I’m no fan of publicly-traded REITs (Real Estate Investment Trusts), but this one is just too good to pass up.
It’s paying out a 12% dividend and its valuation is absurdly low.
With interest rates declining for large institutional money, the spread (profits) for the largest U.S. mortgage REIT is where I plan to start a new position for additional income for my family fund.
This company has historically outperformed the S&P 500 by over 2x!
For its competitors in the mortgage market, since 1997, they’ve beaten them by 4x!
Their business is extremely simple: they invest in commercial and residential real estate mortgages.
They borrow money cheaply like a bank and then earn income on the spread between the yield on their investments and the cost of their borrowing.
They have $135 billion in assets and less than 200 employees!
It’s brilliant; you get all the earnings and profits of a bank without a single branch, customer deposit, or really any of the expenses associated with running a physical bank.
Now, of course, it’s not a bank; they actually set themselves up as a REIT, which means they aren’t paying taxes on that beautiful 12% dividend they are paying us.
For 22 consecutive years, they’ve paid out a healthy dividend.
**REITs have to distribute 90% of their income directly to shareholders***
$18 billion in dividends have been paid out since their inception.
New Stock Suggestion: Annaly Capital Management (NYSE: NLY).
Consider buying shares up to $8.99 and enjoy a 12% dividend.
NLY will pay you $1 per share in dividends this year. Today, the stock trades for $8.35, so if you buy today, you’ll receive 11.98% on your money.
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The stock is down big and rates are about to fall for the banks, but not really so much for the average borrower that’s buying a home. This means NLY’s profits are about to increase.
The best part is that if you take their book value, its liquidation value is currently $10.05 per share, which means we are buying this cash flow investment cheap.
I’m no fan of public REITs, but this one is trading so cheaply that it’s honestly the best deal out there for real estate-backed income.
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. We have not been compensated in any way, have no relationship to the company, and did not contact anyone from Annaly Capital Management to speak with them regarding our unpaid coverage. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.