In light of recent turmoil, the Fed has now promised to do whatever it takes to support the bond market, Agency MBS in particular. Mortgage REITs that own Agency MBS are worth considering. Specifically, Agency MBS credit spreads have dropped significantly, yet mREIT share prices continue to trade at wide discounts to book values. Mortgage REITs present huge yields and huge opportunities.
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.
PIMCO Bond CEFs: Are You Betting Against The Fed?
Many popular PIMCO closed-end funds (CEFs) have sold off particularly hard as investors fear the potential impacts of a coronavirus-driven recession. Further, large CEF premiums versus net asset values (NAVs) have evaporated into unusually large discounts as selling pressure has been intense. Further still, the price declines have been exacerbated by a drying up of liquidity in the bond markets. And even though the US Fed has dramatically increased its quantitative liquidity easing in the treasury and agency Mortgage Backed Securities (MBS) repo markets, just this week it announced that it will “be moving for the first time into corporate bonds, purchasing the investment-grade securities.” To some investors, the Fed’s essentially unlimited buying power is terrifying, and to others it is highly reassuring. Will you be betting against the Fed?
Big Monthly Dividend REIT: High E-Commerce Exposure Reduces Coronavirus Risks
This single tenant focused industrial REIT offers healthy monthly dividend payments (8.0% yield) and the potential for significant price appreciation. We believe it will benefit from the current uncertainty amid the coronavirus outbreak given its high exposure to the e-commerce sector. The trend for online shopping is a secular one but has become more prominent currently as people are forced to stay at home. We do caution that the current situation will impact the business but given its diversified portfolio and high exposure to e-commerce we expect healthy price appreciation once the situation returns to normalcy. This article reviews the health of the business, valuation, risks, dividend safety, and concludes with our opinion about why it’s worth considering if you are a long-term income-focused investor.
These 2 Big-Income Bond CEFs: Buy! Buy! Buy!
This is a very quick note, and it is intended to get this information to you quickly. There are currently a variety of attractive Bond CEF’s that are presenting extremely attractive buying opportunities based on their holdings, their currently discounted prices and their temporarily massive discounts to Net Asset Value (“NAV”). These particular Bond CEFs pay you income monthly (double-digit yields), we own them, and the current buying opportunity is highly attractive.
Buy Low: Top 10 Big-Dividend REITs, On Sale
The market has been ugly. But as they say, this too shall pass. And when it does, the most attractive buying opportunities will be gone. No one knows the exact timing of when the turmoil will end, but there are currently a lot of REITs trading at compelling prices (there is enormous fear baked in) and offering unusually attractive big dividend yields. And it’s those big dividends that can give you the steady income you need while you wait patiently for the long-term price gains to come to you. This report counts down our top 10 big-dividend REITs.
High Quality, Stable REIT: 5.6% Yield, Attractive Valuation
The recent market wide sell off has been ugly. This article focuses on a REIT that is particularly attractive considering management has been a sound steward of capital by simplifying the business model, lowering the cost of capital and growing the dividend. Further, this REIT may be poised to take advantage of current market distress thanks to its lower debt and the cushion it enjoys relative to debt covenants. If you are a long-term income-focused investor, this one is absolutely worth considering (we own it).
Market Volatility: Avoid Unforced Errors
The market has been volatile. For example, the extreme daily up-and-down moves for the Dow are shown in the following chart. And that is a 30-stock index! Individual stocks, such as Ventas (VTR), New Residential (NRZ) and most energy names, have experienced daily moves even more extreme. The three main causes of the volatility are (1) The Coronavirus, (2) Plummeting Oil Prices, and (3) A market that was richly valued and looking for an excuse to pull back. And pull back it did. The main point of this message is to remind readers to…
An Attractive Blue-Chip Healthcare REIT, Solid 5.4% Dividend Yield
This attractive blue-chip healthcare REIT offers a solid dividend and the potential for healthy long-term growth. We are impressed by its dividend history, healthy payout ratio, investment grade credit rating and significant demographic opportunity. The FFO growth outlook for 2020 is back to positive after a few years of challenges. This article reviews the health of the 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.
In the Face of Panic: Selling Income-Generating Put Options, Phillips 66 Edition
Trying to call a bottom to the current energy and coronavirus-driven market sell off is a fool’s errand. No body knows. It could end soon or it could be long and drawn out. However, it’s okay to be a bit opportunistic during the current market sell off, so long as it is consistent with your long-term investment goals (e.g. “be greedy when others are fearful,” and “buy when there is blood in the streets.”). One such opportunistic strategy that’s become particularly attractive now, is selling out-of-the-money income-generating put options on stocks you’d like to own for the long-term. This article shares one such example, Phillips 66 (PSX).
Powerful Upside: This “Income via Growth” Stock Is on Sale
From time-to-time, we like to write about “income via growth” stocks at Blue Harbinger. These are stocks that can provide high income to investors through long-term capital gains (i.e. selling some of your winners). We write about these types of stocks because they can bring important risk-reducing diversification to an otherwise dividend-focused investment portfolio. And we are writing about this particular opportunity because we own it, and because it is particularly attractive right now following the recent market turbulence.
3 Horrible Market Mistakes (To Avoid During A Volatile Market)
As the market continues to be volatile, we’re taking a moment to share some investing and trading advice that seems particularly relevant right now. You can always check out our current holdings and ratings here, and we’ll have more individual stock write-ups soon, but this article is about 3 horrible trading mistakes that many investors unfortunately make at times like this (i.e. when the market is very volatile).
Attractive 13% Yield REIT: Unfairly Punished by Mr. Market
Mr. Market was already unfairly punishing this big-dividend REIT, but the recent market wide turmoil has made the price absurdly low and attractive. In this report, we analyze the company’s income profile, growth, dividend prospects and political risks. We conclude with our opinion on whether this big yielder is worth considering for a spot in your prudently-diversified, long-term, income-focused investment portfolio.
Don’t Panic: 4 Strong Buys (Monthly Performance Update)
The market just got pummeled, and there could be significantly more short-term pain ahead. However, long-term, this market is eventually going higher (the US and global economies are just too resilient). And there are some tremendous buying opportunities, right now. This is our monthly performance update, whereby we share updated performance for each of our investment strategies (they’re all still beating their benchmarks handily, and delivering strong income, despite the recent sell off). We also share 4 strong buying opportunities presented by the market (it’s like Christmas to those with cash).