8.13322%, equal to three-month CME Term SOFR (plus a spread adjustment of 0.26161%) on the Dividend Determination date plus a spread of 4.172%.
In accordance with the terms of Annaly’s 6.75% Series I Fixed-to-Floating Rate Cumulative Redeemable Preferred Stock (“Series I Preferred Stock”), the Board has declared a Series I Preferred Stock cash dividend for the second quarter of 2026 of $0.565604 per share of Series I Preferred Stock, which reflects a rate of 8.95022%, equal to three-month CME Term SOFR (plus a spread adjustment of 0.26161%) on the Dividend Determination date plus a spread of 4.989%.
In accordance with the terms of Annaly’s 8.875% Series J Cumulative Redeemable Preferred Stock (“Series J Preferred Stock”), the Board has declared a Series J Preferred Stock cash dividend for the second quarter of 2026 of $0.560851 per share of Series J Preferred Stock.
Dividends for the Series F Preferred Stock, Series G Preferred Stock, Series I Preferred Stock, and Series J Preferred Stock are payable on June 30, 2026 to preferred shareholders of record as of June 1, 2026.
About Annaly
Annaly is a leading diversified capital manager with investment strategies across mortgage finance. Annaly’s principal business objective is to generate net income for distribution to its stockholders and to optimize its returns through prudent management of its diversified investment strategies. Annaly is internally managed and has elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. Additional information on the company can be found at www.annaly.com.
Forward-Looking Statements
This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements which are based on various assumptions (some of which are beyond our control) and may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,” “will,” “should,” “estimate,” “project,” “believe,” “expect,” “anticipate,” “continue,” or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability of mortgage-backed securities and other securities for purchase; the availability of financing and, if available, the terms of any financing; changes in the market value of our assets; changes in business conditions and the general economy; our ability to grow our residential credit business; our ability to grow our mortgage servicing rights business; credit risks related to our investments in credit risk transfer securities and residential mortgage-backed securities and related residential mortgage credit assets; risks related to investments in mortgage servicing rights; the our ability to consummate any contemplated investment opportunities; changes in government regulations or policy affecting our business; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; our ability to maintain our exemption from registration under the Investment Company Act of 1940; and operational risks or risk management failures by us or critical third parties, including cybersecurity incidents. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law.
Annaly Capital (NLY 0.04%) is a behemoth among mortgage-focused real estate investment trusts (REITs). It has the largest market cap in the sector and is 12 times the size of its average peer.
Almost everything about Annaly Capital is big, including its dividend yield, which at around 13% is more than 10 times higher than the S&P 500's 1.1% yield. A high dividend yield typically suggests that a stock trades at a discount. However, Annaly's book value tells a different story.
Image source: Getty Images.
Digging into Annaly's book value Annaly Capital ended the first quarter with a total investment portfolio of $106.7 billion, up $2 billion from the end of last year. Most of its portfolio -- $92.2 billion -- was Agency mortgage-backed securities (MBS; pools of residential mortgages guaranteed against credit losses by government agencies such as Fannie Mae). The leading mortgage REIT also had $10.3 billion in residential credit investments (non-Agency residential mortgages) and $4.2 billion of mortgage servicing rights (MSR; the obligation to service residential loans for a fixed servicing fee). While its Agency MBS portfolio declined slightly in the quarter, Annaly grew its residential credit and MSR portfolios by 30% and 9%, respectively.
The REIT has invested $16.3 billion of shareholder capital in its portfolio, with the remaining funded by leverage. After subtracting its liabilities from its assets, Annaly's book value was $19.82 per share at the end of the first quarter. That's down from $20.21 per share at the end of last year. Annaly's book value is below its recent share price of more than $21.50 per share. That suggests investors are willing to pay a little more for Annaly because of the quality of its portfolio and operations.
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What this means for the dividend's sustainability Annaly's stock has traded at a premium to its book value over the past year. That has enabled the REIT to raise capital by selling shares and deploy it into accretive investments. For example, it raised $509 million in capital during the first quarter. CEO David Finkelstein noted on the first quarter conference call that the "capital raise was specifically related to Resi Credit and MSR in real time." He stated that "we felt it was highly productive to raise capital, and we did so." It deployed that capital into a couple of billion dollars of residential credit investments and nearly $400 million of MSR. By deliberately selling stock above book value and earmarking it for opportunistic investments, the company was able to grow its long-term earnings capacity.
The REIT's earnings available for distribution (EAD) came in at $0.76 per share during the quarter, well in excess of its $0.70 per share dividend. EAD has grown over the past year, from $0.72 per share in the first quarter of 2025 to $0.74 per share by the end of the year. The rise in the REIT's EAD allowed it to raise its dividend by nearly 8% early last year. That marked a notable turnaround for a company that had cut its payout several times previously.
Annaly might not be cheap, but the dividend looks safe Annaly currently trades at a premium to its book value. However, that benefits the REIT by allowing it to raise capital to make accretive investments, thereby growing its EAD. With its EAD rising, its big-time dividend is growing more sustainable.
Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
A month has gone by since the last earnings report for Annaly Capital Management (NLY - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Annaly due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Annaly Capital Management Inc before we dive into how investors and analysts have reacted as of late.
Annaly Q1 Earnings Beat Estimates, Net Interest Margin Improves Y/YAnnaly reported first-quarter 2026 earnings available for distribution per average share of 76 cents, which beat the Zacks Consensus Estimate of 74 cents. The figure increased from 72 cents in the year-ago quarter.
The company’s net interest income and net interest margin improved year over year in the reported quarter. Notably, the year-over-year increase in book value per common share was also encouraging. However, a lower economic capital ratio was concerning.
Net income available to common stockholders was $242 million compared with $87.1 million in the year-ago period.
Inside Annaly’s HeadlinesNet interest income was $452.7 million in the reported quarter, which lagged the Zacks Consensus Estimate by 8.4%. In the prior-year quarter, the company reported NII of $220 million.
Net interest spread (excluding PAA) of 1.42% in the first quarter increased from 1.35% in the prior-year quarter.
Annaly’s BVPS was $19.82 as of March 31, 2026, up from $19.02 in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.7%, down from 14.8% in the prior-year quarter.
In the first quarter, the weighted average actual constant prepayment rate was 10.2%, up from 7.1% in the year-ago quarter.
Annaly generated an annualized EAD return on average equity of 14.58% in the first quarter, which increased from the prior-year quarter’s 14.43%.
Annaly’s total portfolio was $106.7 billion in the quarter, including a $92.2-billion Agency portfolio. The Residential Credit portfolio increased 30% to $10.3 billion, while the MSR portfolio increased 9% to $4.2 billion.
LiquidityAnnaly maintained a disciplined leverage profile in the quarter, with GAAP leverage at 7.3X and economic leverage at 5.7X, both modestly higher than the prior quarter’s levels. The company also reported total stockholders’ equity of $16.3 billion as of the quarter-end.
Liquidity remained a focal point, given ongoing macro and rate volatility. Annaly ended the quarter with $9 billion in total assets available for financing, including $5 billion in cash and unencumbered Agency MBS. This flexibility matters for a mortgage REIT because it helps sustain funding access and supports portfolio repositioning as market conditions shift.
HedgingAgainst a volatile rate environment, the company kept its hedge posture relatively steady. The company ended the quarter with a hedge ratio of 87%, while maintaining an $81-billion hedge portfolio that was broadly in line with the prior quarter.
Funding costs improved modestly, supporting underlying spread dynamics. Average economic costs of interest-bearing liabilities were 3.93% in the quarter, while the net interest margin (excluding PAA) was 1.71% compared with 1.69% in the first quarter of 2025. Average yield on interest-earning assets, excluding the premium amortization adjustment, was 5.35%, highlighting how asset yields continued to run ahead of funding costs as the company balanced carry opportunities with risk management.
Dividend Coverage & Capital RaisingA key highlight for income-focused investors was that earnings again exceeded the common dividend. Annaly declared a quarterly common stock cash dividend of 70 cents per share for the first quarter, supported by its earnings available for distribution.
The company also leaned on equity issuance to support growth. Annaly raised $509 million through its at-the-market sales program during the quarter, which management characterized as accretive, and framed the move as part of its broader approach to disciplined portfolio management.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates revision.
VGM ScoresAt this time, Annaly has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Annaly has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Key Takeaways NLY offers a 12.99% dividend yield with a 95% payout ratio, reflecting a high-income distribution model.NLY increased its quarterly dividend 7.7% in March 2025, signaling confidence in its earnings capacity.NLY maintains $9B in available assets and Agency MBS, supporting liquidity and near-term dividend stability. One of the most closely watched aspects of Annaly Capital Management. Inc.’s (NLY - Free Report) financial profile is its dividend policy. As a publicly traded mortgage real estate investment trust (mREIT), the company has historically delivered attractive shareholder returns while maintaining a high dividend yield that continues to attract income-focused investors.
Income-oriented investors generally favor REIT stocks because U.S. law requires these companies to distribute at least 90% of their annual taxable income as dividends. Against this backdrop, Annaly Capital’s dividend yield currently stands at 12.99%, making the stock appealing for investors seeking steady income streams. Further, its payout ratio of 95% highlights the company’s commitment to consistent shareholder distributions. In March 2025, Annaly Capital increased its quarterly cash dividend by 7.7% to 70 cents per share, reflecting management’s confidence in the company’s earnings capacity and long-term capital return strategy.
Dividend Yield
Image Source: Zacks Investment Research
Apart from dividends, Annaly Capital also has a share repurchase plan in place. On Jan. 31, 2025, the company’s board of directors authorized a new common share repurchase program that allows repurchases of up to $1.5 billion of outstanding common stock through Dec. 31, 2029. However, the company has not repurchased shares under the program since its announcement.
Annaly Capital also enjoys a decent liquidity position. As of March 31, 2026, the company had $9 billion of total assets available for financing, including cash and unencumbered Agency mortgage-backed securities (MBS) of $5 billion. These assets can readily provide liquidity during periods of adverse market conditions or economic stress.
Given its strong liquidity profile, disciplined capital management initiatives and sizable allocation toward highly liquid Agency MBS, Annaly Capital appears well-positioned to sustain its dividend payments in the near term.
How NLY Compares With AGNC & STWD on Dividend StrengthNLY operates alongside peers such as AGNC Investment Corp. (AGNC - Free Report) and Starwood Property Trust, Inc. (STWD - Free Report) , which also prioritize shareholder returns through consistent dividend payouts.
AGNC Investment offers a dividend yield of 14.05% and maintains a payout ratio of 96%. It holds a solid liquidity position, with $7 billion in cash and unencumbered Agency mortgage-backed securities as of March 31, 2026. It also maintains flexible access to diverse funding sources and opportunistic financing, supporting portfolio adjustments.
Additionally, AGNC Investment has an active share repurchase program authorized for up to $1 billion through Dec. 31, 2026, with full authorization remaining available. The company plans to execute buybacks when its stock trades below tangible net book value, offering a potential buffer to shareholder value during volatility.
On the other hand, Starwood Property offers a dividend yield of 11.20% with a payout ratio of 127%. While the company has announced a $400 million share repurchase authorization in February 2026, its liquidity position remains relatively weak.
As of March 31, 2026, Starwood Property held $666.1 million in cash, cash equivalents and restricted cash against total debt of $23.1 billion. This narrow liquidity buffer raises concerns around financial flexibility and increases sensitivity to refinancing risk if macroeconomic conditions deteriorate.
Annaly Capital’s Price Performance & Zacks RankOver the past six months, NLY shares have gained 15.1% compared with the industry’s growth of 3.7%.
Price Performance
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Annaly Capital Management, Inc. maintains its $0.70 per-share dividend, supported by growing net interest spread and strong earnings coverage. NLY's net interest spread improved for the fourth consecutive time in the last year, reaching 1.07%, driven by lower financing costs and stable asset yields. NLY shares trade at a 9% premium to book value, reflecting improved spreads and expectations of future rate cuts benefiting MBS investors.
Dividend investors often start their search for stocks by looking at dividend yields. That's a logical move given their income focus, but there's a risk that yield becomes more important than other factors that can also have a material impact on an investor's long-term results. Annaly Capital (NLY 0.04%) and AGNC Investment (AGNC +0.10%), with their huge double-digit yields, need extra careful vetting.
For reference, the S&P 500 index (^GSPC +0.50%) is yielding roughly 1.1% today. The average financial stock yields 1.5%. The average real estate investment trust (REIT) yields 3.6%. Mortgage REITs Annaly and AGNC yield 12.9% and 13.9%, respectively. Here are some key things to consider before buying either of these two mortgage REITs, and why you might prefer one over the other.
Image source: Getty Images.
What do mortgage REITs do? A property-owning REIT buys physical assets, such as office buildings, and then leases them to tenants. The core business of mortgage REITs like Annaly and AGNC is owning mortgage securities that have been pooled together into bond-like investments. In some ways, a mortgage REIT, which manages a portfolio of mortgage securities, is similar to a bond fund. Notably, both Annaly and AGNC highlight total return as a key goal.
This is important for dividend lovers. While most property-owning REITs focus on providing reliable, and often steadily growing, dividends, the dividend histories of Annaly and AGNC have been highly volatile. There have been long periods where dividends have steadily declined.
AGNC data by YCharts
If you are trying to live off the income your portfolio generates, neither of these two mREITs will be good choices for you, despite their massive yields. Worse, the stock prices of these mREITs have tended to follow their dividends both higher and lower. Overall, investors who spent the dividend have been left with less income and less capital. However, that does not mean that these companies are poorly run.
Investors that reinvested their dividends, focusing on total return, have been well rewarded. Both Annaly and AGNC have delivered total returns similar to those of the S&P 500 index. Notably, the return profiles of both mREITs differ from that of the S&P 500, so they may provide valuable diversification benefits for investors focused on asset allocation.
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Which is the better mREIT: Annaly or AGNC? Assuming you focus on total return rather than a consistent income stream, your choice between Annaly and AGNC will likely come down to one key preference. AGNC is fully focused on owning and managing its portfolio of agency mortgage securities. The term "agency" indicates that these mortgages are guaranteed by Fannie Mae, Freddie Mac, or Ginnie Mae. The key is that there is no credit risk associated with such loans. That said, the portfolio's value fell 5.6% in the first quarter of 2026. That resulted in a negative 1.8% economic return for investors, as the $0.50 per share drop in book value more than offset the $0.36 in dividends paid in the quarter. Diversification has its benefits.
Annaly's business is heavily focused on its portfolio of agency mortgage securities, but it also operates two other lines of business. Annaly's residential credit business oversees a portfolio of non-agency mortgages. It makes loans, securitizes loans, and manages a portfolio of loans. Annaly also operates a mortgage servicing business, which simply collects fees for processing mortgage payments. It is a fairly consistent cash flow generator and provides some offset for the increased risk associated with the company's non-agency mortgage operation. In the first quarter, Annaly's economic return was 1.5%, with a book value decline of $0.39 per share more than offset by dividends of $0.70.
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At the end of the day, investors seeking exposure to agency mortgage-backed securities will likely prefer AGNC Investment. Investors that focus on diversification, however, will probably lean toward Annaly and its more diverse business model.
Make sure you know what you own Annaly and AGNC have double-digit yields, but neither is a particularly reliable dividend stock. That should keep most dividend investors on the sidelines. However, they both have solid total return histories, with AGNC being the more focused business and Annaly the more diversified operation. If you are using an asset allocation approach, either of these two mREITs could be a good fit for your portfolio. Your choice between them will likely boil down to your diversification preferences.
Annaly Capital faces potential NAV erosion from rising rates and term spread compression but currently trades near its historical valuation premium versus peers. Lower hedge ratios have increased NLY's interest rate sensitivity, worsening the outlook if policy rates rise or stay elevated. Ongoing equity issuance dilutes shareholders but is partly offset by redeployment into higher‑yielding assets instead of lower‑yield agency MBS.
Annaly Capital Management (NLY - Free Report) closed at $21.85 in the latest trading session, marking a +1.16% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.22% for the day. Elsewhere, the Dow saw an upswing of 0.72%, while the tech-heavy Nasdaq appreciated by 0.21%.
Shares of the real estate investment trust have depreciated by 5.68% over the course of the past month, underperforming the Finance sector's gain of 1.12%, and the S&P 500's gain of 6.04%.
The upcoming earnings release of Annaly Capital Management will be of great interest to investors. It is anticipated that the company will report an EPS of $0.74, marking a 1.37% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $488 million, up 78.62% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $2.98 per share and a revenue of $1.93 billion, demonstrating changes of +2.05% and +69.62%, respectively, from the preceding year.
It is also important to note the recent changes to analyst estimates for Annaly Capital Management. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Annaly Capital Management presently features a Zacks Rank of #3 (Hold).
Investors should also note Annaly Capital Management's current valuation metrics, including its Forward P/E ratio of 7.25. This represents a discount compared to its industry average Forward P/E of 8.75.
Investors should also note that NLY has a PEG ratio of 6.59 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the REIT and Equity Trust industry stood at 1.87 at the close of the market yesterday.
The REIT and Equity Trust industry is part of the Finance sector. This group has a Zacks Industry Rank of 214, putting it in the bottom 13% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
Mortgage real estate investment trust (REIT) Annaly Capital (NLY 0.04%) has a shockingly large 12.9% dividend yield. For reference, the S&P 500 index (^GSPC +0.50%) has a yield of just 1.1% today. The average REIT has a yield of 3.6%. If you are looking at Annaly's juicy yield today, you need to be worried about interest rates.
The next rate move could be higher While consumers appear to be worried about a recession, tightening their budgets, inflation is running hot. Rising inflation could force the Federal Reserve to increase interest rates. A key part of Annaly Capital's business model is to borrow money short-term so it can buy long-term mortgage securities. If rates rise, the company's interest costs go up even though its interest income doesn't change. That would leave less money to pay dividends.
Image source: Getty Images.
To protect itself from interest rate volatility, the company hedges its portfolio. At the end of the first quarter of 2026, 87% of the portfolio was hedged, down from 90% at the end of 2025 and 95% in the first quarter of 2025. The company's hedging covers a range of different time periods, from short-term to long-term; the majority of its activity (45%) is at the short end.
Protecting the dividend is a complicated job Annaly assumed "a conservative hedge profile throughout the quarter given elevated rate and macro volatility." None of the first quarter's uncertainty has receded at this point, so it is highly likely that the mortgage REIT is still taking the same conservative approach. That's a positive for investors looking at the stock, since it suggests that Annaly will be able to continue paying its dividend in the near term even if rates change dramatically.
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That said, long-term dividend investors should tread with caution here. While Annaly's yield is attractive, the dividend has a history of volatility. The company is well-respected, but the real investment story is total return, which requires dividend reinvestment. In fact, from a total return perspective, the stock has outperformed the S&P 500 since Annaly's initial public offering. However, the dividend and stock price are both lower today than they were 10 years ago. In other words, if you spent the dividend, you would have been left with less income and less capital.
Safe for now, risky over the long term The big-picture story is that Annaly appears to be taking a prudent approach to its portfolio, actively hedging its near-term interest rate risk. That should allow it to support its dividend through the current market uncertainty, even if that uncertainty leads to rate changes. However, if you are a dividend investor using dividends to pay for living expenses, that still isn't enough to make this ultra-high-yield mREIT a reliable choice for long-term income.
Annaly Capital Management preferred shares, particularly NLY-G, are among the sector's least risky but currently trade at unattractive valuations. NLY-G offers an 8.22% yield but a negative yield to call, making it less compelling than baby bonds or other preferreds with higher yields and better risk profiles. The low floating spread on NLY-G means dividend income could fall sharply if short-term rates decline, amplifying downside risk in a rate-cut scenario.
Annaly Capital Management (NLY - Free Report) closed at $20.96 in the latest trading session, marking a -1.23% move from the prior day. This change lagged the S&P 500's 0.3% gain on the day. Elsewhere, the Dow lost 0.16%, while the tech-heavy Nasdaq added 0.86%.
Prior to today's trading, shares of the real estate investment trust had lost 6.15% lagged the Finance sector's gain of 1.34% and the S&P 500's gain of 1.92%.
The upcoming earnings release of Annaly Capital Management will be of great interest to investors. The company's upcoming EPS is projected at $0.74, signifying a 1.37% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $488 million, up 78.62% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.98 per share and a revenue of $1.93 billion, signifying shifts of +2.05% and +69.62%, respectively, from the last year.
Any recent changes to analyst estimates for Annaly Capital Management should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Annaly Capital Management is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Annaly Capital Management has a Forward P/E ratio of 7.13 right now. This expresses a discount compared to the average Forward P/E of 8.55 of its industry.
We can also see that NLY currently has a PEG ratio of 6.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The REIT and Equity Trust industry had an average PEG ratio of 1.46 as trading concluded yesterday.
The REIT and Equity Trust industry is part of the Finance sector. This group has a Zacks Industry Rank of 211, putting it in the bottom 14% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow NLY in the coming trading sessions, be sure to utilize Zacks.com.
NEW YORK--(BUSINESS WIRE)--The Board of Directors of Annaly Capital Management, Inc. (NYSE: NLY) (“Annaly” or the “Company”) increased the second quarter 2026 common stock cash dividend to $0.75 per common share. This dividend is payable July 31, 2026, to common shareholders of record on June 30, 2026. The ex-dividend date is June 30, 2026.
“We are pleased to announce an increase in our common stock dividend from $0.70 to $0.75 per share, underscoring the strong performance of Annaly’s diversified housing finance portfolio and our focus on driving shareholder value,” remarked David Finkelstein, Chief Executive Officer & Co-Chief Investment Officer. “Our platform continues to deliver durable cash flows and superior risk-adjusted returns, enabled by our disciplined portfolio construction, proactive hedging and prudent capital structure.”
About Annaly
Annaly is a leading diversified capital manager with investment strategies across mortgage finance. Annaly’s principal business objective is to generate net income for distribution to its stockholders and to optimize its returns through prudent management of its diversified investment strategies. Annaly is internally managed and has elected to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. Additional information on the company can be found at www.annaly.com.
Forward-Looking Statements
This news release and our public documents to which we refer contain or incorporate by reference certain forward-looking statements which are based on various assumptions (some of which are beyond our control) and may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,” “will,” “should,” “estimate,” “project,” “believe,” “expect,” “anticipate,” “continue,” or similar terms or variations on those terms or the negative of those terms. Actual results could differ materially from those set forth in forward-looking statements due to a variety of factors, including, but not limited to, changes in interest rates; changes in the yield curve; changes in prepayment rates; the availability of mortgage-backed securities and other securities for purchase; the availability of financing and, if available, the terms of any financing; changes in the market value of our assets; changes in business conditions and the general economy; our ability to grow our residential credit business; our ability to grow our mortgage servicing rights business; credit risks related to our investments in credit risk transfer securities and residential mortgage-backed securities and related residential mortgage credit assets; risks related to investments in mortgage servicing rights; the our ability to consummate any contemplated investment opportunities; changes in government regulations or policy affecting our business; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; our ability to maintain our exemption from registration under the Investment Company Act of 1940; and operational risks or risk management failures by us or critical third parties, including cybersecurity incidents. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law.
Annaly Capital Management (NLY +2.80%) already offers a monster 12.7% dividend yield. That's more than 10 times higher than the S&P 500's 1.1% yield. It's now boosting that payout by another 7.1%.
Here's a look at how the real estate investment trust (REIT) focused on residential mortgages can afford its big-time yield and whether investors should buy it for income.
Image source: Getty Images.
Another raise Annaly Capital Management recently declared its latest dividend. The mortgage REIT will pay $0.75 per share on July 31 to investors who hold shares as of June 30. That's a 7.1% raise from the $0.70 per share it paid last quarter. It will boost the REIT's forward dividend yield to 13.6% at its recent share price. In commenting on the increase, CEO David Finkelstein stated that it underscores "the strong performance of Annaly's diversified housing finance portfolio and our focus on driving shareholder value."
The dividend increase follows Annaly's steadily improving earnings. The company reported $0.76 per share of earnings available for distribution (EAD) during the first quarter. That was up from $0.74 per share last quarter and $0.72 per share in the prior year period. It's a continuation of the improvement in the REIT's earnings over the past few years:
Data source: Annaly Capital Management. Chart by the author.
With its earnings rising, ample investment opportunities in the current market environment, and a strong financial profile, Annaly now has the confidence to increase its dividend. It's the REIT's second raise in the past 18 months. However, the dividend remains well below its peak due to a series of cuts in prior years.
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Diversification is paying dividends Annaly's investment strategy differs from that of other residential mortgage REITs, such as AGNC Investment. Whereas AGNC Investment only invests in Agency MBS (mortgage-backed securities guaranteed against credit losses by government agencies such as Fannie Mae), Annaly also invests in residential credit (non-agency residential mortgage assets) and mortgage servicing rights (MSR).
That diversification gives it the flexibility to invest where it sees the best opportunities. For example, Annaly ended the first quarter with $92 billion in Agency investments, down marginally from the year-end level. The REIT opportunistically repositioned the portfolio during the quarter by rotating out of higher-yielding MBS and into lower-yielding MBS, which it expects will provide more durable cash flows. Meanwhile, it raised $510 million of equity during the quarter to capitalize on opportunities to grow its residential credit and MSR portfolios. It expanded its residential credit portfolio by 30% to $10.3 billion in the quarter, while its MSR portfolio grew by 9% to $4.2 billion. The company expects to continue growing these platforms.
A higher risk, higher reward income stock Annaly Capital's diversification strategy is paying off. The REIT is capitalizing on opportunities to grow its residential credit and MSR portfolios, helping drive earnings growth. That's enabling the REIT to increase its dividend. While Annaly is a higher-risk income stock (it has cut its dividend many times in the past), it's a good option for more risk-tolerant investors looking to buy income.
Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
AGNC Investment (AGNC +0.10%) is a mortgage real estate investment trust (REIT). This is a complex niche of the broader REIT sector that requires a bit more research to fully understand. All REITs pay out a material portion of their earnings as dividends to avoid corporate-level taxation, which basically forces them to sell shares to fund their growth. But the mREIT model changes the dynamic of stock sales in an important way.
What does AGNC Investment do? AGNC Investment owns a portfolio of mortgage securities. It manages that portfolio, generating an income stream that it uses to pay its dividend. The dividend yield is a lofty 13.7% today, which is likely what most investors are focused on when they buy the stock.
Image source: Getty Images.
In some ways, AGNC is similar to a mutual fund. One important similarity is that, like a mutual fund, AGNC Investment reports the value of its business. For a mutual fund, that number is called the net asset value (NAV), and it is reported daily. AGNC Investment reports its tangible net book value per share, which is roughly similar to an NAV, on a quarterly basis.
AGNC's tangible net book value is the per-share value of its mortgage securities portfolio. At the end of the first quarter of 2026, that number stood at $8.38. Investors paying more than that figure for the stock are paying a premium. The share price is more than $10, so that is exactly what is happening right now. This can actually be a good thing for shareholders if AGNC Investment is issuing new stock.
REITs pay out at least 90% of taxable earnings to avoid corporate taxation. To fund growth, REITs sell stock. But AGNC isn't buying buildings; it is buying mortgage securities. If it can sell stock for more than its tangible net book value per share, it is like finding free money. The mREIT can buy more new mortgage securities than it would otherwise be able to if stock buyers only paid what the existing portfolio was actually worth on a per-share basis. We know this because tangible net book value per share is based on the actual value of the mortgage securities AGNC owns, which trade daily. Buildings, by comparison, trade far less frequently, and their value is more subjective.
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AGNC is creating value, not diluting shareholders When a company sells new shares, it dilutes shareholders' ownership because the business's value is now spread across more shares. The hope is that the cash raised will be invested to increase the company's value, which may or may not happen. This is how investors should view most REIT stock sales. AGNC and other mortgage REITs are a little different.
If AGNC Investment sells shares for more than tangible net book value, the move is inherently beneficial to existing shareholders because of the unique dynamics of the mREIT niche. Of course, issuing shares below tangible net book value per share would have the opposite effect. Still, the mREIT's steadily rising share count isn't a concerning sign, as long as it continues to sell that stock at a price above its tangible net book value.
