The negative impacts of COVID-19 have been particularly pronounced for many Business Development Companies (“BDCs”). Owl Rock Capital Corp (ORCC) is one example where the share price has been pushed lower and the dividend yield has mathematically risen to over 10% (over 12.5% if you count the recently declared special dividend). Owl Rock’s strong liquidity position will help it whether the current storm and take on attractive new opportunities once it has addressed the most pressing liquidity needs of its existing portfolio companies. This article reviews the health of Owl Rock’s business, valuation, risks, dividend safety, and concludes with our opinion about why it may be worth considering if you are a long-term income-focused investor.
New Options Trade: High Upfront Income, Property REIT Fear
The coronavirus has created major challenges for some sectors more than others, and property REITs have been hit hard. Uncertainty has lead to fear, dramatically lower market prices, and high upfront premium income available in the options market. This report shares an attractive options trade on a compelling big-dividend REIT. We believe the this is an attractive trade to place today, and into early next week, so long as the underlying stock price doesn’t move dramatically before then.
Gladstone: Danger Ahead for this Popular 9.0% Yield BDC
If you count the recently declared ordinary and supplemental dividends, popular Business Development Company (“BDC”) Gladstone Investment Corp (GAIN) yields approximately 9.0%. And this is tempting to a lot of investors considering it pays monthly, the price is still down, and it appears to be in a strong liquidity position. However, GAIN’s portfolio of middle market companies is at risk of being negatively impacted by the coronavirus—more so than other BDCs. In this report, we analyze Gladstone’s business model, the coronavirus impacts, valuation, dividend safety and additional risks. We conclude with our opinion about investing.
Portfolio Tracker Tool Note
Forget FAANG: Top 12 Big Dividends
Some investors cannot handle the volatility and lack of income from FAANG stocks, and the Fed's near-zero interest rate policy creates challenges to income-focused investors too. Popular growth stocks are near all-time highs, while value and dividend stocks are down significantly. This report shares our Top 12 big dividends, selected from REITs, BDCs and Preferred Stocks.
Main Street Capital: Dividend Uncertain, Upside Clear
Income investors had grown to love Main Street Capital’s (MAIN) big, safe, monthly dividend so much that its share price had risen to a dramatic premium relative to its net asset value (“NAV”). Then the coronavirus hit. The share price plunged, once loved supplemental dividends have been suspended, and even the “sacred” regular dividend is now at risk. In this report, we analyze the company’s background, impacts of the coronavirus on its business, earnings power, the dividend, valuation and risks to understand whether now is the right time to establish or add to existing positions.
Ares 12% Yield: It Sticks Out Like A Sore Thumb
Ares Capital (ARCC) is a big-dividend business development company (“BDC”) that has sold off hard during the pandemic because of its exposure to small (“middle-market”) businesses (i.e. the business than have been hit particularly hard). In this article we review the business (including important sector exposures), the balance sheet liquidity (to deal with the crisis), dividend safety, valuation and risks, and then conclude with our opinion on why this particular BDC stands out like a sore thumb.
New Options Trade: High Upfront Income from International Trade Uncertainty
A lot of people believe the market is due for another leg down in the short-term. We acknowledge that risk is on the table, but no one can predict short-term market moves (if they tell you they can—just know they cannot). However, if you like generating big upfront income, that also gives you a chance to own an attractive big-dividend business at an even lower price, then you may want to consider this trade. We believe the trade highlighted in this article is an attractive one to place today, and potentially over the next few days, so long as the underlying stock price doesn’t move dramatically before then.
New Options Trade: High Upfront Income, Proactive Dividend Deferment, Saratoga Investment Corp
We are sharing a new options trade that generates high upfront premium income. Business Development Company (“BDC”) Saratoga Investment Corp (SAR) (they provide financing to small middle-market companies) was recently firing on all cylinders, but has decided to proactively defer dividend payments to shareholders as a result of the coronavirus. We believe the trade highlighted in this article is an attractive one to place today, and potentially over the next few days, so long as the underlying stock price doesn’t move dramatically before then.
Where Are The Best Opportunities Now? (Holdings and Performance Review)
If you are not exhausted from recent stock market swings—congratulations! You either have nerves of steel or you’ve been wisely “Rip-Van-Winkling” the sensationalist media pundits as a sage long-term investor should. As you can see in the chart—the market has been very volatile this year. This report highlights some of the best investment opportunities now. We also review our current holdings and recent portfolio performance.
Two (2) Preferred Stock CEFs: Big Monthly Income, On Sale
The preferred shares of many companies are now trading at attractively discounted prices as the COVID-19 pandemic has stoked fear among investors. And in many cases, this fear is unwarranted. One attractive way to play this opportunity is through closed-end funds (“CEFs”) that focus primarily on preferred stocks. This article highlights two compelling closed-end funds, offering big monthly income payments to investors (they yield 7.6% and 7.8%, respectively), and they’re currently trading at attractively discounted prices (thereby providing an opportunity for some price appreciation—in addition to big monthly income).
Triton Preferred Shares: Post-Pandemic Reality
Triton International (TRTN) is an intermodal shipping container company, and the big-yield common and preferred shares have been impacted dramatically by the worldwide COVID-19 pandemic. The company just released earnings, and gave us some important new insights. This report reviews the impacts of the economic slowdown on Triton’s business, its financial wherewithal (particularly cash), the competitive dynamics of the industry (and what might happen if Triton can weather the COVID-19 storm), valuation and risks. We conclude with our opinion about investing in the common (7% yield) and preferred (+9% yield) shares.
3 New Trades: New “Top Buys” Category Added to Portfolio Tracker Tool
We don’t trade often, however we’ve just placed three (3) new trades in our Blue Harbinger portfolios. We’ve also updated our Portfolio Tracker Tool to reflect a new “Buy Under” category called “Top Buys.” Both of these updates are based on current market conditions, and both are designed to help you manage your own investments. This report reviews the updates, including the trades and the current “Top Buys” within our existing portfolio holdings.
Realty Income: COVID-19 Big Loser or Big Winner? Here's Our Opinion
Realty Income, self-proclaimed “The Monthly Dividend Company,” is a revered dividend aristocrat with a 5.2% dividend yield and it has delivered for many investors for decades. But it’s still a retail REIT, and the impacts of COVID-19 social distancing are different than anything the company has experienced in the past. The shares have sold off hard, and some investors are left wondering if this a big warning or a big opportunity? This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion on investing.
Facebook: Money Printing Machine, On Sale
From time to time, we like to share attractive “Income via Growth” stocks. These are stocks that don’t necessarily pay big dividends, but they do provide the potential for diversified long-term high income from price gains (i.e. selling some of your winners to generate income). And the stock we review today is an absolute money printing machine, trading at a very compelling price thanks to the coronavirus sell off. Specifically, this company is a fast grower, with a wide moat, high margins, no debt and lots of cash. Simply put, it’s a money printing machine.
Helicopter Fed: Top 10 mREITs and Bond CEFs (Huge Yields, Discounted Prices)
This article shares our Top 10 compelling mREITs and Bond CEFs. They trade at significant discounts to their book values and are being supported, to varying degrees, by the actions of the US Fed. The Fed is pumping an unlimited amount of liquidity into the system by buying the types of bonds these compelling mREITs and CEFs own.
Paylocity: Attractive Business, Attractive Price, Powerful Upside
At Blue Harbinger, we make it a point to diversify our holdings across attractive opportunities among different styles and sectors. This diversification not only reduces risks, but it opens up more attractive opportunities. This article focuses on a cloud-based payroll processing company that can provide investors powerful long-term income through price appreciation. We’ve owned this stock since 2015, and believe the current market selloff makes the upside potential (i.e. income via growth) extraordinarily attractive in the quarters and years ahead.
Double-Digit Yields: Natural Gas and The Companies that Move It
The volume of natural gas demanded did not go down appreciably during the Great Recession nor the 2015 oil price crash, and it won't here either. Thus firms whose main business is moving natural gas from here to there for a fixed fee are not going to be that heavily affected. This guest article (from Darren McCammon) reviews two such companies that currently offer attractive, well covered, double digit dividend yields (we currently own one of the two). According to Mr. McCammon “these are exactly the type of firms one should be buying greedily as everyone else runs in fear.”
Stay Safe: Hold Your Nose and Buy
The coronavirus is impacting everyone’s lives far beyond just the stock market (which has been ugly). And we hope that everyone is staying safe in this new “social distancing” reality. As for the stock market, if you’ve had your investment portfolio strategy in place before this mess, then stick to it. Disciplined long-term investing has been a winning strategy throughout history, and it will this time too. If you have been sitting on extra cash that you’ve been meaning to invest—hold your nose and buy.
Omega’s 10% Yield: Is Low Private Pay Now a Strength?
The high percentage of government-subsidized tenants (i.e. Medicare and Medicaid) of Omega Healthcare Investors (OHI) is often considered to be a bad thing (because the government creates painful pricing pressure that doesn’t exist among private pay tenants). However, in light of the coronavirus crisis, government support has become more attractive, and this shift is strengthened as Omega’s Skilled Nursing Facility (SNF) industry is in a much better place (in terms of supply and demand) than it was just a few years ago. In this report, we review Omega’s asset mix, market dynamics, dividend prospects, risks, and then conclude with our opinion on investing.