Municipal Bonds can be an attractive, yet often overlooked, way to generate healthy income with low risk. In particular, and depending on your tax bracket, muni bond’s tax-exempt status can boost your after tax income significantly. In this report, we analyze four Municipal Bond CEFs (closed-end funds) based on portfolio characteristics, return/risk, yield prospects and finally conclude with our thoughts on the pros and cons of each. We currently own two of the four in our Alternative Fixed Income Portfolio.
Top 5 Safe 8% Yields: Low Beta-Risk Edition
The stock market just completed an amazing year, up over 31% in 2019. However, if you are an income-focused investor, you may have an eerie feeling in the back of your mind that we’re due for a big correction. Of course, no one can predict what will happen to the stock market tomorrow—let alone for all of 2020. But what we can do is assess an investment’s tendency to rise and fall with the market through its beta risk (defined as the measure of risk arising from exposure to general market movements as opposed to idiosyncratic (or stock-specific) factors). And to some extent, low-beta investments have a tendency to not be pulled as much lower when the market sells-off. This report ranks our Top 10 Safe (low-beta risk) Investments that offer yields of at least 8%.
3 PIMCO Bond CEFs: Huge Yields (8.1%, 8.3%, 9.8%) Paid Monthly
If you are an income-hungry investor, PIMCO offers a variety of low-beta, fixed-income Closed-End Funds (“CEFs”) that are worth considering. In this report, we analyze three of them, multi-sector funds (PFL) (PHK) and (PCI), considering sector allocations, pricing, distribution prospects, leverage, and finally conclude with our opinion on which one of them offers the most attractive balance of risks versus rewards for income-focused investors.
Energy Sector: Top 5 Big Safe Dividends
Energy (XLE) is the worst performing sector this year, gaining only 8.0%, versus an amazing 31.0% for the S&P 500 (SPY). Yet an examination of the sector reveals a variety of attractive big-dividend investment opportunities. This is the members-only version of our Top 10 Big Safe Energy Sector Dividends, but in this members-only version we share the Top 5 most attractive.
This Safe 9.1% Yielder Pays Monthly, Trades at a 6% Discount
Sometimes investors just want big monthly income payments without all the worries and risks associated with the stock market. This article covers a Closed-End Fund (“CEF”) that offers an attractive 9.1% yield (paid monthly) by investing in an actively managed portfolio of fixed income securities (bonds). Not only does this fund pay monthly, but it’s never reduced its monthly payments in its 6-year history, and it actually just raised them. Further, it trades at a compelling 6.3% discount to its net asset value. It has other attractive qualities too, such as a conservative amount of leverage, and an attractive management team. This article reviews the risks and rewards, and concludes with our opinion about investing.
Digital Realty: Growing Dividend, Attractive Price
Shares of Digital Realty (DLR) are down 13%, as they’ve recently gotten caught up in the indiscriminate “REIT sell-off” driven largely by macroeconomic noise. And the business offers an attractive investment opportunity for investors seeking steady growing income along with significant long-term price appreciation potential. In particular, this data center REIT has raised its dividend for the past 14 years and is likely to continue to do so given strong industry tailwinds. This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion on why Digital Realty is worth considering if you are a long-term income-focused investor.
New Options Trade: Fear-Driven High-Income Opportunity, Big-Dividend REIT, Debunk the WSJ
The market has had a love-hate relationship with this big-dividend REIT in 2019, and recently hate has taken the lead, as the shares have sold off. And yet another negative headline this weekend from the WSJ is adding to uncertainty and volatility, thereby making this attractive income-generating options trade even more compelling, in our view. We believe this is an attractive trade to place today, and potentially over the rest of this holiday week as long as the share price doesn’t move too dramatically before then.
REITs Down Big: Top 10 Big-Dividend REITs (Members-Only Version)
In this members-only version of the report, we share the Top 5. We currently own 4 of the top 5 (and we also mention another attractive REIT we own, as well). We believe the top 5 offer truly fantastic investment opportunities for income-focused investors (within the constructs of a prudently diversified portfolio), and especially after the recent indiscriminate REIT market sell-off. Without further ado, here are our Top 5 Big-Dividend REITs…
New Options Trade: High Income from the Indiscriminate REIT Sell Off
We are sharing an attractive high-income-generating options trade on a compelling oversold big-dividend REIT. Our thesis is basically that big-dividend REITs in general are oversold as a result of near-term market noise. With the phase 1 US-China trade deal in place and the economy strong, investors are shedding “safety assets” like REITs, and buying “risky assets” like growth stocks. It’s still a fantastic environment for REITs with interest rates low (and the economy strong), and good REITs are being thrown out with the bathwater. We believe this is an attractive trade to place today, and potentially over the next few days as long as the share price doesn’t move too dramatically before then.
Big-Dividend REITs: So Many Increasingly Attractive Opportunities
At Blue Harbinger, we generate our high income from many different types of investments in order to avoid the excessive damage when a particular style or sector takes a big hit. Big-dividend REITs have taken a big hit lately (we’ll explain why), and not only have we avoided excessive damage (our portfolios continue to perform extremely well), but we are seeing very attractive opportunities to buy low. This week’s Weekly, reviews the recent performance of all 65 of our current holdings (across our 3 separate portfolio strategies), and highlights a handful of very attractive big-dividend opportunities trading at increasingly compelling prices.
Ventas: 5.8% Yield, Have You Pulled the Trigger Yet?
Ventas (VTR) is a big-dividend healthcare REIT, and the shares are down 27% in the last 2 months. Near-term headwinds seem to have caused the price to detach from the long-term value, but is there still more pain to come? In this report, we analyze the company’s income profile, current portfolio trends, market dynamics, dividend prospects and finally conclude whether the REIT’s units offer an attractive balance between risks and rewards.
Industrial REIT: 4.4% Yield, Attractive Price Appreciation Potential
This stable, growth-oriented, industrial REIT, is trading at an attractive discount. Not only does it have long-term leases with investment-grade tenants at attractive rentals, but it’s also offering an attractive 4.4% dividend yield—significantly higher than peers. In this report, we analyze the company’s income profile, growth and dividend prospects, and finally conclude with our opinion about investing in this attractive opportunity from a risk-versus-reward perspective.
New Options Trade: Very High Income and Growth, Following Sell Off
Concentrating all of your nest egg in a narrow range of investment types can result in unnecessary risks. As such, we like to share income generating opportunities from a range of strategies. The option trade we share today generates a huge amount of upfront income and is based on an “Income via Growth” stock. The shares are very attractive over the long-term, but they just sold off thereby making this trade timely and compelling.
New Options Trade: Royal Dutch Shell, Attractive High Income
Royal Dutch Shell (RDS.B) is an integrated oil & gas company that offers a very safe dividend. The yield is currently a larger-than-normal 6.5% because the share price has underperformed the strong fundamentals of the business. The share price was down again last week (and it was down the whole month of November while the overall market sailed higher). This article describes an attractive income-generating options trade on Royal Dutch Shell that we believe is compelling to place today (and potentially over the next few days) as long at the price of RDS doesn’t move too dramatically before then.
Growth Stocks Getting Scary, Attractive Dividend Stocks on Sale
This is our monthly performance update and holdings review. We share the continuing strong performance of our three investment strategies, including the performance of every single position in each strategy. We also highlight several particularly attractive investment opportunities, right now. The theme of this report is that the valuations of growth stocks are starting to get scary expensive, whereas a bunch of attractive dividend stocks just sold-off and are now offering increasingly attractive investment prices.
Brookfield Property REIT: Big 6.9% Yield, But Know the Risks
If you are looking for a healthy, growing dividend, you may be considering Brookfield Property Partners LP (BPY) (and/or Brookfield Property REIT (BPR)—if you prefer to invest in the REIT vehicle). Not only does the dividend appear attractive, but the shares seem to be trading at a significant discount to NAV. However, concerns over its relatively high debt continue to remain an overhang on the stock. This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion about whether BPY (and/or BPR) is worth considering for a spot in your long-term income-focused portfolio.
New Options Trade: Healthpeak Properties, Attractive High Income
We are sharing an attractive income-generating options trade that exists because of current market conditions. Healthpeak Properties (PEAK) is a healthcare REIT (formerly known as HCP) that is wisely and proactively taking steps to reduce its exposure to troubled senior housing through its new joint venture and focus on private pay. The shares sold off in the last month due to the uncertainty of the new joint venture announcement (as well as the Fed’s interest rate messaging change), which has created a very attractive opportunity. We believe this is an attractive high-income trade to place today, and potentially over the next few days, as long as the share price doesn’t move too dramatically before then.
Oxford Square: 15.5% Yield for Brave Contrarians
Oxford Square Capital Corp (OXSQ) offers a big 15.5% yield, but you need to be a brave contrarian if you’re going to invest. This business development company (BDC) invests in syndicated bank loans and both equity and debt tranches of collateralized loan obligations (CLO); and the shares have been dragged sharply lower because of its exposure to underperforming market segments including healthcare, software and high yield credit in general. This article provides a background on the company, analyzes its portfolio and finally concludes with our opinion on whether it’s worth risking some of your capital on this huge yield with significant share price appreciation potential.
Options Trade: Ventas Bumpy Road, High Upfront Income
Healthcare REIT Ventas (VTR) continues to search for its footing and has declined ~22% in the last month. Investors didn’t like the October 25th earnings call as the company lowered its senior housing (“SHOP”) guidance. We warned of this danger facing Ventas back in late June, and have avoided investing in the stock. However, we’re now sharing an attractive, new, income-generating, Ventas options trade. We believe this is an attractive trade to place today, and potentially over the next few days, as long as the price of Ventas doesn’t move too dramatically before then.
4 Big Dividends That Have Gotten Less Expensive: Energy Transfer (ET), New Residential (NRZ), Ventas (VTR), Oxford Square (OXSQ)
The market continues to reach new all-time highs, and our investment portfolios do too. However, a handful of popular big dividend paying equities have gotten particularly less expensive in recent weeks. This week’s Weekly provides a brief update on all four of them, and whether we believe they are worth investing or avoiding altogether.