Annaly Capital Management, Inc. just released its third quarter earnings and missed Wall Street estimates. The release missed widely on GAAP earnings and slightly on earnings available for distribution, or EAD. This REIT has been cutting its dividend recently.
Investors will want to consider the following before picking up this ultra-high yield dividend stock.
Annaly Capital could end up a winner if rates keep falling, but dividend investors still shouldn't buy it. Here's what you need to know.
Unlocking Massive 13% Yields By Busting Market Myths: Annaly Capital
Annaly Capital has a huge 13% dividend yield, but don't buy it for the yield because the stock may end up letting you down in the long run.
Dividend growth matters more than yield.
Annaly Capital Management's NLY-G preferred shares have a smaller floating spread compared to NLY-F and NLY-I, making them more sensitive to interest rate drops. I find mortgage REIT bonds more appealing than NLY-G shares due to their stable yield unaffected by Fed rate cuts. Preferred shares like NLY-G are lower in the capital structure, requiring higher yield or upside to justify the investment risk.
A price history so steady, it's practically mocking the rest of the market. The "call risk" here? A 1-2% dip. Enough to concern me because I hate losing money. Prices are unlikely to go much lower without a recession. 30 days' notice required before any call, easy math, and zero headaches. If you can count to 30, you're basically a dividend pro already.
Annaly Capital has a gigantic dividend yield of about 12.6%. The company's dividend has not been reliable over time.
The QT situation faced by the economy with interest rates has come to an end. You need to generate income in good and bad times - your portfolio must do this always. The goal is simple: income and capital gains over the long term.
Annaly Capital Management (NLY) closed the most recent trading day at $20.88, moving +0.38% from the previous trading session.
NLY's quarterly BV fluctuation was nearly exact, with a minor outperformance in core earnings/EAD. NLY had a good quarter overall, reporting a slightly less severe BV decline and increased core earnings/EAD. NLY remains in good shape to maintain its current quarterly dividend, with a valuation that's not "horrible" but not "great" either.