Why doesn't nobody buy stocks with 15-20% dividend?

Discussion in 'Stocks' started by failed_trad3r, Mar 24, 2010.

  1. Like Annaly Capital Management it has 15% dividend and nobody buys it? Are you crazy?:eek: :eek: :eek:
  2. "Why doesn't nobody buy.." ? You sound like a combination of Jim Cramer and Larry the Cable Guy. I'm not normally a grammar Nazi, but jeez..

    If you want a high dividend, buy it yourself and hope no one else does. Because if price goes up, yield goes down.
  3. I haven't looked at the stock in a while, but from what I remember those dividends are a product of financial leverage. What are long run (5 yr) estimates ? There is a bit of risk there to generate those cashflows.
  4. Retief


    The reason for that high dividend is because the market is pricing in declining dividends. That's the reason for the gap down in the chart. The divy was decreased for the next quarter.

    And yes, NLY does use leverage and sometimes those types of stocks can quite rapidly go to zero. Look what happened to New Century or Thornburg Mortgage (TMA).

    Sometimes yield hogs really get slaughtered.
  5. the1


    Ahhh....that dreaded Efficient Market Hypothesis rears its ugly head again :p

  6. no one cares about a "high dividend", the effective return is inclusive of the price appreciation.
  7. pupu


    A couple of issues with high dividends I recall:

    1. not sustainable

    2. some structure funds/vehicles just pay dividends out of capital. The chart goes down in a steady slope. Basically you get your own money back less commissions and taxes. Amazing these scams are legal.
  8. nothing dumber than a dividend humper.
  9. nLepwa


    Why isn't anyone buying turkish lira??!
    They pay 15%+ yearly interest!

    That's better than 99.9% of funds.
  10. Prime example of stupid: PGH. This was a $20 stock form 2005-2007 paying nice divies then whamo, single digits and the divy was cut.
    #10     Mar 24, 2010