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What Annaly's Big Dividend Cut Means for You

By Anand Chokkavelu, CFA – Updated Apr 7, 2017 at 12:50PM

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Up today, Anand Chokkavelu and Andrew Tonner discuss why investors shouldn't be too concerned about Annaly Capital's big dividend cut. The company reduced its quarterly payout from $0.55 to $0.50, pushing its yield down to 11.5% from 12.7%.

This is completely normal for the industry. Because REITs pay out 90% of their earnings as dividends, as earnings fluctuate, so, too, will will their dividend yields. Right now, the interest-rate spread is contracting for REITs, meaning investors can expect slightly lower but still generous dividend payouts.

Though this dividend cut is normal, there are still some crucial issues investors have to understand about Annaly's business model before buying the stock. In this brand-new premium research report on the company, our analyst runs through these absolute must-know topics, as well as the future opportunities and pitfalls of their strategy. Click here now to claim your copy.

Anand Chokkavelu and Andrew Tonner have no positions in the stocks mentioned above. The Motley Fool owns shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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Stocks Mentioned

Annaly Capital Management, Inc. Stock Quote
Annaly Capital Management, Inc.
NLY
$17.16 (-2.00%) $0.35
AGNC Investment Corp. Stock Quote
AGNC Investment Corp.
AGNC
$8.42 (-3.00%) $0.26
Chimera Energy Corporation Stock Quote
Chimera Energy Corporation
CHMR
$0.00 (%)

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