Is Annaly Capital a Millionaire Maker?
Far too often, investors believe they'll find a winning lottery ticket on Wall Street. Which is why stocks like Annaly Capital (NYSE: NLY) and its huge 13.5% dividend yield might have investors thinking that it will have them on a fast track to a seven figure portfolio. After all, the historical return of the stock market is around 10% or so, so 13.5%, compounded over time via dividend reinvestment, would be that much better. History suggests that an investment here won't work out as well as hoped.
There's no question that Annaly's massive dividend yield is attractive, particularly when you consider that the S 500 Index is yielding a scant 1.4% and the average real estate investment trust (REIT) nearly 4%, using Vanguard Real Estate Index ETF (NYSEMKT: VNQ) as an industry proxy. But there's usually a reason why a stock has such an outsized yield and, in the case of Annaly, it is important to understand the dividend back story.
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Source Fool.com
