Dividends4Life: When 7% Yield Wrecks 13%

When 7% Yield Wrecks 13%

Posted by D4L | Wednesday, May 11, 2022 | | 0 comments »

We've got a great opportunity for investors to earn over 7% with low risk and a high probability of a dividend increase later this year. There are plenty of attractive opportunities in the sector now as share prices fell much harder than book value, for some REITs. There are a few choices where share prices are down, but book value is also getting crushed. You've got to pick your spots. We'll also include one share you can steer away from today.

We're back to talking about some preferred shares. Somebody tell me how NLY-F (NLY.PF) isn't a great deal. I'll start by telling you why it is a great deal. At $23.93, NLY-F offers a massive 18.1% yield to call (annualized). So if you get called, boo-hoo. It's a capital gain of $1.07 plus current dividend accrual of $.24 and the extra dividend that would accrue before 9/30/2022 (the first callable date). The stripped yield is 7.33%, which is pretty good for a relatively low risk share.

Source: Seeking Alpha

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