Buying 9%, 11%, And 15% Secure Dividends At Bargain Prices

It is an exciting time to be an income-focused investor. Business results are improving, yet share prices have not recovered from the February-March crash. The lack of share price recovery allows us to pick up shares of solid income stocks at excellent yields. Who wouldn’t like earning 9%, 11%, or even 15% from an investment where the dividend looks secure, and there is tremendous potential for share price appreciation?

I keep watch on several hundred dividend-paying investments. There are hundreds more that I may or may not have perused. My Dividend Hunter subscribers are a good source of new income investment ideas. Each month I ask the subscribers to my Dividend Hunter Insiders service to submit a stock that they’re interested in for me to perform an in-depth dive review. These will be stocks or other investments that are not in the Dividend Hunter recommendations list.

My Insiders send me up to 70 stock ideas each month for a deep dive review. I select one, apply my analysis techniques, and send to all of them – whether they submitted a stock or not – a report on the chosen investment. Each month, the crowdsourced list includes some intriguing investment ideas of which I was not aware like the biotech closed-end fund that long-time subscriber Scott suggested.

As the economy continues to steadily climb out of the coronavirus pandemic economic crash hole, I am excited for the high-yield investment choices going into the new year. For the next Dividend Hunter newsletter issue, I will show the mathematic logic for 100%-plus share price returns, plus high dividend yield’s over the next couple of years.

For fun, here are five of the submitted investments that I find interesting. These are not current recommendations, but they may warrant a more in-depth look.

I’m lumping together the first two investments: GAMCO Global Gold, Natural Resources & Income Trust (GGNand the Credit Suisse Gold Shares Covered Call ETN (GLDI).

The two funds take different strategies to provide high-yield exposure to gold and natural resources.

These days I am somewhat of a gold bug. The massive dumping of stimulus cash into the global economy could lead to currency devaluation, which is very good for the price of gold.

GGN has a current yield of 10.3%, and GLDI yields 12.7%.

I thought I was not familiar with Lumen Technologies (LUMN) and its 10% dividend yield; however, with some digging, I discovered that Lumen is actually a rebrand of CenturyLink.

The recent history of CenturyLink has been extremely troubled.

The dividend was cut by 54% in March 2019, well before we had heard about the coronavirus.

I suggest not being taken in by the new fancy name.

I often refer to the closed-end fund universe as a junkyard. As with any junkyard, you can sometimes find something valuable if you shift through the junk.

The John Hancock Tax-Advantaged Dividend Income Fund (HTDmay be such a nugget.

The fund invests in utility common shares and preferred stock shares.

I suggest further research to determine the level of the tax advantage that applies to your particular situation.

The Invesco Dynamic Energy Exploration & Production ETF (PXE) offers a very contrarian play for future energy production.

The fund owns a portfolio of oil drillers and refiners. Both ends of the carbon-based energy spectrum are significantly out of favor.

PXE currently yields 6.5%.

As I noted, these investments were sent by my very smart Dividend Hunter Insiders subscribers, they’re a special group of Dividend Hunter readers.

Disclaimer: The information contained in this article is neither an offer nor a recommendation to buy or sell any security, options on equities, or cryptocurrency. Investors Alley Corp. and its ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Marble 3 years ago Member's comment

Take a closer look at $LUMN... incredible value. Dividend is well covered with a payout ration is in the 30s. Debt is being paid down at a rate of about 1.5-2B/year. Debt is also being refinanced at much better interest rates. Here's a great read: seekingalpha.com/.../4382616-lumen-can-pay-down-debt-easily-to-trade-comps

Adam Reynolds 3 years ago Member's comment

Thanks, but it looks like I have to be a paid subscriber to read the article you linked to.