The Numbers Don't Lie: This 14%-Yielding Dividend Is at Risk for Another Reduction
Annaly Capital Management (NYSE: NLY) currently offers a monster dividend yield. At 14%, it's 10 times higher than the S 500's 1.4% dividend yield.
However, the mortgage REIT's earnings during the first quarter were less than its dividend payment. That's a concern because the company has cut its payout in the past due to its inability to outearn its dividend. With market conditions growing more volatile in recent weeks, the dividend could be about to hit the chopping block again.
Annaly Capital Management recorded $0.64 per share of earnings available for distribution (EAD) during the first quarter. That fell short of its first-quarter dividend payment of $0.65 per share. The EAD shortfall is a concern. Annaly cut its dividend by around 26.1% last March due to its expectations that EAD would fall below its dividend level, which is exactly what happened:
Source Fool.com
