- We were tasked to pick our very best pick for 2021.
- As a team, we held intense talks to determine which was the best.
- The benefit of a team is that you're not getting a lone guns opinion.
As many of you know, I focus heavily on helping retirees and income investors achieve what so many feel is near-impossible. What is that? A fantastic retirement funded by recurring income from the market. I designed a portfolio specifically to achieve this and provide it as a model for others to replicate.
2021 is going to be a year of many opportunities after the ride the market went on last year. As we go through our portfolio, we see many opportunities that will pay us excellent dividends and have great capital gain potential. When Seeking Alpha asked us to pick just one as our top pick for 2021, several of our holdings immediately came into the conversation. Between my team of income experts (Beyond Savings, Treading Softly) and Myself the discussion was lively and focused. We considered the Biden Administration, Energy prices, Geo-political shifts, and COVID-19 impacts. We landed on one great name to put above all others:
Annaly Capital Management (NLY) emerged as the best opportunity. NLY already has a 10.7% yield from their current dividend and we are very confident that NLY will be raising their dividend in 2021.
Conditions for NLY are ideal. NLY makes their money from borrowing short-term funds, usually under 60-days, and investing in agency MBS which is a long-term asset. The mortgages underlying the MBS that NLY buys are typically 30-years. So NLY is profiting from the difference between what they receive in interest from mortgages and their interest expense on their debt.
This creates the "net interest spread", which is how much NLY is earning after paying their largest expense- interest. The higher NLY's net interest spread, the more money they will be making.
Here is a look at NLY's net interest spread over the past decade.
As a REIT, NLY has to distribute most of their taxable income, so as their income rises their dividend will follow. This means more money in your pocket and a rising share price to boot. NLY is set to be the biggest winner in your high yield portfolio!
NLY may be our topic pick, but we have others we recently shared as great choices to drive your portfolio in 2021 to new levels of income generation and success.
Join us today and you'll never be left wondering what my team and I see as excellent buying opportunities. We provide real-time trade alerts, In-chat notifications of great opportunities to add to specific picks and answer your burning questions.
I'm not promising to make you wealthy tomorrow. I am promising that over time you will become wealthier and wealthier as we invest in the market together.
Knowing where to buy to get great income is our specialty. We're not day traders, or momentum gurus. We love to focus on old-fashion reliable dividends from high yield opportunities. You don't need to race to the top and beat everyone else when you know your next dividend check is in the mail. That the beauty of our 'Income Method' which targets an overall dividend yield of +9%. We are able to achieve such high yields by focusing on solid mispriced dividend opportunities, or ones that go under-the-radar.
Remember I'm pulling for you. We're all in this together!
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Analyst's Disclosure: I am/we are long NLY.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.