I've been watching a stock pick given to me for the past 3-ish years with hope. Annaly Capital Mgmt seems to be a major capital investor where the primary benefit is the high (10+%) dividend return and a relatively safe pick.
I wanted to take a look at a couple other supposedly similar offerings by companies so I compared the following:
AGNC – AGNC Investment Corp
STWD – Starwood Property Trust Inc
BXMT – Blackstone Mortgage Tru…
It seems as though the overall trend for these stocks is to lose money. And while NLY might be lower than the others, we're talking about varying lows. There's also differences in the dividends offered to factor in.
My impression is that these stocks offer high yield dividends under the pretense of stability but lose as much value in their stock as they wind up giving back in dividends. My overall value in NLY is exactly the same was when it started years ago. My cost basis is significantly higher than my current holdings but the overall value has remained the same as I earn X amount in dividends, only to see the total value of the stock drop by X amount as well.
Is this par for the course and am I leaving money in a slowly devaluing trap?
Leave a Reply