What does interest coverage mean?

How many times the company's operating profit covers its interest bill.

How do you interpret interest coverage?

Higher is safer; below ~2× is a warning that earnings provide little cushion against the debt burden. Debt-free companies have no interest expense and the ratio is left blank.

How does interest coverage compare across companies?

Comparable across leveraged non-financials; less relevant for net-cash companies with negligible interest.

Annaly Capital Management NLY Interest coverage

Interest coverage at other companies

MFA FinancialMFA

1.3×0.0×

New York Mortgage TrustADAM

0.4×+0.3×

Chimera Investment Corp.CIM

1×—

EFC

Ellington Financial Inc.EFC

1.5×+0.1×

PennyMac Mortgage Investment TrustPMT

1.1×0.0×

Starwood Property TrustSTWD

1.3×0.0×

Other financials

Income statement

See full

Revenue$1.7B+31.0%

Net income$282.7M+128%

EPS (diluted)$0.33+120%

Balance sheet

See full

Cash & equivalents$1.9B+4.3%

Total debt$33.7M+19.8%

Total equity$16.3B+25.2%

Total assets$138.54B+31.8%

Cash flow

See full

Operating cash flow-$1.4B-797%

Valuation

See full

Market cap$16.27B+29.3%

Enterprise value$14.4B+33.9%

P/E7.5×-11.5×

P/S2.6×+0.1×

Profitability

See full

Net margin34.3%+21.2pp

Returns & leverage

See full

Return on equity14.9%+9.5pp

Debt / equity0×0.0×

Questions, answered.

What does interest coverage mean?: How many times the company's operating profit covers its interest bill.
How do you interpret interest coverage?: Higher is safer; below ~2× is a warning that earnings provide little cushion against the debt burden. Debt-free companies have no interest expense and the ratio is left blank.
How does interest coverage compare across companies?: Comparable across leveraged non-financials; less relevant for net-cash companies with negligible interest.