I think that the yield is not high enough to justify the risk in a less than transparent company. Reaching for yield? Although I don't own it, NLY seems like a decent candidate.
For a 5% yield you can get O, a high quality REIT, tons of quality MLP's, utilities like FE with a 5.7 yield, and a few banks like BXS. MO has a 1/2 percent less yield, and no one has any doubt about the consistency of their business or yield.
Looking for yield pre-supposes you are also looking for some level of safety, and I'm not sure the yield is high enough for the risk.
What I watch for are the secondaries, acquisitions like recently with BMO, and buy in on the dips, wait until I have made my dividend for the year in capital gains, and then begin to sell covered calls to enhance the yield. Worst case is that the stock gets called away and you have a year to buy it back cheaper, during the inevitable correction that simply must come unless "things are different this time." |
