What Makes Annaly Different?

With shares of Annaly Capital Management (NYSE:NLY) trading at around $15.31, is NLY an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

dividendsAnnaly is a REIT that owns, manages, and finances a portfolio of real estate related investments in the United States. As a REIT, 90 percent of the company’s taxable income must be distributed to stockholders. If you’re not familiar with REITs and this is news to you, then you might be smiling right now. If you’re not smiling, then perhaps your eyes widened. If that’s not the case, then you at least felt some positive energy.

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So… what makes Annaly different from other REITs? The first reason Annaly is different than most REITs is that it has made money in all types of economic environments, including different interest rate environments. A second reason Annaly is different is because it has remained very conservative in the current economic environment. It hasn’t gotten too carried away with leverage. This long-term approach is wise and should lead to sustainability. A third reason Annaly is different is that it yields 11.80, which is difficult to find.

There have been dividend cuts over the past few years, but that has been normal for the industry.

Let’s take a look at some important numbers prior to forming an opinion on this stock…