Get Rich - Stay Rich - Investing for Monthly Income

Posts Tagged ‘HIGH YIELD DIVIDEND INVESTING’

How to Earn a Potential 134% Return with a 16% Dividend Yield

We strive to create monthly income by investing with several strategies. One long-term play for our monthly dividend stock portfolio is Center Coast Brookfield MLP & Energy Infrastructure Fund (CEN). While the energy sector has been soft in the past year, this has brought the energy stock prices down with it. This stock has a great monthly dividend with some significant price upside too.

This CEF trades around $7.80, which is close to the NAV. The big win is you get a 16% dividend with monthly distributions. This means you get all of your capital back in 4.5 years and still own the stock. According to Yahoo Finance, analyst have a 12-month price target of $17 on this stock. This is an increase of 118% on price alone. Therefore, your total return is projected to be 117% plus 16% dividend that equals 134%!

You should not fear the talk of return of capital. A distribution received from the Fund’s investments in MLPs generally are comprised of income and return of capital. The Fund’s dividend distribution policy is intended to provide monthly distributions to its common shareholders at a rate that over time is similar to the distribution rate the Fund receives from the MLPs in which it invests, without offset for the expenses of the Fund.

The Fund seeks a high level of total return with an emphasis on distributions to shareholders through investing in MLPs and energy infrastructure companies. Under normal market conditions, the Fund will invest at least 80% of its Managed Assets in securities of MLPs and energy infrastructure companies. The Fund may invest up to 20% of its Managed Assets in unregistered or restricted securities, including securities issued by private companies. The Fund may invest up to 10% of its Managed Assets in securities of issuers located outside of North America.

Regardless of the recent market swings, our outlook for the asset class remains favorable. To start, the corporate and financing maturation process that has contributed to sector-specific price volatility over the last several quarters appears to be largely behind us. Since the beginning of 2018 there have been over 15 simplification transactions resulting in generally healthier, lower risk companies in the sector, lower financial leverage, better distribution coverage, self-funding of capital expenditure and improved governance. This leaves us with less than 10% of the current market cap in structures with legacy corporate structures. In addition, public equity issuance is expected to significantly decrease, due to the transition to self-funding business models, reducing sector reliance on external equity capital markets. Sector fundamentals also remain robust as the energy industry set new records for production and transportation of U.S. hydrocarbons in 2018. The U.S. grew crude oil production by almost 20% in 2018 and is now the largest oil-producing country in the world—recently surpassing both Russia and Saudi Arabia—with output at 11.7 million barrels per day (MMb/d). Natural gas production is also at an all-time high after growing approximately 15% in 2018. Moreover, exports of U.S. crude oil, natural gas, and natural gas liquids (NGLs) hit record levels in 2018 and together grew by approximately 40% in 2018. We expect exports of U.S. hydrocarbons to continue to grow and expect that new projects will further add to our nation’s export capacity. One study estimates there will be almost $800 billion of new energy infrastructure investment through 2035 – with much of it expected to be centered around export activity on the U.S. Gulf Coast. Our optimism is somewhat blunted by geopolitical risks globally, and in particular, the worsening trade relationship between the U.S. and China.

At Get Rich Investments, this is the type of opportunities we want to create long-term passive income. I am a buyer here and you should consider adding this one to your income portfolio. We always have a diversified group of monthly dividend stocks to minimize market risk.

Join the Monthly Income Newsletter voted the best value for option income trading

Follow us on Twitter – @GetRichStayRich

Three Steps to Early Retirement as a Millionaire

Notwithstanding a strong U.S. economy, only 25% of Americans say they feel financially prepared for retirement, according to a report just issued by the Certified Financial Planner Board of Standards. : Close to 80% of participants surveyed say they are not reassured that they have the best retirement savings strategies available to them. The good news is, three simple steps can help people build wealth and retire early.

While anyone can benefit from these action steps, they can be particularly powerful for financial independence and early retirement.

1. Pay yourself first

The single most important decision you’re going to make is to pay yourself first. This means, when you earn a paycheck, the first person who gets paid is you. Most people don’t do this even if they have employer matching funds. They focus on paying bills and other personal expenses without considering saving money.

2. Invest your savings

To be clear, simply saving a lot of money doesn’t make you rich. You have to have this money invested for growth. You cannot put this money in a money market or a CD, where it grows at 1% or 2%. You’ll never build wealth that way. We have created an investing plan to purchase monthly dividend stocks. These investments pay you a dividend check every month. Even better, we focus on yields above 10% to beat the market. How would you like 5, 10 or 30 checks coming to you each month?

3. Compound your wealth

When you receive your monthly income, reinvest a portion into new monthly dividend stocks. This grows your wealth over time, increases your income each month and offsets the impact of inflation. Also, this creates a lasting legacy as you are living from the dividends and not touching your capital.

The earlier you start, the better, thanks to the power of compound interest, which can cause your wealth to snowball over time. Yes, early retirement is possible as your monthly income exceeds your living expenses.

Create your legacy by joining our Monthly Income Plan today.

$6.00 or 23% Special Dividend Announced

Generac Holdings Inc. announced that its board has declared a previously announced special dividend of $6 per share to be paid in June.  GNRC is trading at $26.00 so the $6.00 special dividend is a 23% yield.  Generac (GNRC) will use the remaining proceeds from the new term loans and cash on hand to fund a special cash dividend, which totals about $408 million, and for related refinancing fees.  The special dividend will be paid June 29 to shareholders of record June 20.

Booz Allen Hamilton Holding Corp (BAH) announced plans to pay a special cash dividend of $1.50 a share. With BAH trading at $15 per share, the special dividend is a 10% dividend yield.  This dividend is payable on June 29 to shareholders of record as of June 11.  In addition, BAH approved a quarterly dividend of 0.09 per share. The dividend is payable on June 29, 2012 to shareholders of record on June 11, 2012.

This 12% Dividend Yield is Still a Buy

Crexus Investment Corp. (CXS) operates as a specialty finance company in the United States. It acquires, manages, and finances commercial mortgage loans and commercial real estate debts, commercial mortgage-backed securities, and other commercial real estate-related assets.  The principal business objective is to provide attractive risk-adjusted returns to investors over the long-term, primarily through dividends and secondarily through capital appreciation.

CXS is trading at $11.21 and has a market cap of $865 million.  CXS raised their quarterly dividend from $0.30 to $0.35 in the 4th quarter, an increase of
16.7%.  CXS has a dividend yield of 12.49% that should remain solid in the near future.  CXS has increased its dividend for 8 straight quarters – from $0.07 in Q1 2010 to the current $0.35 in Q4 2011, a 400% increase within 2 years.

CXS reported fourth quarter core EPS of $0.49, $0.05 higher than the estimate. A larger than expected discount accretion accounted for the difference versus the estimate. GAAP EPS were $0.55 including $0.06 of gains from selling the Agency MBS portfolio.

Estimates: We are maintaining our 2012 and 2013 core EPS estimates and establishing a 2014 estimate at $1.35. Near-term visibility into earnings remains low given the volatility around discount accretion, but visibility should increase as the portfolio transition continues.

Investment activity: Crexus completed $143 million of investments during the fourth quarter including its first 2 triple net lease investments for a total
of $33 million. The company continues to make progress in transitioning the portfolio into longer duration higher yielding assets. We will look for management commentary on the call about the 2012 outlook for capital deployment given the sale of Agency portfolio and the current $200 million cash balance.

Revenues: Core net revenues totaled $41.4 million, 10% higher than the estimate.  For the fourth quarter discount accretion on the loan portfolio was $28.8 million versus $21.0 million expected and $30.9 million in the third quarter which accounted for most of the beat relative to estimates.

Valuation: Crexus is trading at a 6% discount to current book value and yielding 12.49%.

Reiterate Outperform: The transformation of the portfolio into higher yielding assets combined with the start of the triple net leasing investments increases our conviction that Crexus should trade at a premium to book value.  The current price to book is 0.94, buy CXS when it is below 1.0 and sell when it moves above 1.5.

Dividend Stocks with Bond-like Yields

While some wonder if dividend investing is a fad, the strategy probably has staying power. Bonds yield little, and short-term rates are near zero, leaving individuals with few places to find yield. Demographics favor income investing; millions of baby boomers retire each year, and they want income to supplement Social Security and minimize the drawdown of retirement assets.

Opportunities are limited in the bond market, with Treasuries topping out at 3% and high-quality 30-year municipals at only 3.5% after a sharp rally in recent months. These yields are near the lows of the past 50 years.  Companies with high and sustainable dividends are often valued more like bonds than stocks, partly because 4% and 5% dividend yields often are higher than the rates on many corporate bonds.

A 4% dividend seems to resonate with investors who are willing to pay premium prices for companies with high yields. Some of the strongest S&P 500 industry groups last year — utilities, consumer staples and drugs — had some of the index’s highest yields.  During 2011, high-dividend payers were the top-performing group in the S&P 500, with the top 50 yielders at the start of 2011 — all with 4%-plus yields — returning more than 8% (not including dividends), compared with a flat showing for the entire index, according to Birinyi Associates.

The companies on the list below, including Merck (MRK), Pfizer (PFE), Waste Management (WM) and American Electric Power (AEP), have sustainable dividends and reasonable price/earnings ratios.

Click to enlarge

 

Get FREE Stock

Get FREE Stock - No Trade Commissions

Subscribe for FREE Trades

Subscribe for FREE Trades

* indicates required
/ ( mm / dd )
Archives
PopAds