This week’s Weekly is a continuation of our public report titled Big Yield Roadmap. However, in the members-only version we provide specific details on stocks we actually own in each of the big dividend categories (so far, we haven’t mentioned any of these stocks publicly). We also provide information on additional big-dividend stocks that are on our members-only watch list. Lastly, this week’s new investment idea is a deep dive into one of the healthcare REITs we have been considering.
As mentioned in our public article, we have divided big-yield investments into 7 broad categories. For your consideration, we have added members-only information on stocks we own (as well as the ones we are considering) in each of the categories, below:
Ventas (VTR) is a healthcare REIT with a diversified investment portfolio, an attractive dividend yield (4.1%), and the winds of an enormous demographic trend at its back. The dividend is very safe, and despite the recent strong price performance we believe this REIT has many years of continued growth ahead. Ventas is our new investment idea this week, and you can view our full write-up here.
In additional to the telecom stocks we’ve written about publicly (e.g. Frontier, Verizon) we have only mentioned CenturyLink (CTL) on our members-only website, and we continue to believe it offers a very attractive big dividend yield 6.9%). We first wrote about CTL back on June 5th, and since then the shares have risen 14.5%. We believe now is still a good time to buy because the market is overly negative on the stock, the price is still low, the valuation is attractive, and the dividend yield is outstanding. You can view our recent CenturyLink write-up here.
The one big-dividend utility stock we currently own is Westar Energy (WR), and the dividend yield isn’t all that impressive anymore (2.7%) because the stock is up 54% in the last year as news has emerged that Great Plains Energy plans to acquire Westar (you can read our write-up on the acquisition here). We may look to replace our shares of Westar with another utility company, and we will focus on other small/mid-cap stock because there is currently a lot of buyout activities going on. Specifically, larger utilities are having a hard time generating enough growth organically, so they’re looking to grow by acquiring smaller utilities companies, and they’re will to pay a hefty premium (this is why Westar shares are up so much).
Business Development Companies
We own shares of Triangle Capital (TCAP, 10.8% Yield) in our Blue Harbinger Income Equity strategy, and we continue to like the shares going forward. We acquired them in early May shortly after the company announced it was cutting its dividend and the stock price fell significantly. The dividend cut was an extraordinarily conservative move (they could have easily afforded not to cut), and it sets up the stock for very healthy returns in the future. You can read our full write-up on Triangle Capital here.
Master Limited Partnership (MLP)
We bought shares of William’s Partners (WPZ) back in May, and it’s been a great performer so far. In addition to its 9.25% yield, the shares have gained 32% since we bought. Our thesis was that turmoil creates opportunity, and you can read our full write-up on Williams here.
We own shares of Tsakos Navigation (TNP) in our Blue Harbinger Income Equity strategy, and we believe it is currently offering a particularly attractive entry point as the shares have pulled back over the last month. It’s net income has been ramping up, its share price has not. Another Greek shipper, Teekay Offshore recently raised additional capital to help support its business, and that action has the markets spooked with regards to other shipping companies like Tsakos. We believe Tsakos’s big 6.2% dividend is relatively safe, and the yield will come down as the price of the stock goes back up. You can read one of our historical Tsakos reports here.
Miscellaneous Big Yielder
We don’t currently own shares of OneBeacon (OB) Insurance, but we really love the stock. It yields a safe 5.9%, and it has lots of price appreciation potential. OneBeacon is a low beta stock, it is a great diversifier within an income portfolio, and you can read our full write-up on OneBeacon here.