Sharing Updated Data: Big-yield BDCs have been particularly weak over the past few weeks (following earnings), especially in light of widening credit spreads (i.e. lending risk) and a looming rate cut by the fed (which will negatively impact some floating rate recipients more than others). Sharing updated comparison data on 35+ big-yield BDCs, plus a brief opinion on whether now is the time to buy or head for the hills.
High Income NOW: Updated Top 10 Tear Sheet, 23-Position Portfolio (9.7% Yield)
Our Top 10 “High Income NOW” Tear Sheet has been updated. And so has our complete 23-position “High Income NOW” Portfolio (aggregate yield is 9.7%). There have been several new positions added, two complete sales and some rebalancing of existing positions. You can also access “buy under” prices relative to current market prices, plus additional aggregate and security-specific data.
SCHD Part 2: Easy Alpha
In part one of this report, we explained why the Schwab US Dividend Equity ETF (SCHD) is for winners (including its growing dividend, low volatility and more). In this part two, we explain how SCHD can easily add big alpha to investor returns (in four very specific ways). In the conclusion of this report, we explain why many “SCHD haters” are usually barking up the wrong tree (they’re typically earning no alpha anyway) as well as our strong opinion on who should consider investing.
SCHD: Built for Winners
If you are looking to hit it big—move on, this article is not for you. If you are looking for healthy returns, healthy dividend income and healthy diversification (especially as certain mega cap growth stocks may seem precipitously overvalued), keep reading, this article might be for you (especially if you also like low fees, low volatility and tow taxes). In fact, all of these things, and more, combine to make the Schwab US Dividend Equity ETF (SCHD) a compelling opportunity for “emotionally intelligent” investors. And after reviewing the fund in detail (including the risks), we conclude with our strong opinion on investing.
Forget High Growth: Top 10 Big Yields Worth Considering (August Edition)
There comes a time in every investor’s life when they realize chasing high growth stocks makes absolutely no sense whatsoever. Sure, if you’re 25 and want to roll the dice (on “the next big thing”) go for it. But if you’ve built a nest egg, and you just want your investments to produce big steady income, this report is for you. We countdown our top 10 big yield investments (including REITs, BDCs, CEFs and more) with a special focus on why each opportunity is uniquely attractive right now.
A Top CEF: Big Steady Income, AI and Fed Tailwinds, Tax Advantages
The closed-end fund (“CEF”) we review in this report offers a big, steadily-growing, monthly-paid, tax-advantaged distribution (currently yielding 8.2%). And the fund does so by owning utility-sector stocks (known for lower volatility and steady dividend payments). In this report, we review the fund (overview, philosophy, investment process), its advantages (tax favorability, monetary policy impacts and artificial intelligence tailwinds) as well as risks (expenses, leverage, price premium). We conclude with our strong opinion on who might want to consider investing.
Quick Note: NXP Semiconductors Earnings Note
Rough Week for Stocks: Do This Now
In a major market reversal, leading mega-cap and semiconductor stocks have sold off hard over the last week (see table), and a lot of investors are concerned this may be the beginning of something much worse. We’ve been hearing for months, even years, these names were over-extended, and some investors are flummoxed about what to do (i.e. is it time to dump growth and tech stocks, and dive headfirst into value stocks—or even bonds?). In this quick market snapshot report, we share our strong opinion about what investors should be doing right now.
PDI: PIMCO Vs. BlackRock, 10 Big-Yield CEFs Compared
If you are an income-focused investor, you’ve likely considered PIMCO’s popular big-yield bond funds (often yielding in excess of 10%, paid monthly). You may have also considered BlackRock funds (although many perceive them as second rate to PIMCO). In this report, we compare high-level data on 10 big-yield bond funds (from PIMCO and BlackRock), and then dive deeper into PIMCO’s 14% yielding Dynamic Income Fund (PDI), including a discussion of its risks (such as leverage, interest rates, insufficient distribution coverage, confounding interest rate swaps and the potential for delayed recognition of “Return of Capital” that was previously taxed as ordinary income). We conclude with our strong opinion on investing.
Software Application Stocks: Interest Rates, Market Rotation and 3 Attractive Opportunities
So the latest reports of cooling inflation triggered some market rotation this week, and there could be more to come. One group that may be particularly well-positioned for gains is select software application stocks. For example, the group has been underperforming the market, but the fundamentals have remained strong. In this report, we briefly review changing interest rate expectations, sector rotation, and 3 top software application stocks, especially as the AI boom proliferates beyond just phase one hardware/semiconductors).
ADX: New 8.0% Distribution, Shrinking Discount to NAV (Tender Offer)
Quick Note: As we wrote about previously, this attractive CEF recently announced initiatives to shrink its discount to NAV (good for shareholders). The initiatives include a newly increased distribution, plus a public market tender offer to acquire up to 10% of the shares at 98% of NAV. And as you can see in the chart below, things are going well.
Experiential REIT: Despite Risks, 6.0% Yield Worth Considering
If you are an income-focused investor, Real Estate Investment Trusts (“REITs”) can be attractive. And one REIT that stands out for its growing dividend yield (and growing funds from operations) is VICI Properties (an “experiential” REIT best known for its Caesar’s Palace and MGM Grand properties on the Las Vegas strip). In this report, we review VICI’s business (including what makes it special), dividend safety, valuation and risks. We conclude with our opinion on investing.
Top 10 Growth Stocks (July Edition): Market Rotation Opportunities
Owning top businesses for the long-term doesn’t mean turning a blind eye to the risks and rewards of market rotation. While Main Street is just now hearing about Nvidia for the first time (it’s up nearly 3,000% over the last 5-years), most investors know chip stocks (like Nvidia) are notoriously cyclical and (despite powerful long-term megatrends, like AI) 50% pullbacks are not uncommon. In this report, we countdown our top 10 growth stocks (July edition) with a special focus on market cycle risks and outstanding opportunities with big long-term upside.
Enovix: Despite Risks, Big Upside
As smart phone energy demands grow (especially with the proliferation of AI apps), Enovix is working to scale its disruptive battery architecture to improve efficiency and capacity. And the company’s total addressable market (“TAM”) is enormous, expanding beyond just smart phones and into wide-ranging Internet of Things (“IoT”) devices and electric vehicles. In this report we review the Enovix solution, TAM, progress, valuation and risks. We conclude with our strong opinion on investing.
Nvidia: Despite Red Flags, It’s Going Much Higher
Nvidia is the dominant seminconductor leader powering explosive megatrend growth in the great cloud migration and now artificial intelligence. And these truly massive megatrends are not coming to an end anytime soon. However, there are multiple glaring “red flags” for Nvidia. In this report, we review the business, growth, market size, current valuation, moat and then four massive red flags investors need to consider. We conclude with our strong opinion on investing.
Top 10 Big-Yields: REITS, BDCs, CEFs (July Update)
Concentration can help you get rich, but diversification helps you stay rich. And if you own 25 different flavors of big-yield mortgage REITs—you’re still not exactly “well diversified.” In this report, we countdown our to 10 big-yield opportunities, with a special focus on diversifying your risks (across different investment types) while simultaneously keeping your income high.
50+ Big-Yield CEFs: These 2 Worth Considering
In this quick note, we’re sharing updated data on 50+ big-yield closed-end funds (“CEFs”) from across categories. You likely recognize many of these top names. We’re also highlighting two in particular that are attractive because of management’s new active initiatives to shrink the discount to NAV (a good thing).
Main Street Capital: 40 Big-Yield BDCs Compared
BDCs are often an income-investor favorite (thanks to their big growing dividends). And among BDCs, Main Street Capital (MAIN) has consistently been a top performer. However, investors frequently misunderstand Main Street’s fundamentals (i.e. they incorrectly believe price-to-book is too high and they forget to properly consider special dividends when considering the yield). In this report, we share data on 40+ big-yield BDCs, considering current price-to-book values (versus history), current market conditions (including how much credit spread risk is priced in) and the breakdown of historical returns (in terms of price gains versus dividend income). We conclude with out strong opinion about investing in BDCs in general and Main Street Capital in particular.
Muni Bond CEFs: 2 Big "Tax-Equivalent Yields," Attractive
If you manage a big-yield portfolio in a “taxable account,” this report is for you. Municipal bonds are often exempt fom paying federal income tax, which means you can earn a higher “tax equivalent yield.” What’s more, certain well-managed and prudently-leveraged munipal bond CEFs trade at discounts to NAV and offer particularly compelling yields as management is taking actions to reduce the discounts (a good thing if you own them). In this report, we review two attractive big-yield muni bond CEFs that are worth considering for your taxable account.
Top 10 "High Income NOW" Securities Tear Sheet (June Update)
Quick Note: The Top 10 “High Income NOW” Tear Sheet has been updated for July (and it can be accessed below). There were a few minor updates. For example, we added to a big-yield municipal bond CEF (as an honorable mention) because of management’s announced efforts to reduce the price discount), and we added to a top BDC that recently sold off (as it presents an attractive buying opportunity after a price decline). Disciplined, goal-focused, long-term investing continues to be a winning strategy.