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1 Reason to Avoid Annaly Capital Management

By John Maxfield - Apr 8, 2013 at 1:57PM

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With this popular stock, it's critical to look beyond the double-digit dividend yield.

Annaly Capital Management (NLY 1.88%) is one of the most popular mortgage REITs in the country. It pays a double-digit dividend yield and invests only in mortgage-backed securities that are issued or insured by Fannie Mae or Freddie Mac. The net result is that, aside from interest rate risk, investors in Annaly can have their cake and eat it, too, receiving large quarterly checks in the mail without having to worry about credit risk. What's not to like?

In the video below, Motley Fool contributor John Maxfield discusses why, despite these things, investors should be wary of this stock.

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Stocks Mentioned

Annaly Capital Management, Inc. Stock Quote
Annaly Capital Management, Inc.
$6.50 (1.88%) $0.12
Chimera Investment Corporation Stock Quote
Chimera Investment Corporation
$9.73 (3.07%) $0.29

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