Is Annaly Capital Management the Best Dividend Stock for You?
The big number at real estate investment trust (REIT) Annaly Capital Management (NYSE: NLY) is its dividend yield, which at 13% is many times more than the 1.5% you would get from an S 500 index fund. It is also materially higher than the 4.4% you can get from the average REIT, using Vanguard Real Estate ETF as a proxy. These yield differences should get you wondering about what's going on with Annaly.
When most investors picture a real estate investment trust they probably think of a company that owns physical properties, leasing them to tenants to generate rental income. That's not particularly complex and is exactly what you would do if you owned a rental property. The only real difference is that REITs own large portfolios of institutional and commercial properties. Buying a REIT allows you to participate in a property arena that would probably be out of reach to you. Property-owning REITs are fairly attractive and, when operated conservatively, very reliable income stocks.
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Source Fool.com
