Is Ultra-High-Yield Annaly Capital Management Stock a Buy?
Despite a gigantic 12.6% dividend yield, Annaly Capital Management (NYSE: NLY) shouldn't be looked at as an income stock. That should bring up the question, "How could a high-yield real estate investment trust (REIT), which is basically designed to pass income on to investors, not be an income stock?" There's a lot to understand before you consider buying this niche REIT.
As noted, Annaly Capital Management is a REIT, a corporate structure that was designed to give small investors income generated from institutional-level real estate investment. In fact, REITs avoid corporate-level taxation as long as they pass at least 90% of their taxable income on to shareholders via dividends. (Dividends from REITs are taxed at an investor's regular income tax rate.)
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Source Fool.com
