This powerful consumer internet company operates a leading digital entertainment business as well as an e-commerce platform and a digital financial services operation in Southeast Asia. The company operates in some of the fastest growing economies in the world. And it is benefiting from the tailwinds of global “Stay-at-home” orders. Not surprisingly, the stock has rallied over 200% since the start of the year. In this report, we analyze the business model, competitive strengths, financial position and finally conclude with our opinion on the stock’s risk-reward (as well as an interesting options trade idea that generates attractive upfront premium income).
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.
Income Via Growth: A Post-Pandemic Cybersecurity Winner
From time to time, we like to share highly attractive “income-via-growth” opportunities, and this is one of those times. This article is about a stock that pays zero dividend, but can provide a lot of spending cash to investors through long-term price appreciation. We believe it’s a good idea to sprinkle a few of these types of stocks into your portfolio, but if you are looking strictly for high dividend stocks, this article is not for you.
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.
Income Via Growth Stock: Bringing Much Needed Innovation to Healthcare
It can make a lot of sense for income-focused investors to generate some of their income from something other than dividends. And in this article we review an outstanding opportunity to generate attractive income through price appreciation. Specifically, this particular stock has a SaaS-style business model with predictable cash flows, a first-mover advantage, a large and growing addressable market, improving profitability, and a strong financial position. Yet even though its premium valuation is understandable, some investors may choose to only nibble at this opportunity now while hoping for a pullback to load up on more shares later.
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.
Income Via Growth Stock: Quality + Growth = Long Term Upside
If you are looking to generate powerful "income via growth" (i.e. selling some of your long-term winners to generate spending cash) this stock remains an attractive buying opportunity. It is one of the largest, well-diversified global SaaS companies. It has an attractive subscription-based business model that leads to stable and predictable cash flow generation. It also has a wide competitive moat to ensure future earnings growth. Further, it continues to deliver strong and consistent top and bottom-line growth (not to mention its robust balance sheet position, and significant FCF generation). This report reviews the business, COVID-19 impacts, competition and concludes with our opinion on investing.
New Options Trade: Chesapeake Bankruptcy Ripples High Income Opportunities
After surviving a near-bankruptcy experience in 2015-16, many investors didn’t expect Chesapeake Energy to file Chapter 11 as it just recently announced. And it’s not Chesapeake shares that we are interested in, but rather the shares of a midstream provider that derives 6% of its revenues from Chesapeake. Volatility has spiked, and fear has already caused the shares to sell off a little farther than they should have, in our view. As a result, this attractive high-income options trade opportunity has emerged. 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.
Spirit Realty: High Income Options Trade, Preferred Shares and Common Stock
Spirit Realty Capital (SRC) is a leading self-managed net-lease REIT that owns single-tenant commercial (mostly retail) real estate properties across the US. Investor sentiment turned sharply negative in February due to the Covid-19 outbreak, but the shares have experienced a marginal recovery in recent weeks. In this report, we consider the common shares, the preferred shares and the relative attractiveness of generating upfront income by selling out-of-the-money put options for investors fearing a second wave coronavirus sell off. In particular, we consider the business, Covid-19 impacts, ability to meet financial obligations, dividend and income prospects and finally conclude with our views on investing.
New Options Trade: Mortgage REIT Fear Creates High Income Opportunity
As market fear (as measured by the VIX) has been rising again (as fear of a big second wave of coronavirus rises), so too has the upfront premium income in the options market been rising, particularly for mortgage REITs. This report shares a compelling option trade that generates high upfront income and gives you the chance of owing shares of an outstanding mortgage REIT with attractive agency-backed MBS at a compelling lower price. We believe this is an attractive trade to place today and potentially tomorrow, as long as the underlying stock price doesn’t move too dramatically before then.
New Options Trade: Fear Creates High Income REIT Opportunity
As the market fear index (VIX) has been rising again, so too has the upfront premium income in the options market, particularly for property REITs. This particular report shares a compelling option trade that generates high upfront income and gives you the chance of owing shares of an outstanding blue chip property REIT at a compelling lower price. We believe this is an attractive trade to place today and potentially over the next several trading sessions, as long as the underlying stock price doesn’t move too dramatically before then.
New Options Trade: 2nd Wave Fear, Creates High Upfront Income Opportunity
As market narratives continue to focus on “second wave” coronavirus risks, stocks are selling off hard. We’d been enjoying a strengthening rebound up until last week, and this week is starting off down again. However, some businesses will be impacted less than others. This report shares an attractive upfront income-generating options trade on a business that will weather the storm thanks to its critical nature, strong cash position, long-term leases and the fact that it may benefit as many of its peers struggle. We believe this is an attractive trade to place today and potentially over the next several trading sessions, as long as the underlying stock price doesn’t move too dramatically before then.
7 Top BDCs: High Income, Only The Strong Will Thrive
Business Development Companies (“BDCs”) can be an important part of an income-focused investment portfolio. And the latest market nosedive gives investors another attractive bite at the BDC apple. However, not all BDCs are created equally. Specifically, some will thrive in the current environment, while others will struggle mightily. This article provides an overview of the current BDC landscape, explains why some are in much better shape than others, and then shares 7 top high-income BDCs that we believe are worth considering for investment, especially after yesterday's big market sell off.
New Options Trade: Very High Upfront Income, Another Bite at this BDC Apple
Some investors believe the market has rallied back too far, too quickly, and that we’re due for another significant pullback. And now with share prices starting to trade lower in recent sessions, fear is creeping back into investors’ minds. It is this fear and volatility that can increase the upfront premium income available in the options market, and give investors another chance to pick up attractive shares at lower prices. This report shares an income-generating options trade on a highly attractive long-term BDC investment. We believe it’s an attractive trade to place today potentially over the next few trading sessions, as long as the underlying stock price doesn’t move too dramatically before then.
CareTrust: Financially Strong, Despite the Pandemic
For years, investors have chased healthcare REITs with tenants funded by “private pay” because they feared ongoing government pressure on reimbursement rates. However, in this pandemic, it turns out they had it all wrong. CareTrust (CTRE) is a “mostly skilled nursing facilities” healthcare REIT, and it has benefited from generous government support during this pandemic. And on top of that, the CEO claims COVID hasn’t been as economically devastating as narratives suggest. This article reviews the health of the business, valuation, risks, dividend safety (it yields around 4.8%), and concludes with our opinion on investing.
New Options Trade: Upfront Income, Frothy "Forever Stock"
There are certain blue chip stocks that are basic staples in many investors’ portfolios. These are often safe dividend payers that can be trusted to earn income (and pay dividends) throughout the market’s ups and downs. However, from time-to-time, these stocks can get a bit frothy, and the near-term upside can seem limited. This is our view on the stock covered in this report, and we are sharing an options trade that generates upfront income and adds discipline to your sell decisions. We current own these shares, and we believe this is an attractive trade to place today (and potentially over the next few trading days) as long as the price doesn’t move too dramatically before then.
Where Are the Best Opportunities Now? (Holdings and Performance Review)
In case you’ve been living under a rock, the market has been volatile this year, and income investments have performed extraordinarily poorly. To some, this is an exciting opportunity to look for undervalued gems to add to your portfolio (and we’ll share a variety of attractive opportunities in this report). But it’s also a good time to consider the dramatic ongoing changes to the way businesses operate, and to take a long hard look at where you’re going to invest your nest egg to generate the best income to support your needs going forward.