2 High-Yield Financial Stocks to Buy Hand Over Fist and 1 to Avoid

Core Viewpoint - High-yield stocks can present both opportunities and risks, with Annaly Capital Management being a stock to avoid due to its declining dividend history and complexity in its investment strategy [1][3][5]. Group 1: Annaly Capital Management - Annaly Capital Management is a mortgage real estate investment trust (REIT) that invests in mortgage-backed securities rather than physical properties, making it a complex investment choice [3]. - The company has a high dividend yield of 12.6%, but its dividend has been consistently decreasing over the past decade, which is detrimental for investors relying on dividends for income [4][5]. - Annaly is more suited for institutional investors focused on total returns rather than individual investors seeking spendable income [6]. Group 2: Alternative High-Yield Stocks - Toronto-Dominion Bank (TD) and Bank of Nova Scotia (Scotiabank) are highlighted as better high-yield investment options, offering yields of 4.7% and 5.7% respectively [7]. - The Canadian banking system is heavily regulated, providing a stable foundation for these banks, which have maintained strong market positions [8]. - TD Bank is facing a significant fine due to inadequate money laundering controls but has a long history of paying dividends since 1857, suggesting resilience [10]. - Scotiabank is undergoing a strategic shift after facing challenges in Latin America, including a recent $2.8 billion investment in KeyCorp, indicating a long-term growth strategy [11][12].