Despite a high 13.8% yield, Annaly Capital Management's history of dividend volatility and interest rate sensitivity makes its current payout profile risky for long-term income investors.
Annaly Capital Management offers a high 13.8% dividend yield, significantly outpacing the S&P 500's 1.1% return. However, the mortgage REIT's history of dividend cuts and high sensitivity to interest rate volatility suggest that investors should exercise caution regarding the long-term reliability of these payouts.
The company has a history of multiple dividend cuts and its earnings are highly sensitive to interest rate changes, which impact the spread between its interest income and costs.