Often an income-investor favorite, 2021 continues to be an interesting year for PIMCO’s lineup of big-distribution, monthly-pay, fixed-income CEFs. We’ve seen the launch of a new winner, a distribution cut from a perennial favorite, and now an imminent merger and sharply declining premiums for three classic PIMCO funds. In this report, we focus on one in particular, its 10.1% monthly distribution and its significantly shrinking price premium (versus NAV) as the big merger looms imminent. And regarding its once large premium, it is our opinion, as Arnold Schwarzenegger’s Terminator character once said, I’ll be back! We conclude with some important takeaways on who might want to invest and how.
Healthcare REIT: 5.5% Yield, Healthy Growth
The 5.5% dividend yield healthcare REIT we review in this report is attractive. Its dividend is well covered (82% payout ratio) and is likely to grow (considering this year’s double-digit FFO per share growth expectation). We also like the company’s track record of delivering normalized FFO per share growth of nearly 9% over the last 10 years. In this report, we review the health of the business, valuation, risks, dividend safety, and then conclude with our opinion on investing.
Big Q4 Dividend: On Sale for Labor Day
This attractive CEF has been paying big dividends for over 80 years! And its big annual Q4 dividend is currently on sale, as the shares trade at a very attractive discount to net asset value. Additionally, the fund is well managed, it charges very low fees for a CEF, it doesn’t use any risky leverage, and it provides very important diversification by giving income-focused investors exposure to market sectors they don’t usually participate in. If you are a long-term, income-focused investor that likes to buy things on sale, this CEF is absolutely worth considering.
50+ Big-Dividend "MOPAY" Stocks: These 3 Are Worth Considering
“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” - John D. Rockefeller
That quote takes on special meaning for income-focused investors today as many of the world’s most popular stocks don’t even pay dividends (and many don’t even have positive net income). On the flip side, big steady dividend income is hard to find, but very special—especially when those big dividends are paid monthly (MOPAY). In this report, we share data on 50+ big-dividend MOPAY stocks, and then highlight three in particular that are uniquely attractive and worth considering.
Frothy Market Valuation: Raising Cash, 3 High Income Protection Stocks
If you care most about receiving big steady dividends and income from your investments, then you may care less about impending market volatility. However, if you are consistently selling shares to generate spending cash—then a massive market decline (even if it’s only temporary) can spell disaster. In this report, we review current market valuation metrics (suggesting big danger on the horizon), we then explain why your anxiety level may be a symptom of something else (that needs to be addressed), we delve into the important question “how much cash should you hold?” and then highlight three specific “high income protection stocks,” before finally concluding with a very important takeaway.
25 Big-Dividend Healthcare Stocks: These 3 Are Worth Considering
It makes a lot of sense for income-focused investors to look beyond simply the current dividend yield and to also consider profitability and growth. In this report, we share data on 25 big-dividend healthcare stocks, including also data on earnings and revenue growth. We then highlight a few names from the list that we believe are particularly attractive and worth considering for investment—if you are a long-term income-focused investor.
75 Big-Dividend REITs, BDCs, CEFs: These 3 Are Worth Considering
If you like to generate big steady income, REITs, BDCs and CEFs can be attractive for their high yields (often in excess of 5-6%). And while these are dramatically different types of investments, they can be prudent building blocks within a well-diversified, income-focused, investment portfolio—when selected carefully. In this report, we share data on over 75 big-dividend investments (25+ REITs, 25+ BDCs and 25+ CEFs), review some of the attractive qualities and risks of each, and then dive into three specific names from the list that are particularly attractive and worth considering for investment.
Big-Dividend BDCs: The 5 We Own (Yielding 6.0%, 9.1%, 8.2%, 8.1% and 8.5%)
Business Development Companies, or “BDCs,” basically provide financing (debt and equity) to private companies that are usually a bit too risky for ordinary banks to work with (due especially to stringent post-financial crisis regulatory rules). However, by building a portfolio of these companies, BDCs can reduce risks, and pay income-focused investors the big dividend yields that they love. This report provides an overview of current BDC valuations, and then reviews five of our favorite BDCs, currently yielding 6.0%, 9.1%, 8.2%, 8.1% and 8.5%, respectively.
Data Center REIT: Growing Dividend to Benefit from Ongoing Digital Transformation
If you are looking for a steady growing dividend (and the potential for continuing long-term share price appreciation) the data center REIT we review in this report is attractive. For starters, it has raised its dividend (current yield is 2.9%) for 16 straight years (since its IPO) thanks to steady growth in its funds from operations (~11% CAGR since 2005). And even though core FFO per share declined in 2020 (pandemic year) it is on pace to bounce back in 2021. Further, it will continue to benefit from the massive ongoing secular digital transformation. In this report, we review the business, valuation, dividend safety, risks and then conclude with our opinion on investing.
Top 10 Dividend Growth Stocks: Give Yourself a Raise
For income-focused investors, “yield chasing” is one of the most common and most painful mistakes. Instead, focusing on stocks with healthy growing dividends can be a much better approach. In this report, we rank our top 10 dividend growth stocks (those with at least 10 consecutive calendar years of dividend increases), including a healthy mix of higher (above 5%) and lower (below 5%) dividend yield opportunities. We start the countdown with #10 and finish with our #1 top idea.
Attractive 5.3% Yield REIT: Compelling Valuation
The net lease REIT we review in this report has come through the pandemic largely unscathed thanks to the mission-critical nature of it properties for its tenants. It also has an impressive dividend history, with consecutive annual increases since going public in 1998. Looking ahead, this REIT has multiple growth catalysts that should help it continue its impressive track record. In this report, we review the health of the business, valuation, risks, dividend safety, and then conclude with our opinion on investing—particularly if you are a long-term income-focused investor that also likes growth.
Stable Cash Flow Giant: Attractive 8.5% Yield
Headquartered in Canada, this midstream company operates the world’s largest oil and natural gas pipeline network (transporting about 25% of overall crude oil produced in North America). Approximately 98% of the revenue is derived from long term cost-of-service or take-or-pay contracts with automatic escalators leading to predictable cash flows across business cycles which in turn allows for consistent dividends. The company has been actively investing in upgrading and expanding its pipeline networks while also taking small steps towards greener alternatives to reduce its carbon footprint. In this report, we analyze the business model, market opportunity, financials, valuations, risks, and finally, conclude whether an investment in the company’s stock offers an attractive balance between risks and rewards.
Exxon Mobil: Despite Woke Mob, 5.9% Yield Tempting
Luckily for the planet, the widespread use of fossil fuel is likely to end. Just not anytime soon. And as a true fiduciary should, Exxon Mobil remains committed to growing long-term shareholder value—despite relentless pressures from the climate-change woke mob. In this report, we review Exxon Mobil’s business strategy, climate change pressures, dividend safety, valuation and risks. We conclude with our opinion on investing.
New Options Trade: Very High Upfront Income, Bullish Vertical Put Spread
This report reviews an attractive high-income-generating options trade on a compelling long-term fintech business (Warren Buffett and Cathie Wood are both shareholders). The trade generates attractive upfront premium income, and gives you a shot at picking up shares of this attractive business at a lower price. We believe the trade is an attractive one to place today, and potentially over the next few trading sessions, as long as the price of the underlying shares doesn’t move too dramatically.
Dry Bulk Shipper: 6.4% Yield, Attractive Supply-Demand Dynamic
There is a lot to like about this large dry bulk shipper, not the least of which is its attractive 6.4% dividend yield. More specifically, the company is benefiting from a cyclical rebound in dry bulk shipping rates, on both the supply and demand sides. It’s expected to announce earnings on August 5th, and its 8.0% yield baby bonds are expected to be called at the end of this month. In this report, we review the business, market conditions, prospects, valuation and risks, and then conclude with our opinion on investing.
New Options Trade: Dividend Capture Covered Calls, Blue Chip Pharma
Today we share an income-generating options trade on a healthy-dividend blue-chip pharmaceuticals company. The trade not only generates compelling premium income and gives you a shot at selling the shares at a solid gain in less than 1-month, but it also gives you a chance to capture the dividend payment if the shares don’t get called away from you before the ex-dividend date in a little over 1-week from today. Also very important, we like this healthy-dividend company as a long-term investment, and we wouldn’t mind holding on to the shares if they don’t get called away. This is an attractive trade to place today and potentially over the next few trading sessions.
New Options Trade: High Upfront Income, Attractive Mortgage REIT
As interest rates (including mortgage rates) have slipped in recent weeks, so too has the share price of this attractive mortgage REIT fallen. It now trades at a significant discount to its last reported book value, and we believe this combination of events has set us up for a nice high-income-generating options trade. Specifically, 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.
New Options Trade: Dividend Capture Covered Calls, Energy Midstream
Today’s income-generating options trade utilizes a dividend capture covered call strategy, whereby the trades nets you attractive premium income, potentially attractive dividend income (if the shares don’t get called), and captures attractive share price gains (if the shares do get called). The trade is on a compelling “high-dividend” midstream company that we own already, but you can also purchase the shares as part of this trade if you don’t own them already. We believe the trade is attractive to place today, and potentially over the next few days, as long as the share price doesn’t move too dramatically, and as long as you own the shares (settled in your account) prior to the ex-dividend date (expected on or around July 29th).
Very High-Income Options Trade, Bullish Vertical Put Spread
This global oncology company with patented “Tumor Treating Fields” (“TTF”) technology. It has multiple programs in phase 2 and phase 3 of clinical trials which can potentially result in exponential revenue growth and Total Addressable Market (“TAM”) expansion. The shares are volatile (for example yesterday they declined more than 14% as the market reacted to the company’s final results from a liver cancer study), and this volatility 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 (including post the holiday)—as long as the underlying share price doesn’t move too dramatically before then.
7.7% Yield: A Rare BDC Offering Dividend Growth, Equity Upside
While other business development companies (“BDCs”) were cutting their dividends as a result of the pandemic, the big-dividend payer we review in this report not only maintained theirs, but has also significantly increased it in each of the past four quarters. Moreover, the shares are trading at an attractive discount to net asset value (“NAV”). In this report, we review the health of the business, the highly-experienced management team, its balance sheet, liquidity, dividend safety, valuation and risks. We conclude with our opinion on investing.