If You Invested $1,000 in Annaly at the Start of 2023, This Is How Much You Would Have Today
Real estate investment trust (REIT) Annaly Capital Management (NYSE: NLY) is offering investors a massive 13% dividend yield today. Before you start getting excited, there are a few important caveats to know about this investment. The two biggest are that dividends are really important and that you really can't rely on those dividends. Here's some graphs to help explain.
If you had purchased $1,000 worth of mortgage REIT Annaly stock at the start of 2023, roughly half way through the year your investment would be worth $985. That's not terrible, per se, but the same amount in the average REIT, using Vanguard Real Estate Index ETF (NYSEMKT: VNQ) as a proxy, would be worth roughly $1,000. So Annaly was a laggard.
However, if you add dividends into the mix, which is called total return, by assuming dividend reinvestment, Annaly starts to look a lot better. That $1k investment would be worth around $1,020 compared to roughly $1,030 for the average REIT, also assuming dividend reinvestment. Annaly's huge 13% yield does add value compared to the much smaller 4.3% yield offered by Vanguard Real Estate Index ETF.
Source Fool.com
