Better Dividend Stock: Annaly Capital vs. Realty Income
It's easy for a dividend investor to get so enamored of a huge dividend yield that they overlook other, equally important, investment factors. Real estate investment trust (REIT) Annaly Capital's (NYSE: NLY) huge 12%+ dividend yield is one that could easily distract you. Note that the S 500 index (SNPINDEX: ^GSPC) has a tiny little 1.2% yield, and the average REIT yield is around 3.9%.
Here's why you might be better off in the middle with Realty Income (NYSE: O) and its roughly 5.6% yield.
There are two broad types when it comes to real estate investment trusts. The first type, property-owning REITs, is fairly easy to understand. These companies do what you would do if you owned a rental property, just on a much larger scale. Buying properties and leasing them out to tenants, which is what Realty Income does, provides a broad perspective, of course, since there are a variety of different property sectors in which REITs can invest.
Source Fool.com
