1 Dividend to Buy, 1 Dividend to Sell

By Austin Smith | More Articles
December 22, 2011 | Comments (3)

The following video is part of our "Motley Fool Conversations" series, in which Andrew Tonner, technology editor and analyst, and Austin Smith, consumer goods editor and analyst, discuss topics across the investing world.

In today's edition, they continue their series, one dividend to buy and one dividend to sell in 2012. Austin buys 3M, the American industrial icon and dividend stalwart. On the flip side, Andrew sells Annaly Capital Management. Listen in as two of our analysts tell you exactly why one dividend deserves your time and another deserves the cold shoulder.

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Austin Smith and Andrew Tonner do not own shares of the companies listed above. The Motley Fool owns shares of Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of 3M and Annaly Capital Management. Motley Fool newsletter services have recommended creating a diagonal call position in 3M. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.

Report this Comment On December 22, 2011, at 6:27 PM, kobtan79 wrote:

Uh.. Uh... Kids...
In 'falling from 18 to 16', NLY paid out $2.60 in divs.
so total return was actually UP equivalent to 19 from current 16.5. and that was a Bad year.
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Report this Comment On December 22, 2011, at 6:31 PM, kobtan79 wrote:

oh.. forgot to add.
In that period 3M was Down from 88 to 80, less 2.50 div for a Negative return of 6%, while NLY was UP 6% if you include total reurn/divs on both.
the fed just said they're keeping rates low into 2014. so NLY looks OK for a while yet.
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Report this Comment On December 23, 2011, at 3:45 AM, DavidinNV wrote:

NLY is, and always will be, a dividend play, not a capital gains play. And when those 14-16% annual dividends go directly into an IRA or similar account, it's even better. On the one hand, you recommend selling NLY, while on the other hand you acknowledge the improbability, based on Fed statements, of a rate increase prior to some time in 2013. NLY has moved up smartly this week after declaring a smaller decrease in the Q4 dividend than had been predicted. Ex-Div will deliver a hit, of course, but there are almost no other segments where you can get this type of return from a company that is the blue-chip in its sector and whose leverage has now dropped to its lowest level in years. In my humble opinion, NLY and maybe one or two other MREITS will have a place in a balanced portfolio for at least the intermediate future.

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