Stock of the Week

Forget ZIRP: Top 10 Big Yields (BDCs, CEFs and REITs)

Over the last year, interest rate expectations have gone from expected rate hikes by the Fed to rate cuts, and it’s got people scared and confused. Increasingly confounding to many, rates in many regions around the world are now negative. According to Wikipedia, a Zero Interest Rate Policy (ZIRP) is for extraordinary circumstances. But let’s forget ZIRP for a moment, and instead consider attractive big yield opportunities for income-focused investors. This article focuses on Business Development Companies (BDCs), Closed-End Funds (CEFs) and Real Estate Investment Trusts (REITs). Specifically, we count down our Top 10 Big Yields from that category. And without further ado, here is the list.

Ares Capital: 8.4% Yield, Stable Income Potential

Ares Management, L.P. is the largest BDC in the US by assets. The company holds a well-diversified, low risk portfolio of assets and has provided sustained income to investors since its IPO in 2004. This article provides a background on the company, analyzes its portfolio and finally concludes with our opinion on whether investors should consider adding exposure to the company.

MAIN’s 6.8% Yield: Consistent Dividends, Lower Middle-Market Investments

If you’re looking for an attractive way to generate stable income and an interesting way to participate in the lower middle-market, then Houston based BDC Main Street Capital (MAIN) is worth considering. It delivers a consistently growing dividend per share, under average debt to equity and above average ROE and ROA, and it has significant oppurtunities for continuied NAV growth per share.

Goldman Sachs BDC: Compelling 9.1% Yield, Reasonably Priced

If you’re looking for stable high income, Goldman Sachs BDC (GSBD) offers an interesting way to invest in private middle-market companies while paying you a healthy 9.1% dividend yield. This article reviews the business, the portfolio, net investment income, dividend coverage, and risks, before finally concluding with our opinion about who might want to consider investing in this high yield opportunity.

Monroe Capital: Why This 13.4% Yielder Sold Off 21%, and What Comes Next

They say almost everything becomes attractive at the right price. And considering the 21% sell off in 13.4% yield Monroe Capital (due to its company-specific challenges, combined with the overall industry and market sell off), it is increasingly tempting to consider the shares of this diversified business development company (“BDC”). This article provides a background on Monroe, analyzes its portfolio and finally concludes with our opinion on whether investors should consider buying shares given its high dividend yield and low valuation.

STAG’s 4.6% Yield: An Industrial REIT With More Octane

STAG Industrial, Inc (STAG) is an attractive monthly dividend REIT that has experienced a sizeable increase in its asset base since its IPO in 2011. The company plans to continue on its path of acquisitive growth, and its calculated strategy of aggregating properties along with purposeful diversification is expected to pay growing dividends for years to come. This article analyzes the various strengths of STAG, looks at the dividend yield, valuation, risks, and concludes with our opinion on why STAG is worth considering if you are a long-term income-focused investor.

Ventas’ 5.1% Yield: Too Much Risk for This Popular REIT?

Ventas Inc. (VTR) has significantly restructured its portfolio in the last two years to address a downturn in operational performance. The adverse impacts of these changes are expected to continue through 2019. This article analyzes the various challenges that have brought Ventas to its current position, and then considers the health of the business, valuation, risks, dividend safety, and concludes with our opinion about whether Ventas is an attractive choice for investors seeking stable long-term returns.

EastGroup Properties: Will the Safe Dividend and Price Appreciation Continue?

EastGroup Properties (EGP) has been one of the best performers in the industrial REIT sector over the last five years in terms of maximizing shareholder value. The company’s differentiated operating strategy and risk-adjusted targeted development program is expected to pave the way for future growth. This article analyzes the various strengths of EGP, looks at the dividend yield and valuation (the dividend has been consistently increasing, but the yield is still only 2.5% because the price keeps increasing too, as it should) and concludes with our opinion on whether EGP is worth considering if you’re a long-term dividend growth investor.

Realty Income’s 3.7% Yield: Still Investable Considering New International Forage?

Realty Income (O) is a popular monthly dividend paying REIT that has recently started to invest outside the US. This article considers whether this international forage is a good idea or if the company is now desperate for opportunities. We also consider the company’s portfolio, balance sheet, competitive advantages, dividend safety, valuation, and conclude with our opinion on whether or not Realty Income is still an attractive investment opportunity for long-term income-focused investors.

New Residential: Why This 13.8% Yielder Fell 20%, And What Comes Next

New Residential continues to pay attractive big dividends, but its share price is down more than 20% from its recent highs. After a brief review of how NRZ makes money, the big risks it faces, and why the business is attractive, we provide details on why the share price has fallen over 20%, and what might come next. We conclude with our views on investing in NRZ.

The More It Falls: Top 10 Big Yields Worth Considering (6% to +12% Yields)

The S&P 500 has declined over 14% since the start of October as fearful investors have been selling, in many cases indiscriminately. Fear mongering media narratives are usually based, in part, on some truths, such as tariffs, declining oil prices and the fed. This article focuses on contrarian high yielders in which we allocate some of our investment dollars opportunistically, like when fear is higher and prices are lower, as is increasingly the case right now. Without further ado, here are our top 10 big yields worth considering.

Energy Transfer: Attractive 9.5% Yield, But Know The Big Risks

Energy Transfer (ET) offers a big 9.5% yield, and it trades at a very attractive EV-to-EBITDA relative to peers. However, if you’re going to invest, you may want to consider the big risks ET is currently facing (i.e. the price is low and the yield is high for a reason). This article provides an overview of Energy Transfer, reviews the big risks the organization faces, and concludes with our views on whether Energy Transfer is worth considering as an investment.

Main Street's 6.8% Yield: Despite Intensifying Risks, It's Worth Considering

Main Street Capital (MAIN) is a popular income-investor Business Development Company (“BDC”) because it offers an attractive 6.8% yield, and both the dividend payments and the security price have been increasing significantly for years. This article briefly reviews the company and its many attractive qualities, then gets into the big risk factors that investors should be aware of. We conclude with our views on whether MAIN is still an attractive security to own or if it’s time to look elsewhere.

100 High-Yielders Down Big: These 5 Are Worth Considering

As the 10 year treasury yield hit a 7-year high on Thursday, the market got jittery. Specifically, many investors fear the fed’s increasingly hawkish monetary policies will put the brakes on the 9-year bull market rally. As a result, stocks sold-off. However, not all stocks are created equally, and some very attractive high-yielders extended their unwarranted slides. Here is a list of 100 high-yield stocks that have continued to sell-off, followed by five specific high-yielders that are attractive and worth considering.

Triton’s 6.3% Yield: Trade Wars and Economic Risks

Triton is an intermodal shipping container company (i.e. the ubiquitous steel boxes on ships, trains and trucks), and it offers a tempting 6.3% dividend yield. But before you consider owning shares (or hanging on to the shares you already own), you might want to consider a couple big risks.

Top 10 High-Yield Contrarian Opportunities

With the bull market running for over nine years now, not a day goes by where someone doesn’t claim the end is near. Nonetheless, the economy continues to strengthen, and no one knows for sure when the next bear will arrive. However, we do know that not all stocks move in lockstep with the broad market indexes, and opportunities constantly arise to cater your investment portfolio to meet your own specific needs. This article reviews our top 10 high-yield contrarian opportunities, from across 10 different investment categories, all for you to consider as you build and manage your own investment portfolio.

Tsakos: Tempting High Yields, Cash Flows Uncertain

Tsakos Energy Navigation (TNP) is a marine shipping company (mainly crude oil) that offers an array of high-yield equities including 5 series of preferred shares with dividend yields from 7.9% to 9.5% and common shares offering a 5.8% dividend yield. But before you start trying to decide which of Tsakos’ many high-yield securities you want to invest in, you might first want to consider whether you believe the business will actually produce the cash flows necessary to support those payments to investors. This article details the two biggest risks threatening Tsakos’ future ability to pay, and then reviews the differences between the company’s array of high yield securities. We conclude with our thoughts on how income-focused investors might want to “play” Tsakos.

Attractive Dividend Dog Of The Dow: Anti Froth-Chasers, Trade War Fearmongers

“Dogs of the Dow” is basically a high-dividend contrarian strategy, whereby an investor selects annually for investment the ten Dow Jones (DIA) stocks with the highest dividend yields. This article reviews one particular Dog that we consider particularly attractive right now because of overblown trade war fears, its low volatility, its big growing dividend, and because the market is vastly underestimating its improved business.

WP Carey REIT: Tempting 6.2% Yield, But Is The Price At Risk?

Interestingly, after 2 years of underperformance, REITs have staged a bit of a comeback (see chart), but why has WP Carey REIT (WPC) not kept pace? This diversified commercial property REIT has a tempting 6.2% yield, but this article considers the safety of that yield, as well as some important clues about the valuation and the opportunities going forward.

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