The company we review in this report provides value-based care exclusively to Medicare eligible patients, and it is improving outcomes and reducing costs. The business is attractive as a long-term investment, however it is setting up nicely for a high-income-generating options trade. We believe the trade described in this report is an attractive one to place today and potentially over the next few trading sessions, as long as the underlying share price doesn’t move too dramatically before then.
Top 10 High-Income CEFs (5.2% to 9.4% Yields)
If you like high-income investments, this report reviews our top 10 high-income closed-end funds (“CEFs”) with annual yields ranging from over 5.0% to over 9.0% (many of them paid monthly). The opportunities range from bond funds to style-specific equities, and we consider the distribution yields, premiums/discounts (versus NAV), investment strategies (versus current market opportunities), fees, risks and more. We currently use a handful of CEFs within our prudently concentrated Income Equity portfolio (along with other attractive income opportunities, such as dividend-growth stocks, REITs, BDCs and more), and if you are an income-focused investor—the CEF names on this list are very attractive and worth considering. Without further ado, here are the details on our top 10 high-income CEFs.
PIMCO's Big-Yield CEFs: Cracks in the Dam? (PCI) (PDI) (PKO)
Income-hungry investors flock to PIMCO’s fixed-income closed-end funds for multiple reasons, including the big yields (often in excess of 9.0%), monthly payments, and sometimes even the ridiculously low prices (as we wrote about here and here). And while some investors are reassured by PIMCO’s track record of no distribution cuts in several of their most popular funds (for example (PDI), (PCI) and (PKO)), there is a lot more going on under the hood, and the recently proposed merger between these funds could be a little window dressing by the firm as the track of no distribution cuts may be in jeopardy. In this report, we pull back the curtains on these funds to reveal a little bit about how the sausage is made, and then conclude with our opinion on whether they still make for good investments, or if it is time to move on to new opportunities.
Palantir: Selling Put Options, Lots of Cash
Big data software company Palantir has become an emotional stock for many people with widely ranging viewpoints. And these differing viewpoints have created volatility that leads to high premium income (i.e. cash) being available in the options market. In this report, we share a high income-generating options trade on Palantir that we believe is attractive to place today and potentially over the next few trading sessions, as long as the price of the underlying shares doesn’t move too widely before then.
New Options Trade: Very High Upfront Income, Connected TV
The market has not been kind to top growth stocks in recent months, and that means there are some very attractive businesses trading at very attractive prices. But rather than diving in headfirst, this report reviews an option trade that generates very high upfront premium income (that you get to keep no matter what) and it gives you a shot at picking up shares of one of the top growth stocks around at an even lower price. This trade covers a stock in the connected TV space, and we believe the trade is attractive to place today—and potentially over the next few trading days—as long as the market doesn’t move too dramatically before then.
Undervalued 5.4% Yield Midstream: Decreasing Leverage, Increasing Distributions Expected
One of the largest and most diversified midstream pipeline operators in the US, the company we review in this report is focused on deleveraging its balance sheet and positioning for future distribution increases. And despite the recent strong price gains, the company continues to trade at discount to peers and has more upside ahead considering the healthy fundamentals. In this report, we review the health of the business, valuation, risks, dividend safety, and conclude with our opinion on investing.
Top 10 Big Dividends: Income Ahead of Inflation
If you are an income-focused investor, you’re likely concerned about the combination of low yields and inflation. For example, with the 10-year US treasury offering less than 1.5% yield, and growing inflation threatening to devalue your nest egg, you’re likely looking for differentiated investment opportunities that don’t involve too much risk. One strategy worth considering is to assemble a wide-ranging portfolio of investments (wide-ranging to help you diversify away a lot of the big risks) that also provides higher yields and will help keep you ahead of inflation. In this report, we share our top 10 Big Dividends to help you identify opportunities that might fit the bill for you.
This 8.5% Yield BDC Is Compelling
The 8.5% yielding BDC we cover in this report is relatively new, but well established and large, and it has a strong balance sheet and ample access to attractive deal flow. Like other BDCs, it faced challenges during the pandemic, but has come through relatively unscathed, and continues to use market dislocation to optimize its portfolio. Importantly, management expects the dividend coverage to improve (including the return of special dividends), going forward. Yet because of nervous near-term and backward-looking investors, it still trades at a discount to NAV. If you are a long-term high-income-focused investor, this one is worth considering.
New Options Trade: High Upfront Income, Bullish Vertical Put Spread
Warren Buffett’s Berkshire Hathaway has a large position in this attractive non-US fintech company. And this year’s volatility and share price softness has given rise to an attractive high-income-generating options trade. The trade strategy sounds complex (i.e. “bullish vertical put spread”), but it’s not. It puts attractive upfront premium in your pocket today, it gives you a chance to pick up shares of this attractive stock at a lower price, and it gives you a little insurance on the downside (i.e. your max loss is limited). We believe this is an attractive trade to place today—and potentially over the next few trading sessions—as long as the underlying share price doesn’t move too dramatically before then.
Income Equity Portfolio Performance; +4 Top High-Income Opportunities
The Blue Harbinger Income Equity portfolio was up 0.76% in May (outpacing the S&P 500), and it is now up 14.77% for the year (also outpacing the S&P 500). And it finished the month with a highly compelling 6.0% yield. In this report, we review the performance and positioning of the portfolio, plus 4 top high-income opportunities, all of which we currently own.
New Options Trade: Energy Sector, Yield Boosting
If you are an income-focused investor, you may want to consider the yield boosting options trade in this report. It’s a strategy that some investors repeat often, and in this particular instance we are focused on a high-income energy-sector investment that offers a 7.5% yield (paid quarterly), and this trade adds significantly to that amount. We believe this is an attractive trade to place today, and potentially over the next few trading sessions, as long as the price of the underlying security doesn’t move too dramatically before then.
A Unique Combination of Dividends, Growth and Value
If you are looking for a unique combination of dividends, growth and value, this 5G-related technology stock is worth considering. The 2.0% yield may not seem high, but it has strong history (and trajectory) of growth, and so does the overall business. It also has an attractive valuation (thanks to short-term market forces), especially considering the large total addressable market and future growth opportunities. In this report, we review the business, the market opportunity, the dividend, valuation and risks. We conclude with our opinion on investing.
Solid Energy Play: 4.3% Yield, Buybacks and Upside
If you like dividend-growth stocks, offering an attractive yield and price appreciation potential, you may want to take a hard look at this diversified energy manufacturing and logistics company. It’s coming out of its toughest year in operating history (2020, thanks to covid), but is giving strong indications there are more share price increases, share buybacks and eventually dividend hikes, once it gets the additional 2020 debt under control—which we believe it will quite soon (i.e. it’s currently turning the corner hard). In this report. we review the business, dividend safety, valuation, risks and then conclude with our opinion on investing.
Boring High Income CEF: 6.2% Yield, Paid Monthly
If you are an income-focused investor, boring can be very attractive. And the utility-sector closed-end fund (“CEF”) we review in this report has many boring and many attractive qualities. And considering our ongoing low interest rate environment (combined with the increasing trajectory of inflation), this monthly high-income producer is worth considering. In this report, we review the investment strategy, holdings, valuation, fees, pricing and conclude with our opinion on investing.
50 High-Yield Energy Stocks, Up Big: These 3 Are Worth Considering
Energy demand was reduced by the pandemic (for example, less people needed gas to drive their cars to work), and that came after supply was increased by improved extraction technologies (for example, fracking). This resulted in major pain for the energy sector, especially as investors flocked to the technology stocks that naturally fit the “social distancing” story during the pandemic. However, a lot has changed this year, as oil prices are up and the energy sector (XLE) has gained about 40%! In this report, we highlight 50 high-yield energy stocks that are up big, and then dive into three names that are particularly attractive and worth considering.
New Trades & Portfolio Update: "Pandemic Trade" Unwinds
As the “pandemic trade” continues to unwind (i.e. high growth stocks continue to sell off), we have placed a new batch of trades (in both our Disciplined Growth and Income Equity portfolios) to take advantage of attractive buying opportunities that have emerged. This report highlights the trades, as well as provides commentary on the continuing powerful performance of the two strategies.
New Options Trade: High Upfront Income, Attractive Small Cap Healthcare
If you like high income, you may want to consider the trade described in this report. It covers an attractive small cap healthcare company with very high sales growth and trading at a compelling price. But rather than purchasing the shares at the current price, this trade gives you a chance to pick them up at a lower price and it also generates high upfront premium income that you get to keep no matter what. We believe this trade is attractive to place today and tomorrow (the company announces earnings after the close tomorrow), as long as the underlying share price doesn’t move too dramatically before then.
Industrial REIT: 4.5% Yield, Undervalued, To Benefit from Sector Growth
The Real Estate Investment Trust (“REIT”) we review in this report offers a well-covered 4.5% dividend yield, and it continues to benefit from improving fundamentals in the US industrial REIT sector. Its unique strategy (of focusing on primary and secondary markets) continues to generate higher rental yields while also delivering superior rental growth. And with a payout ratio of only around 59%, the dividend is on solid footing. Moreover, the property portfolio continues to be highly resilient with ~99% rent collections throughout the pandemic. Yet despite the strong fundamentals, it trades at a significant valuation discount versus peers. In this report, we review the business, its health, valuation, dividend safety and risks. We conclude with our opinion on whether it offers an attractive opportunity for long-term income-focused investors.
2 Attractive CEFs: Big, Healthy, +5.0% Yields
In general, investment “fund” vehicles are less desirable (because of the typical high fees and chronic underperformance), but the two closed-end funds (“CEFs”) described in this report are attractive for a variety of reasons. For example, they’ve both thrived and outperformed for decades (net of all fees and expenses) thanks to their disciplined management teams, they both pay big healthy dividends (5.4% and 5.5%, respectively), trade at attractively discounted prices (versus NAV), use a small prudent amount of leverage (a good thing), have compelling sector/style allocations, and market conditions remain attractive coming out of the pandemic. You might consider buying a little (we own both) and just hanging on. You’ll keep getting paid big healthy dividends for if/when you need them, otherwise just reinvest the cash and enjoy the powerful long-term compound growth.
Portfolio Update: 3 New Buys, 1 Complete Sell, + Some Rebalancing
I don’t trade often because I am a disciplined long-term investor. However, I have just completed 3 new buys, and 1 complete sell (plus a variety of normal rebalancing trades) within the Blue Harbinger Disciplined Growth portfolio. I have also updated the “Buy Under” prices (and thereby ratings) of a variety of existing positions within the Blue Harbinger Income Equity portfolio and the Disciplined Growth portfolio. This report reviews all of the latest updates, as well as why I believe these two portfolios are positioned for continuing long-term success, in a big way!