With the market on pace to wrap up its best August in 30 years, now presents an interesting opportunity to generate attractive upfront income with a dividend capture covered call option strategy on Federal Realty Investment Trust (FRT). This trade may sound daunting because FRT is in the highly challenged “retail REIT” industry, and because this option trading strategy is less common. However, we believe the trade is an attractive one to place today, and potentially over the next few days, as long as the underlying stock price doesn’t move too dramatically and you can get comfortable with the moving parts of this simple yet attractive opportunity. On an annualized basis, the trade will net us up to 17% extra income over the next 47 days.
New Options Trade: Very High Upfront Income, Bullish Vertical Put Spread
A lot has changed since the onset of the pandemic, obviously. And healthcare is one sector that has felt the impacts. This article not only reviews an innovative healthcare leader, but we also share an attractive option trade that utilizes a lessor known (but not complicated) strategy, sometimes referred to as a bullish vertical put spread (not as scary as it sounds). The trade lets you generate attractive upfront income, while limiting your downside risk, limiting the amount of cash you need to set aside to secure the trade, and it also gives you the chance of owning a very attractive stock at a lower price. Given the stock’s recent price move, we believe this is an attractive trade to place today, and potentially over the next few trading sessions.
Simon Property Group: 8% Yield, Discounted Price, Real Risks
Retail REITs have been among the hardest hit stocks during COVID19 lockdowns, and blue-chip Simon Property Group (SPG) has not been spared. Its dividend has been reduced significantly and its share price has fallen dramatically. Furthermore, its former Taubman Centers (TCO) deal, recent retailer buying spree and rumors of a deal with Amazon (AMZN), complicate matters further. In this article, we review the health of the business, valuation, risks, dividend safety, and conclude with our opinion about whether SPG is worth considering if you are a long-term income-focused investor.
Verizon: 4.2% Dividend Yield, Oasis or Mirage?
Compared to high-flying tech stocks, dividend stocks have fared poorly since the onset of the pandemic, and some investors are left wondering if this trend is permanent. Verizon (VZ) is one such stock that investors have grown to trust (14 consecutive years of dividend increases), but just how safe is its business model? In particular, will its recurring subscription revenue stream (mainly from its wireless business) keep cash flowing? This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion on whether Verizon is worth considering if you are a long-term income-focused investor.
Federal Realty: A Dividend Aristocrat Among REITs
Despite having just increased its dividend for the 53rd consecutive year, retail REIT Federal Realty Investment Trust (FRT) has been hit hard by the current pandemic. Conditions have started to improve (e.g. more tenants are re-opening and cash collections are increasing), but in order to succeed FRT will need to make smart capital allocation decisions and manage its liquidity carefully (its dividend payout ratio is near the high end of its historical range). This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion on whether FRT is worth considering if you are a long-term income-focused investor.
New Options Trade (Triton): High Upfront Income on Short-Term Volatility
Intermodal shipping container company, Triton International (TRTN), announced expectation beating earnings last week, and the shares climbed significantly as a result. However, the shares gave back a large portion of those gain yesterday in a volatile trading session. In this article we share a Triton options trade that allows you to generate big upfront income and also gives you a chance to own an attractive big-dividend business at an even lower price. We believe the trade is an attractive one to place today, and potentially over the next few days, as long as the underlying stock price doesn’t move dramatically before then.
AT&T's +7% Dividend Yield: It's a Pandemic!
AT&T’s (T) share price has declined dramatically this year (due to the global Covid-19 pandemic), similar to declines when the Tech Bubble burst (early 2000’s) and during the Financial Crisis (2008-2009). However, AT&T’s dividend has continued to steadily rise for over 36 consecutive years (it’s a dividend aristocrat), and the current yield (over 7%) is the highest it’s been during the past two decades. This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion about investing in AT&T.
New Options Trade (GEO Group) : Very High Upfront Income, Politics and Covid
As if political narratives were not creating enough unjust downward pressure on the price of this “healthcare” REIT (The Geo Group), Covid has intensified the pressure, and the shares are simply trading too low due to fear. Further, the fear has increased volatility which has led to very high upfront income opportunities in the options market. We review a specific trade that we believe is attractive today (and potentially into early next week), as long as the underlying stock price doesn’t move too dramatically before then.
Undervalued BDC: Big Climbing Dividend (9.4% Yield)
This BDC’s decision to defer its dividend led to a sharp decline in share price. We believe fears are overblown given its solid portfolio, liquidity and track record of outperformance. Even after the most recent partial reinstatement of the dividend, the stock is trading at nearly 30% discount to NAV, and we believe it offers an attractive entry point for investors with a little appetite for risk. We do caution that a prolonged and severe downturn remains a risk to our thesis. This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion on investing.
New Options Trade: Very High Upfront Income as Welltower Shareholders Panic
As COVID-19 progress continues on two fronts (a vaccination and herd immunity), Welltower shares still trade like the world might end. And the panic has caused the upfront premium income available in the options market to remain extremely elevated and attractive. This report shares a compelling option trade that generates high upfront income and gives you the chance of owing shares of this outstanding high-dividend healthcare REIT at a compelling lower price. We believe this is an attractive trade to place today and potentially over the next few days, as long as the underlying stock price doesn’t move too dramatically before then.