This continues our portfolio build with passive monthly income with stocks. How would you like 25 or more passive income checks each month?
Oxford Lane Capital Corp. is a close ended fund launched and managed by Oxford Lane Management LLC. It invests in fixed income securities. The fund primarily invests in securitization vehicles which in turn invest in senior secured loans made to companies whose debt is rated below investment grade or is unrated.
OXLC is projected to have EPS of $1.45 in the coming year. This is enough to cover the current $0.90 dividend at the current rate. This leaves room for a rate increase as the market stabilizes. The stock is down 33% in the past year. This indicates in an improving market the stock can return to the $8.00 52 week high for a 50% or more gain.
IBES has a strong buy rating at the current stock price. The 5-year projected earnings growth rate is 24%. This growth rate will contribute to more dividend increases in the coming years. With the 17% yield, you get your investment back in 4.2 years. Then, your investment is house money.
These high yield CEFs present an excellent opportunity to earn passive income TODAY in stead of waiting for dividend growth for years. I know you are thinking about dividend growth. However, we reinvest a portion of this high yielding income to growth more shares and income each month. This more than compensates for inflation and dividend growth. In addition, the high income accelerates your time to financial freedom.
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