Latest news with #incomestock
Yahoo
3 days ago
- Business
- Yahoo
Is Annaly Capital Management Stock a Millionaire Maker?
Key Points Annaly Capital Management is a mortgage REIT. The stock has an astonishingly large 13%+ yield. Annaly Capital is not a particularly attractive income stock, but it could still help some investors build seven-figure portfolios. 10 stocks we like better than Annaly Capital Management › The S&P 500 index is currently offering a slim little 1.2% yield. The average real estate investment trust (REIT) is yielding around 3.9%. Annaly Capital Management (NYSE: NLY), a mortgage REIT, is offering an over 13% dividend yield today! While you shouldn't buy Annaly Capital if you are looking for a reliable income stream, it can still be a key part of a millionaire-maker portfolio. Here's what you need to know. Annaly Capital is not a reliable income investment Annaly Capital will probably pop up on most dividend screens given the huge yield it offers. But yield alone is not a good reason to buy this stock, particularly if you need the income your portfolio generates to pay for living expenses. A simple graph can illustrate the issue. Notice the volatility of the dividend and how the stock price tends to track along with the dividend, up and down. Although the dividend was just increased, the longer trend here is downward. So, dividend investors who bought a decade ago because of a lofty dividend yield have ended up with less income and less capital. Not ideal for a dividend-focused investor. The problem is with the fact that Annaly is a mortgage real estate investment trust (REIT). This is a fairly complex niche of the broader REIT sector. Annaly basically buys mortgages that have been pooled into bond-like securities. Mortgages get repaid over time, with a portion of the payment covering interest expenses and a portion reducing the principal of the mortgage. So the huge yield here effectively results in the shrinking of the REIT's portfolio over time, thanks to the principal repayments. On top of that, you can add the impact of interest rates, housing market dynamics, and even mortgage repayment trends. Annaly is not a bad investment Here's the thing -- Annaly Capital actually does a fairly good job of achieving its goal. That goal, however, is generating an attractive total return. It is not focused on income, even though the dividend plays an important part in the story. The key is that in order to fully benefit from this REIT's approach, you have to reinvest the dividend, not spend it. As the chart above shows, Annaly's total return is roughly similar to that of the S&P 500 index over time. However, the chart highlights that the return profile has been different. That makes Annaly a very attractive option for investors looking to create a diversified asset allocation portfolio. Essentially, adding Annaly to an asset allocation portfolio can provide investors with returns that aren't directly tied to the general performance of the stock market. Or, to put it a different way, when stocks zig, Annaly could be zagging. The end result is a better total return for the overall portfolio. But if you spend the income this REIT throws off, you won't be able to fully benefit from this fact. Is Annaly a millionaire-maker stock? Annaly Capital probably isn't a millionaire-maker stock all on its own. But as a part of a larger asset allocation portfolio, this total return-focused mREIT could help you build a seven-figure nest egg. The other big takeaway here, however, is that Annaly is far more complex than a property-owning REIT, and most income-focused investors should probably avoid it despite the huge dividend yield it offers. Should you invest $1,000 in Annaly Capital Management right now? Before you buy stock in Annaly Capital Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Annaly Capital Management wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is Annaly Capital Management Stock a Millionaire Maker? was originally published by The Motley Fool
Globe and Mail
3 days ago
- Business
- Globe and Mail
Is Annaly Capital Management Stock a Millionaire Maker?
Key Points Annaly Capital Management is a mortgage REIT. The stock has an astonishingly large 13%+ yield. Annaly Capital is not a particularly attractive income stock, but it could still help some investors build seven-figure portfolios. 10 stocks we like better than Annaly Capital Management › The S&P 500 index is currently offering a slim little 1.2% yield. The average real estate investment trust (REIT) is yielding around 3.9%. Annaly Capital Management (NYSE: NLY), a mortgage REIT, is offering an over 13% dividend yield today! While you shouldn't buy Annaly Capital if you are looking for a reliable income stream, it can still be a key part of a millionaire-maker portfolio. Here's what you need to know. Annaly Capital is not a reliable income investment Annaly Capital will probably pop up on most dividend screens given the huge yield it offers. But yield alone is not a good reason to buy this stock, particularly if you need the income your portfolio generates to pay for living expenses. A simple graph can illustrate the issue. NLY data by YCharts. Notice the volatility of the dividend and how the stock price tends to track along with the dividend, up and down. Although the dividend was just increased, the longer trend here is downward. So, dividend investors who bought a decade ago because of a lofty dividend yield have ended up with less income and less capital. Not ideal for a dividend-focused investor. The problem is with the fact that Annaly is a mortgage real estate investment trust (REIT). This is a fairly complex niche of the broader REIT sector. Annaly basically buys mortgages that have been pooled into bond-like securities. Mortgages get repaid over time, with a portion of the payment covering interest expenses and a portion reducing the principal of the mortgage. So the huge yield here effectively results in the shrinking of the REIT's portfolio over time, thanks to the principal repayments. On top of that, you can add the impact of interest rates, housing market dynamics, and even mortgage repayment trends. Annaly is not a bad investment Here's the thing -- Annaly Capital actually does a fairly good job of achieving its goal. That goal, however, is generating an attractive total return. It is not focused on income, even though the dividend plays an important part in the story. The key is that in order to fully benefit from this REIT's approach, you have to reinvest the dividend, not spend it. NLY Total Return Level data by YCharts. As the chart above shows, Annaly's total return is roughly similar to that of the S&P 500 index over time. However, the chart highlights that the return profile has been different. That makes Annaly a very attractive option for investors looking to create a diversified asset allocation portfolio. Essentially, adding Annaly to an asset allocation portfolio can provide investors with returns that aren't directly tied to the general performance of the stock market. Or, to put it a different way, when stocks zig, Annaly could be zagging. The end result is a better total return for the overall portfolio. But if you spend the income this REIT throws off, you won't be able to fully benefit from this fact. Is Annaly a millionaire-maker stock? Annaly Capital probably isn't a millionaire-maker stock all on its own. But as a part of a larger asset allocation portfolio, this total return-focused mREIT could help you build a seven-figure nest egg. The other big takeaway here, however, is that Annaly is far more complex than a property-owning REIT, and most income-focused investors should probably avoid it despite the huge dividend yield it offers. Should you invest $1,000 in Annaly Capital Management right now? Before you buy stock in Annaly Capital Management, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Annaly Capital Management wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025
Yahoo
21-07-2025
- Business
- Yahoo
Chemical Industries (Far East) (SGX:C05) Is Reducing Its Dividend To SGD0.005
The board of Chemical Industries (Far East) Limited (SGX:C05) has announced that the dividend on 18th of August will be reduced by 67% from last year's SGD0.015 to SGD0.005. This payment takes the dividend yield to 3.0%, which only provides a modest boost to overall returns. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Chemical Industries (Far East)'s Distributions May Be Difficult To Sustain The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. Chemical Industries (Far East) isn't generating any profits, and it is paying out a very high proportion of the cash it is earning. This is quite a strong warning sign that the dividend may not be sustainable. Looking forward, earnings per share could 32.5% over the next year if the trend of the last few years can't be broken. This will push the company into unprofitability, which means the managers will have to choose between suspending the dividend, or paying it out of cash reserves. View our latest analysis for Chemical Industries (Far East) Dividend Volatility The company has a long dividend track record, but it doesn't look great with cuts in the past. The payments haven't really changed that much since 10 years ago. We're glad to see the dividend has risen, but with a limited rate of growth and fluctuations in the payments the total shareholder return may be limited. The Dividend Has Limited Growth Potential Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Chemical Industries (Far East)'s earnings per share has shrunk at 32% a year over the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. Chemical Industries (Far East)'s Dividend Doesn't Look Great To sum up, we don't like when dividends are cut, but in this case the dividend may have been too high to begin with. The company seems to be stretching itself a bit to make such big payments, but it doesn't appear they can be consistent over time. We don't think that this is a great candidate to be an income stock. Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 4 warning signs for Chemical Industries (Far East) (3 are concerning!) that you should be aware of before investing. Is Chemical Industries (Far East) not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
