What Annaly's Big Dividend Cut Means for You

Anand Chokkavelu
Anand Chokkavelu, CFA
Sep 22, 2012 at 12:00AM
Other

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.