Key Points
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Mortgage REIT Annaly Capital Management has a 16.4% forward dividend yield.
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This means a $73,040 investment could yield you around $1,000 per month of dividend income.
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Despite Annaly raising its quarterly payout twice over the past two years, the risk of a dividend cut remains high.
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Annaly Capital Management (NYSE: NLY), a mortgage real estate investment trust (REIT), has a forward dividend yield of 16.4%. Even at this time of high interest rates, this represents a super-high forward dividend yield.
This yield is so high that you may be wondering how much, or how little, capital you’d need to generate $1,000 in monthly dividend income from this stock. However, while the answer may be less than you think, one must consider the safety and sustainability of Annaly’s extremely high current payout level.
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How much Annaly Capital Management stock do you need to generate $1,000 in monthly dividends?
With a quarterly dividend of $0.75 per share, Annaly Capital Management pays out $3 per share per year in dividends. As $1,000 monthly equals $12,000 annually, 4,000 shares is what you need to average a four-digit monthly dividend income from this stock. How much is that going to cost you?
Trading for around $18.26 per share today, 4,000 shares of Annaly come out to around $73,040. However, before you run out and buy this stock, hoping to collect a steady, above-average yield from your investment, consider the many caveats inherent in this mortgage REIT stock.
Safety, sustainability, and whether it’s worth it
Take a look at recent results, and you may think that its current payout rate is sustainable. After all, per Annaly’s Q3 2026 earnings release, it had $0.80 in earnings available for distribution (EAD), slightly above its $ 0.75-per-share payout.
Not only that, the current dividend rate represents Annaly’s second consecutive annual dividend increase. In 2025, the mortgage REIT raised its quarterly dividend from $0.65 to $0.70 and has since increased it to $0.75 per share. However, in 2023, as rate hikes severely affected interest spreads and book value, Annaly slashed its dividend from $0.88 to $0.65.
Moreover, total returns, or stock price gains and dividends, for Annaly over the last five years total just 4.6%, versus a total return of over 80% for the S&P 500.
In short, income-focused investors may want to look elsewhere, as the yield-trap risk here remains high.
Should you buy stock in Annaly Capital Management right now?
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Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
