Shares of this LNG shipping company have gotten crushed in recent weeks due to cyclicality of the business, uncertainty about new International Maritime Organization (“IMO”) Environmental Regulations, and an analyst warning about the risk of a distribution reduction. However, there are reasons to believe the market has dramatically overreacted and the dividend will still be very large and attractive (even after any speculated reduction). Rather than buying the shares outright, the premium income available in the options market is enormous and attractive.
Are You Ready for Election-Year Fearmongering, Volatility?
If it’s not painfully obvious yet, it will be soon—2020 is an election year, so get ready to be inundated with political ads, media fearmongering and probably a lot more market volatility, particularly in some areas of the market more than others. So what can an investor do to prepare? Two things in particular stand out…
Healthy 10.8% Yield: Political-Hot-Air-Driven Sell Off, Attractive Entry Point
Political rhetoric has created an attractive buying opportunity in this healthy 10.8% dividend yield company. The shares have sold off hard despite solid cash flows and a high demand business with long-term visibility. The rhetoric has heated up heading into this year’s election cycle, but this is a story we’ve seen before whereby the shares quickly rebounded following the elections. If you like big dividends and attractive buying opportunities, this one is worth considering.
Phillips 66: Powerful Dividend Growth, Significantly Undervalued, So What Gives?
Phillips 66 (PSX) has a diversified business model that reduces earnings volatility and delivers steady cash flows. As such, it has been able to raise its dividend every year for the last seven consecutive years. The stock offers a solid dividend yield of 3.4% along with a high probability of dividend increases and price appreciation. In this article, we dig deeper to ascertain the sustainability of dividends and also the company’s growth prospects. We review the health of the business, cash flow position, balance sheet flexibility, valuation, risks, dividend safety, and conclude with our opinion about why PSX may be worth considering if you are a long-term income-focused investor.
Simon Property Group: Enticing 5.6% Yield, Pristine Balance Sheet
Simon Property Group (SPG) is a retail REIT, with a pristine balance sheet, and a consistent history of growing revenue and dividends. However, growth in revenue has slowed marginally due to a rise in retail bankruptcies (online shopping is disrupting traditional retail). This article reviews the business, the enticing 5.6% dividend yield, the valuation, the risks, and concludes with our opinion about investing.
Portfolio Tracker Tool Update
This week’s Weekly reviews the latest iteration of our portfolio tracker tool. It lists holdings by portfolio with real time position pricing. It also has “buy under” prices, position performance and a variety of additional bells and whistles. It is designed for your convenience. The link to the Portfolio Tracker Tool is Below.
This Data Center REIT: Healthy Growing Dividend, Buyout Is Coming…
This particular data center REIT offers an attractive investment opportunity for investors seeking steady growing dividend income (it’s raised the dividend 7 years straight) along with the strong potential for capital gains (the growth outlook is attractive) and a likely buyout (it will get acquired at a premium price…a good thing) in the relatively near future. A significant push into Europe has been a drag on margins which remains a near term concern (i.e. a buying opportunity!). This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion about why this particular REIT is worth considering if you are an income-focused investor.
GasLog Partners: Solid 14.1% Yield, Cyclical Sector, Preferreds Yield 8.5%
GasLog Partners has a history of paying and raising distributions consistently despite being part of the highly cyclical LNG shipping industry. The 14.2% distribution yield on the common shares is interesting (and so are the preferred shares), especially considering the likelihood of price appreciation. In this article, we review the health of the business, cash flow position, balance sheet flexibility, valuation, risks, dividend safety, and conclude with our opinion about investing in GasLog.
New Options Trade: Big Upfront Income, Big-Dividend Blue Chip, Shortsighted Fear
People are afraid of what they don’t know, and even though this company is a well-proven large-cap blue chip, investors are unsure of it because it recently separated into a standalone company from another large cap blue chip. And because of this uncertainty, combined with near-term pricing pressures, investors are afraid. And we like that because it’s creating an attractive income opportunity in a big-dividend blue chip company with lots of cash that it is using to support the dividend, buyback shares and support the ongoing long-term success of the business. We believe this is an attractive trade to place today, and potentially over the next few trading days as long as the share price doesn’t move too dramatically before then.
Another Successful Year In The Books, Introducing "Buy Under" Prices
2019 was another successful year. Our “Income via Growth” strategy finished the year up 51.6%, “Income Equity” added over 28% (and yields 5.9%), and our “Alternative Fixed Income” strategy currently yields an impressive 7.5% (with relatively very low risk). We’re also kicking off 2020 by adding a “Buy Under” price for every position in every portfolio to help readers monitor positions more closely and more easily.
These 4 Muni-Bond CEFs: Powerful Non-Taxable Income, Low Risk
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.