Is NLY (Annaly Capital) a Good Dividend Stock? 23% Yield
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- เผยแพร่เมื่อ 16 มิ.ย. 2024
- Annaly Capital is probably one of the most popular high yield dividend stocks for people seeking income. I remember years and years ago reading financial magazines like Kiplinger pushing this stock as being a top pick for retirees seeking income. But given this year’s market conditions, as of the making of this video their stock today now yields over 23%. The share price of Annaly has also fallen significantly more than the S&P 500 and really most other companies in the same sector. Considering the huge discount, I thought in today’s video it would be a good idea to take a look at Annaly Capital and try to determine if this stock is worth considering and where this company might be headed going forward.
Annaly Capital Management, ticker NLY, is a capital manager with investment strategies all across mortgage financing. They hold investments in agency mortgage-backed securities, mortgage servicing rights, agency commercial mortgage-backed securities and other types of MBS’s. Annaly’s structured as a mortgage real estate investment trust, meaning that 90% of the companies earnings have to be paid to shareholders in the form of dividends. This explains how many REITs and especially mREITs have such high dividend yields. Many were yielding around 8 and 10% before 2022 whereas now we’re seeing mREITs yielding 12 to 15%, or in Annaly’s case, even over 20% in certain situations.
#dividends #dividendinvesting #dividendstocks
Just scooped up more shares of ABR and RC. Great videos! Thanks for all you do!
Great video as usual mr Allen. Yeah we dropped NLY about a year ago jumped on Hercules Instead
Good choice
Thanks for the upload dividend bull!
Thanks very much for this detailed and helpful analysis! 👍
I've been alternating between buying NLY when I'm short on cash and O when I have extra to spend. It's continued to be recommended as a hold, or buy on most websites that I've checked.
Always appriciate your analysis.
I like that website for looking at a stocks financials, hadn't heard of it before, good looking out.
Was gunna say it’s just another orc trap but you covered it lol. I’m glad I tested one of my strats for orc on a paper account. Cause nothing can recover when they go into reverse split status. Same as any penny stock scam. These yields are too hot IMO and if you buy into it, you’re just asking for trouble
Another great vid bud your no fluff method of education is definatly my favorite on youtube. When you get the chance I'd LOVE to see you cover SVOL from simplified investing
GREAT video
Loved summary!
Excellent analysis! Thanks!
Great analysis. Thanks!
Thank you for your great video!!!
I appreciate the analysis
Great analysis.
Great content, I just subscribed
Very educational video
Great video !!! thank you....
Great video. Can you do a monthly dividend stocks and ETFs video.
Nice video, D. Bull. I do lovvve my Arbor Realty.
Arbor's reality is that it is unsustainable. ;)
Excellent review 👍🏽
Inquiries&Guide 📊
That's a high yield!
One mistyped Google video search and suddenly I'm learning about stocks.
I have NLY on my dividend stock portfolio, even tho it's super risky currently I will take that chance
Great video, I came to the same conclusion. When I got notice of the stock split I put NLY on my alert list to sell when if there are anymore alarms. As a result of the reverse split I sold half my interest what's left is less than 30 shares. I suspect I may need to take a lost after the next fed rate hike if it's another 75 base points.
Not about MREITS, but Book Value. How do you interpret a book value tha'ts been declining and even gone below 0? The example is Altria which i know you mentioned here before and maybe even own? Can't really see anything leaning towards a dividend cut or reverse split in that company so how should i look at this negative book value in a stock?
Would you mind to make video about "Medical properties trust?" Thanks for content ✌🏻
Could you please provide an update on this? Their book value looks like it's the same over the last 2 quarters (which would appear to be a bit of an improvement) and the dividend yield is currently 14.61%, which makes it difficult to just ignore.
It would be nice to get an update, but I wouldn't hold my breath waiting for it.
I happened to know NLY business very well, so I can tell if these videos are spinning the tale or not.
This guy is not wrong about NLY. Clearly, he understands the business, but he is very selective with his analysis. It's not exactly cherry picking, but it's close.
For instance, he is talking about NLY's bad performance but he doesn't compare it to every other mReit's performance. They all crashed and burned, because a) a low-rate environment lasting for a decade, and b) sharp rate increases causing the cost of hedging going through the roof.
He talks about NLY increasing leverage. Yes, they did that, but 5 years ago NLY's leverage used to be 10X and now it's around 6.5. To say that it's a great concern that they are increasing leverage by a few percentage points when it's almost half of what it used to be is kind of silly.
He completely misunderstood the reverse split. NLY just got added to S&P Mid Cap index. There are a lot of investment firms that create their own custom index-based portfolios. Kind of like ETFs. If the stock price is below $5, those institutions do not buy them. Nothing changed fundamentally in NLY's business at that time. They did the reverse split to get away from that $5 price. I actually looked it up. There was a massive buying of the stock after the split, not just by ETFs but by those investment firms.
Another thing. At the time when this video was shot, the price was below $16. It is now hovering around $20. It's not exactly a great recovery, but it's not insignificant either.
My advice to the shareholders. Wait for the last rate hike and then watch the stock for 2-3 quarters. If earnings won't improve, then I would admit that the management is not doing a good job. But if it is doing a good job, I expect the share price to increase by at least 25%. Not the dividend, though. At this point, as ridiculous as it may sound, this mReit becomes a growth stock.
Can you please make video on MPW and OHI?
Great video as always. Can we get a video of your portfolio or at least your top 5 holdings? Thank you!!
I was thinking the same thing
Thanks for the great info!!!
What do you think about ARI and BRMK ?
Both unsustainable. Ari pays way more than EPS and has a lot of liability. BRMK pays out more than its EPS.
Great video, you've taught me so much about div investing, thanks loads
Love your videos!! Would you consider a vid on DX capital?? Not much out there on this stock would love to see you cover it!
Unsustainable. Way more debt than equity.
Two is about to do a reverse split as well at the end of the month
So if I get shares in this put them in a Roth ?
Aside from performance, I was hoping you were going to dive into how the company borrows short term and buys long term mortgages in order to leverage the interest earned. Given the current interest environment of flat to inverted yield curve, you can quickly see why their book value is deteriorating. The net interest margin is either thin or negative, so they are reinvesting capital at much lower returns.
Wow the bot actually replied to itself.
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NLY and AGNC are similar but I will go with AGNC since its a monthly payer and they have 4B of equity
I would watch out with AGNC as it looks like a pretty similar case to what is happening with the stock bull talking about.
@@oceantrident Thanks and I agree. One thing also is that AGNC's book value is much stable then NLY. but people should take caution. thanks for the advice !
@@soundstudio1010 NLY would offer your more payout, but you would have to wait three months and have your account set to transfer every month (to make it simulate a monthly dividend payer).
What do you think of AGNC?
Do the dividends per share also increase when a reverse share split happens or do they stay the same?
Yes it went up 4x
Lol I bought 100$ worth yesterday. Get it while it’s cheap and hold it for life
Exactly what I was looking for. Thank you
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Agnc has a great yield
You own AGNC❓
But horrible EPS and horrible balance sheet.
It has been declining faster than the Div is piling up
Wait... So whenever their stock starts plunging they can just do a reverse stock split? And they can keep doing that along with cutting the dividend? This way basically their stock price can never go down to $1 or under. How is that even legal??
@dividend Bull could you do a video on PSEC?
Good stock. Pays within EPS and has a good balance sheet.
Can you do a video on CLM its a American company 19% dividend under $10
CLM is not a good stock. It pays way more than its EPS and has a lot of liability compared to its equity. It is unsustainable.
"for most people that would cover your mortgage" lol, for me that's triple my monthly bills
Focus on leverage. They are requited by tax law to pay out substantially all of their earnings as a consideration for avoiding double taxation.
It's true they have low credit risk as the securities they own are mostly guaranteed by the US government. But, they have to mark to market their holdings which has consequences with the banks which give them lines of credit to leverage up their balance sheet.
Periods of disintermediation and abnormalities in how credit markets function in times of crisis can have cataclysmic consequences in difficult times.
Stock performance should be indicative enough.
It's basically not a good business model, and certainly not for a retiree looking at this pronounced dividend stream as something remarkable.
Look at payout, earnings grow, diversity of earnings, and lastly yield. If you can make those numbers work, cut your expenses.
But doing the math on the dividend and its effect on decreasing the cost basis. Say the stock is $19.00/share right now. Buy 100 shares for $1,900.00. Per year right now you'd make $260.00/year. In five years you have $1,300 in dividend payments bringing your cost basis down to $6.00/share. In no time after that you at $0.00 on cost basis and it's all profit. Even considering some dividend decreases over that time...what am I missing??????? Also with at least 100 shares owned you could sell covered calls to further lower that cost basis.
Can you do one on MPW? It has a over 10% yield with its current price, appears to grow it's dividend and no cuts (at least recently) (I am writing this from memory of initial cursory research with intention to do thorough DD)
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Got out of NLY. I don’t trust the dividend will stay at .88.
Which is kind of odd considering it has a good balance sheet.
@Dividenbull What is your portfolio? Can we get an idea so we can copy your investing.
I agree
Honestly, if I were him I doubt that I do that. I would share some of what's in my portfolio but no I'd never show the entire thing to the general public. One should never discuss details of one's finances with strangers. It's not in your best interest.
I am against this. We should all work hard to create our own, not mooch.
Hasn’t it already been established in several videos over the past few months that NO is the answer? I’ll put it on in the background but something you haven’t covered, like GGM or CLM would be more appreciated. 🙂
NLY is a disaster. 10K invested TYD turns into $6,095.
I'm warming up to GOF down 8.75% for the yr, it seems to do great in down market, rising rate times.
10K invested is only down to $9,125 and with the recent monthly div you'd have $1,058 for 10 mo. Should be a keeper if the market goes sideways for 5 or 10 yrs.
SPY is down 24.41%.
So, in summary, NLY is a poor investment.
hmmm 🙄 someone spent 2M on Nov18 calls with $19 strike
The name of this company always confuse me as a european...
No, it sucks. Negative dividend growth, negative cap gains.
It has a good EPS and a good balance sheet. It would just take a while to wait for because it pays out every three months and if it cuts its dividend, there is a chance that you would have to wait two month and the third month, it would cut it. Better to go with a monthly payer dividend stock.
@@wewhoareabouttodiesaluteyo9303 $1.2 is a good EPS? What?
Whether it pays monthly or whatever is irrelevant.
@@smudboy EPS can tell somewhat that a stock can pay out its dividend; although, it can change from time to time.
On balance sheets: equity to liability ratio is telling of whether a company is good or bad as well. Additionally, return on equity tells whether investors will likely invest in it.
If it pays quarterly and the business decides to cut the dividend within the months it does not pay a dividend, then the share price will drop by the time it gets to its ex dividend.
It has been stated that a monthly dividend stock is actually more sustainable than quarterly dividend stock and much more sustainable than purely growth stocks.
@@wewhoareabouttodiesaluteyo9303 (NI - PD) / AOCS tells me next to nothing as to whether the next dividend will pay out.
1. $1.2 is not a good EPS. That's just a cheap stock.
2. The higher a company's EPS, the more profitable it is considered to be.
Monthly dividends are not more or less sustainable than quarterly. The most long lived companies (dividend aristocrats, kings, etc.) nearly all pay quarterly.
@@smudboy Well, at least you agree that the higher the EPS, the more profitable a company is considered to be.
So that must mean that if an EPS is MORE than the dividend it pays out annually; most of the time, it has to be sustainable.
NLY is a good stock, but it is not that great in reality. The yield it gives when buying shares up to $1000 will only yield like $17/month. I was shocked at first, but then I was like "Well, one could buy a monthly dividend payer that yields that much monthly on $1000. 17 x 12 = $204. $204/1000 = 20.4% yield.
One has to watch out for quarterly dividend stock. They look like they pay a lot, but if you want to figure it out monthly, it comes out to dividend/3.
All stocks work that way buddy
@@fanban2926 All stocks do not pay quarterly.
Duh?
@@antoniopalmiero6761 Not duh. Many people do not know this.
@@wewhoareabouttodiesaluteyo9303 This people have to study, how you caninvest and not know this?
You said you don’t lose anything when a company does a reverse split, but don’t they charge you a reorganization fee, and they buy back the fractional shares. If the fractional shares are bought back while the stock price is falling, which seems to be when most reverse splits are done, you lose the difference.
Reorganization fee + if your broker does not like fractional shares, they pay you out what it is worth (so a loss there) and if the stock continue to decline (loss there). You are right. If a stock reverse splits, it is basically done for.
i had 310 shares but now its 82 whats wrong with these guys??
Reverse Split !
No
guess its piece of shit now
But to much talk but didn’t tell if it a good or bad buy? Lame video. Didn’t give his reason to but or not.
It just did a reverse stock split and continues to drop. I think that we're heading into a depression. I don't think that its worth investing in anything right now.