Annaly Capital Management (NLY), a mortgage REIT, is currently offering a headline dividend yield of 13% despite delivering total returns of only 6.4% per year over the past decade. While the attractive yield draws in dividend investors, the company has a history of slashing dividends, negatively impacting its stock price. As of January 15, 2023, investors who engaged in a short-term strategy realized a 13.5% total return after buying at $21.61 and selling at $23.83, highlighting the profitability of a “sell high” approach.
Market sentiment appears to be bearish, with the AAII bear sentiment reading recently hitting 52%. This pessimism, reflected in a consistently high fear indicator, may present buying opportunities for contrarian investors focusing on stocks like Cisco and Broadstone Net Lease, which have shown potential for quick gains. Additionally, investors might prefer monthly dividend payers with yields up to 16.2%, offering more frequent returns compared to NLY’s quarterly dividends.
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