8.9% Dividend Yield Finally Enters The Buy Zone From Annaly Capital Preferred Share

Core Viewpoint - Annaly Capital Management's preferred shares, particularly NLY-I, present an attractive investment opportunity due to recent price weakness, allowing for a bullish rating despite a low yield to call [3][22]. Group 1: Investment Opportunity - NLY-I shares are currently trading at $25.01, offering an annualized yield to call of approximately 4.7%, which could improve to about 8.94% if shares are not called immediately [3][23]. - The shares became callable on June 30, 2024, and have not yet been called, indicating potential for continued yield collection [4][8]. - NLY-I is considered more attractive than NLY-F due to a lower price of $25.01 compared to NLY-F's $25.37, along with a better yield [5][8]. Group 2: Dividend Policy and Yield Calculation - NLY-I's dividend policy results in slightly larger dividends compared to NLY-F, despite NLY-F having a higher floating spread [7][8]. - The method of calculating dividends for NLY-I is more favorable, using the actual number of days in a dividend period divided by a 360-day year, leading to a higher effective yield [9][7]. - The annualized yield to call for NLY-F is negative, while NLY-I maintains a positive yield, making it a more favorable investment [8][22]. Group 3: Market Dynamics and Price Resistance - Historical data shows that NLY-I shares rarely trade below $25, indicating strong support at this price level due to retail investor interest [15][22]. - The expectation is for modest price improvement of around 1% to 1.5% beyond dividend accrual, which is currently running nearly 9% [23][22]. - The company has invested over $100k in acquiring 4,148 shares of NLY-I, reflecting confidence in the investment's potential [23].