It’s a great time to be a big-yield investor (6% to 13% yields). For starters, the aggressive interest rate hike cycle (that pressured the prices of interest rate sensitive securities lower over the last two years) has now ended (as per fed chair Jerome Powell, it’s unlikely the next interest rate move will be higher). And with interest rates now settling in at their highest levels in over two decades, certain out-of-favor contrarian opportunities are particularly compelling. In this report, we countdown our top 10 big-yield opportunities, including closed-end funds (“CEFs”), business development companies (“BDCs”), real estate investment trusts (“REITs”), dividend stocks and more.
PTY: Despite 3 Big Tax Risks, 10.1% Yield Worth Considering
There seems to be no shortage of big-yield investment ideas on the internet. However, any discussion of the associated tax consequences seems sparse. And despite this spareness, taxes have a major impact on your bottom line and should absolutely be a major consideration before investing. In this report, we first review important details on PTY’s big 10.1% yield, and then dig deeper into three big tax risks (including your account type, your personal tax rates, and the tax inefficiency of PTY versus compelling big-yield alternatives). We conclude with our strong opinion on investing in PTY and some general (but very important) advice on building a big-yield investment portfolio to optimize your after-tax bottom-line income.
Amazon: Ranking "The Magnificent 7" (Midyear Update)
As you can see in the table below, “The Magnificent 7” mega-cap stocks have posted incredible 10-year returns. However, there have recently been some big changes in the market (e.g. interest rate expectations) and to these seven businesses in particular (e.g. maturation, dividends, AI and more). In this report, we provide an update to our January rankings of the Magnificent 7 stocks, with a special focus on Amazon (AMZN) (including its business, four big growth drivers, valuation and risks). We conclude with our strong opinion on investing in Amazon (and each of the Magnificent 7) for the remainder of this year (and beyond).
Ares Capital: Building A Monster-Yield Portfolio (BDCs, CEFs, REITs)
If you are an income-focused investor, building a monster big-yield portfolio (8% to +11% yields), across a variety of categories (such as BDCs, CEFs and REITs), can help you achieve your goals. In this report, we share updated data on the top 7 securities (by market cap) in each of the three categories, and then dive deep into BDC Ares Capital (ARCC) (including its business strategy, current market environment, valuation, dividend safety and risks). We conclude with our strong opinion about constructing a high-income portfolio and about investing in Ares Capital.
This +13% Yield CEF is Attractive (Despite Distribution Source Dynamics)
Many investors love this big-yield CEF because of its strong track record of paying big monthly distributions. Whereas some others are traumatized by the dramatic share price volatility (mostly related to interest rates) in recent years. In this report, we review the fund, the distribution and price volatility sources, the section 19 notices (the distributions have been exceeding investment income and gains) and risks (misleading outside data sources, tax considerations, and the risk of a distribution “right sizing”). We conclude with our strong opinion on who might want to invest.
Paylocity: +14% on Strong Earnings Results
Quick Note: Aspen Aerogels +25% on Strong Earnings
100 Big-Dividend REITs, Compared
BlackRock's Big-Yield Bond CEF (BIT) Is Beating PIMCO’s (PDI): Here's Why
PIMCO’s big-yield bond CEFs are perennial favorites, however underdog BlackRock has been outperforming in some cases over the last 3-5 years. For example, BlackRock’s 9.8% yield bond CEF (BIT) is posting better total returns than PIMCO’s widely popular PDI. In this report, I explain why (including comparative metrics on distributions, leverage, potential return of capital and more), and then conclude with my opinion on how income-focused investors may want to consider allocating their income-focused investment dollars (i.e. PIMCO or BlackRock).
ServiceNow Earnings Note: Great Business, But What About the Valuation?
Meta Earnings Note: 5 Takeaways
PIMCO Big-Yield Bond Funds (PAXS, PDI, PDO, PTY): Distributions > NII
PIMCO’s big-yield bond funds are often an income-investor favorite because of their large 9% to 13% yields. Some investors have been traumatized in recent years as prices fell hard (when the fed rapidly hiked interest rates) while other investors haven’t cared as long as the big monthly income payments kept rolling in. This article provides an update on PIMCO bond funds now, and my opinion on which may (or may not) be worth considering for investment, mainly in light of how PIMCO is sourcing the distribution payments to investors.
Quick Note: Celsius - Pepsi Partnership
Capital Southwest: 40+ Big-Yield BDCs Compared
If you are an income-focused investor, big-dividend Business Development Companies (“BDCs”) are hard to ignore. However, not all BDCs are created equally. In this report, we review one BDC Capital Southwest (including its business strategy, dividend safety, valuation as compared to 40+ other BDCs, and the risks). We conclude with our strong opinion on investing in Capital Southwest in particular and BDCs in general.
This Payment Processing Software Company Looks Good
Top 10 High-Income NOW Securities
This note includes an update on our Top “High-Income NOW” securities, including a new Top 10 tear sheet and a link to the complete High-Income NOW Portfolio for April. The list remains dominated by one of the four main high-income food groups (CEFs, BDCs, REITs, big-dividend Blue Chips) based on current market conditions.
Top 10 Growth Stocks, Ranked (3 Megatrend Edition)
In case you’ve been living under a rock, Artificial Intelligence (“AI”) has been hot. Beneficiaries like Nvidia and Super Micro Computer have experienced truly incredible price rallies (thereby making lots of shareholders very happy). But the reality is, AI is not the only megatrend driving the market today (it’s not even the biggest one). In this report, we countdown our top 10 growth stock rankings, and we view them through the lens of three separate long-term megatrends (that could lead shares dramatically higher for many years to come). If you are a long-term growth investor, the ideas in this report are worth considering.
Snowflake: 20+ Top AI Stocks, Ranked
Fads come and go. Megatrends (such as urbanization and the internet) change the world. Certainly, megatrends can get ahead of themselves (there was an internet bubble in the early 2000s, and more recently China built entire cities expecting rapid pockets of urbanization that never happened). Some investors wonder if Artificial Intelligence (“AI”) is a fad, a megatend that has gotten ahead of itself, or still in its infancy. In this report, we address this question with a variety of data points (including comparative data on 20+ top AI stocks) and a special focus on big-data AI stock Snowflake (SNOW) (including its business, growth opportunity, valuation and risks). We conclude with our strong opinion on AI as a theme and Snowflake as an investment opportunity.
Alphabet, Big Risks: Bing AI, Apple DOJ, Meta-Like Spending
Alphabet (GOOGL) shares are up a measly 7.9% this year, and up 10.8% over the last two-years. That may not sound too bad, but compared to other mega-caps like Microsoft (MSFT) (+14.2% ytd, +45.9% 2yr) and Meta Platforms (META) (+44.1% ytd +141.2% 2yr), Alphabet has been lackluster (and some investors worry it’s increasingly going the way of Apple (AAPL) (-10.4% ytd). In this report, we review Alphabet’s business, its big risks (e.g. AI threats, challenges from being enormous, high spending) and its current valuation. We conclude with our strong opinion on investing.
Arbor Realty: 13.3% “Sucker Yield,” 3 Better Big Divided Strategies
If you are an income-focused investor, Arbor Realty Trust (ABR) may be extremely tempting because of its massive dividend yield (currently 13.3%) and long-term track record of success. However, this mortgage REIT checks all the boxes for a “sucker yield,” and there are far better investment opportunities if you like to generate high income. In this report, we share 10 reasons why Arbor Realty Trust may be a sucker yield (i.e. a dividend that is “too good to be true”), and then conclude with three superior big-dividend strategies for you to consider.