If you have been paying attention to the Fed’s abrupt monetary policy shift this year (from pandemic doves to inflation hawks), you’ve likely noticed a variety pain points, ranging from a sputtering stock market to falling bond prices (and it’s all to address record high inflation). You may have also noticed a lot of “income and value” equities have performed much better than “growth equities” this year as the pandemic “growth stock” trade now sits firmly in the doldrums (for example, the Blue Harbinger Income Equity portfolio is positive this year while the overall market is down, and growth stocks are down even more). However, one type of income security that has been experiencing significant short-term pain this year, is the mortgage REIT.
Nascent SaaS, Big Upside (Smart Battery Storage Solutions Company)
Traditional valuation metrics (such as price-to-forward-earnings, and even gross margins) are better suited for evaluating mature blue-chip businesses. On the other hand, such valuation metrics leave a lot to be desired when evaluating nascent innovators—especially those with appropriately shifting business strategies and backed by massive secular trends. If you are looking for a steady-eddy dividend stock, this article is not for you. However, if you are looking for an increasingly attractive opportunity that is trading at a large discount to its compelling long-term potential, then this stock is worth considering, especially after the recent share price decline. In this report, we review the business strategy, the market opportunity, the valuation and the risks, and then conclude with our opinion on investing.
Inflation Antidote: 25 Big-Dividend REITs, We Own These 5
With inflation screaming higher, the energy sector (and many commodity industries) have posted strong positive returns this year, while the rest of the market has languished. However recently, the financials sector (which is generally boosted by rising interest rates) is also starting to come on strong. And as the market continues to adjust to our starkly different macro environment (i.e., the Fed has shifted focus to battling inflation, which means increasing interest rates), what sector might be next in line for an upswing? Real Estate is worth considering, especially if you like a healthy dose of high dividend income to go along with the potential for compelling price appreciation. In this report, we share data on over 25 big-dividend REITs, including the ones we currently own.
Big-Yield CEFs: Discounts Are Widening (Bonds, REITs, MLPs, US Equities)
The prices of big-yield MLP CEFs have been rising, but not as fast as their NAVs, thereby creating some interesting opportunities, such as those offered by ClearBridge (including tickers: EMO, CEM and CTR). We share the data (including yields, premium/discounts and leverage) for 60 CEFs in this report, including multi-sector bonds, real estate and US Equities.
Powerful Dividend Growth, Attractive Value: This Business is Worth Considering
With the markets down significantly this year, there are attractive babies being thrown out with the bathwater, and this report reviews one such opportunity. Specifically, we review a highly profitable, rapidly expanding, common sense software application company that pays a healthy growing dividend and has a large total addressable market opportunity to keep growing the business for years to come. If you have the psychological wherewithal—this one is worth considering.
25 Big Dividends Down Big: Is 3M Worth Considering?
Many investors are struggling psychologically with the overall market declines this year. And one way they cope is by taking comfort in owning stocks with big healthy dividend yields. In this report, we share data on 25 big-dividend stocks (that are down big), and then take a closer look at one in particular, the 3M Company, before finally concluding with our opinion on investing in the market and 3M in particular.
3.8% Yield Industrial REIT, Worth Considering
Aside from backward looking financial metrics (which are good for this particular REIT), forward guidance is also attractive, and so too is the industry outlook attractive. Further, the balance sheet is strong for this monthly-dividend payer, and the valuation is reasonable (especially after the recent indiscriminate market declines). The dividend is well covered, and the company is getting ahead of the industry-trend towards environmental, social and governance (“ESG”) considerations. In this report, we review the business and conclude with our opinion on who might want to invest.
Powerful Contrarian Growth: This Is No Meme Stock
There is little doubt that this business is growing rapidly with a massive total addressable market opportunity (i.e. it has a long runway for continued growth). However the company is not profitable, its shares continue to be diluted, and in a fairly short period of time the share price has gone from high-flying pandemic darling to now a poster child for stocks to avoid in a rising interest rate environment. In this report, we review a variety of big headwinds the business currently faces, we consider several critical attractive qualities, and then we conclude with our opinion on whether a contrarian investment currently makes sense.
3.3% Yield Specialty REIT: Despite Price Weakness, Fundamentals Growing Stronger
Despite ugly performance for REITs this year, select names remain attractive. For example, shares of the specialty REIT we review in this report are down, but the fundamentals continue to strengthen (and the long-term outlook is compelling). In this report, we review the REIT’s highly-attractive business strategy (which positions it well for growth and income), fundamental strength, valuation and risks, and then conclude with our opinion on investing.
Big-Dividend REITs are Down: These 2 Are Worth Considering
So far this year, REITs have been the worst performing sector of the market. And that has created some attractive opportunities for income-focused investors. In this report, we review year-to-date market performance (what has been working and what hasn’t), we then dive into big-dividend REIT performance, and finally we highlight two big-dividend REITs that we believe are particularly attractive and worth considering for investment.
SaaS Business: Powerful Growth, Compelling Price
Better. Faster. Smarter. The Software-as-a-Service (SaaS) company that we review in this article helps organizations digitize and unify their workflows. That may sound like a lot of hot air, but it’s not. This is a real deal profitable business that is growing rapidly, has an extremely high customer retention rate and a massive long-term total addressable market opportunity (so it can keep growing rapidly). The company does not pay a dividend, but the shares have gotten relatively inexpensive during the recent “tech wreck,” and 5 years from now many people will wish they bought shares. We are long this stock, and it currently presents a compelling buying opportunity.
Another Standout BDC: 7.1%+ Dividend Yield
If you are looking for a high-income opportunity that is attractive on a risk-versus-reward basis, the BDC we review in this article is worth considering. Not only does it offer regular, supplemental and special dividends, but it stands out versus its BDC peers in terms of strong financial metrics and strong deal flow trajectory going forward. It also has support from a larger parent organization, it has significant interest rate hedging (by virtue of its largely floating rate portfolio and debts) and the recent share price pullback makes for an increasingly attractive entry point. In this report, we review the details and conclude with our opinion on investing.
Attractive 8% Plus Yield BDC: Interest Rate Risk Baked In
This big-dividend hidden gem of a BDC may be popular in certain niche investment circles, but if you haven’t considered it previously, it is attractive and worth a closer look. It has many of the important qualities you’d like to see in a BDC (such as internal management, strong NII and a healthy dividend), plus the growing macroeconomic interest rate risks are already baked in—to a significant extent. In this report, we dive into the important details (ahead of its upcoming earnings release on January 31st), and then conclude with our opinion on investing.
This 9.3% Dividend Yield BDC is Worth Considering
The BDC we review in this report offers a stable 9.3% dividend yield. It also has a strong liquidity position and a relatively defensive portfolio (attractive given current macro uncertainty). In this report, we review the business, valuation, dividend safety and risks. We conclude with our opinion on who might want to invest.
New Options Trade: High Upfront Income, Fear Creates Opportunity
High growth stocks have been selling off hard as the market is fearful of the fed’s indication of higher interest rates (as the "pandemic trade" continues to unwind). This has created an attractive opportunity to generate high upfront premium income in the options market. In this report, we share an income-generating options trade on an attractive long-term growth stock that has simply sold off too hard as a result of the market’s latest volatility and fear. In fact, premium income available goes up when short-term fear is high, and that is a big part of the reason why this trade is particularly attractive. 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 shares doesn’t move too far before then.
Attractive 5.9% Yield CEF: Non-Traditional Income-Sector Exposure
If you like high income, but worry that your portfolio is too concentrated in traditional high-income sectors of the market, then this 5.9% yield (paid monthly) closed-end fund (“CEF”) is worth considering. This particular high-income CEF gives you important diversifying exposure to high-growth sectors (such as technology—a sector traditionally known for low yield), and it also trades at an attractive price. The price is attractive not only for the current discount to NAV, but because the underlying holdings are positioned for long-term gains—which will help the fund continue to pay you big steady income. It also employs a compelling covered-call strategy, it has a relatively low management fee (important!), and it has a rock-solid management company. In this report, we dive into the details.
Attractive Big-Dividend BDC: 7.9% Yield
In addition to the healthy 7.9% dividend yield, there are lots of things to like about this attractive business development company (“BDC”), including its low exposure to cyclical industries, its impressive portfolio quality, extensive industry relationships and its conservative balance sheet, to name just a few. In this report, we review the business model, portfolio characteristics, strategies and advantages, portfolio performance, dividend yield and safety, financial position, risks and finally conclude with our opinion on the stock’s risk-reward opportunity at the current valuation.
2022 Income Investment Opportunities: REITS, BDCs, CEFs and MLPs
A Compelling Big Bank: 3.4% Dividend Yield
Big Banks have changed a lot since the great financial crisis, but in a lot of ways they have remained the same. They’re now subject to dramatically more stringent regulatory rules (e.g., “too big to fail”), but their profitability (and long-term value) is still derived largely based on the same basic metrics (e.g., book value and net interest margins plus fees). And despite media stories obsessed with which tech companies have the biggest market caps, big banks continue to generate among the biggest piles of net income. In this report, we review one big bank in particular, describing why the shares are undervalued, the 3.4% dividend yield is attractive, the current market opportunity, a review of the risks, and concluding with our opinion on who might want to consider investing.
Industrial REIT: Attractive Dividend and Share Price Growth
Some investors might overlook the attractive industrial REIT we review in this report because its current dividend yield is only 1.6%. However, this dividend has been growing faster than peers (and we expect this to continue), and the yield is lower than peers because the share price has also been growing significantly faster than peers (and we expect this to continue too). In this report, we review the REIT’s attractive business model (including ongoing market opportunities), its financials, valuation and risks; we conclude with our strong opinion on investing.