UDR - 1 Dividend Stock to Buy Hand Over Fist and 1 to Avoid
2024-04-24 04:25:00 ET
If you are looking for dividend income, you might find Annaly Capital Management 's (NYSE: NLY) huge 14.2% dividend yield attractive. But you'd be better off buying UDR 's (NYSE: UDR) much smaller 4.6% yield. Here's what you need to know before you end up adding a serial dividend cutter to your portfolio and pass up a historically high yield from a reliable dividend grower.
The chart below tells an important story when comparing Annaly Capital to UDR. Annaly's dividend has been cut multiple times over the past decade, while UDR's has trended slowly higher.
If you are trying to live off the income your portfolio generates, suffering through multiple dividend cuts is kind of counterproductive. A high starting yield doesn't make up for the reduction in income. And, notably, Annaly's stock price has tracked its dividend lower, so investors have also suffered a loss of capital.
For further details see:
1 Dividend Stock to Buy Hand Over Fist, and 1 to Avoid