Annaly Capital Management (NYSE: NLY) has an enticing 14%+ dividend yield backed by a dividend that was just increased. Some on Wall Street believe that the safest dividends are those that have just been raised. But don’t let greed drive your decision-making; there’s more to know about Annaly than just the size of its dividend yield if you want to become a millionaire someday.
Annaly Capital is a real estate investment trust (REIT). However, unlike most REITs, it doesn’t purchase properties. Traditional REITs essentially do what you would do if you owned a rental property, but they do it on an institutional scale. Annaly buys mortgages that have been pooled into bond-like securities. This is a vastly different business model, one that would be very hard for a small investor to replicate in any way.
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