Author: John Seetoo
Source
24/7 Insights
- High-yield dividend stocks can help supplement your income or you can re-invest the payments to increase your shares.
- Diversification into numerous industries will better protect your nest egg.
- Access 2 legendary, high-yield dividend stocks Wall Street loves
Contrary to news media reports about inflation being cut, the reality of the situation is that inflation has once again surged, and has increased, according to Fed Chair Jerome Powell, to 3.0%.
24/7 Wall Street has published numerous articles about dividend stocks, which can be an excellent source of passive income for those with liquid assets for investment. Based on their prices at the time of this writing, investing $20,000 in each of the following stocks can generate a monthly passive dividend income of $1,500. For those who are holding their own with inflation and higher food and grocery bills, that can be a helpful cushion in the event of an interest rate hike. For others who are struggling, $1,500 may mean the difference between having to choose between feeding the family or undergoing a necessary medical procedure, and being able to accomplish both, instead.
Abrdn Global Premier Properties Fund
Stock #1 : Abrdn Global Premier Properties Fund (NYSE: AWP)
Yield: 13.01%
Number of shares for $20,000: 5,363
Monthly Dividend Income:~ $216.83
Headquartered in Aberdeen, Scotland, UK, the Abrdn Global Premier Properties Fund is a closed-end mutual fund that invests in global stocks engaged in the real estate industry. The Abrdn Global Premier Properties Fund benchmarks the performance of its portfolio against the FTSE EPRA/NAREIT Global TR Index, MSCI US REIT Gross Total Return Index, and S&P Developed BMI Property Index Net TR Index.
With $408.6 million AUM as of April, 2024, the fund is roughly 61% US stocks and 38% foreign stocks, with the remainder in cash.
The top three largest percentage positions being held in the portfolio are: Prologis Inc. (NYSE: PLD) – 8.41%; Equinix Inc. (NASDAQ: EQIX) – 5.27%; and Welltower Inc. (NYDE: WELL) – 4.70%.
Virtus Diversified Income & Convertible Fund
Stock #2 : Virtus Diversified Income & Convertible Fund (NYSE:ACV)
Yield: 12.33%
Number of shares for $20,000: 898
Monthly Dividend Income: ~$205.50
Located in the same NY Paramount Plaza office building as Atlantic Records, the Virtus Diversified Income & Convertible Fund is a closed-end mutual fund that invests in a mix of convertible stocks, dividend stocks, and high-yielding bonds from the capital markets. It is co-managed by Allianz Global Investors US LLC and Allianz Global Investors Fund Management LLC.
Investment in convertible securities gives the option to the shareholder to switch from a fixed income coupon payment security to convert to a preset number of common shares. This can help enhance returns if the capital appreciation upside potential appears stronger than the income component, especially if the issuing company announces news that causes a buying surge in the common stock.
While the fund is invested in most of the major industrial sectors to some degree, the three largest exposures in the $322.4 million AUM portfolio as of April 2024 are: Technology (27.9%); Consumer Cyclical (18.2%); and Financial Services (14.6%).
The three largest individual holdings, percentage wise, are: Microsoft Corp. (NASDAQ: MSFT) – 2.9%; Amazon.com Inc. (NASDAQ: AMZN) – 2.35%; and Nvidia Corp. (NASDAQ: NVDA) – 1.41%.
BlackRock Floating Rate Income Trust
Stock #3 : BlackRock Floating Rate Income Trust (NYSE: BGT)
Yield: 11.25%
Number of shares for $20,000: 1,551
Monthly Dividend Income: ~$187.50
New York’s leviathan-esque sized BlackRock is the largest asset manager in the world, with over $10 trillion AUM. The BlackRock Floating Rate Income Trust is a closed end global fixed-income mutual fund that invests primarily in high-yield “junk” rated corporate bonds.
The portfolio turns over quickly. Few securities remain in the portfolio for more than 18 months.
The three largest positions in the $287.6 million portfolio as of April, 2024 are; Alliance Holdings Intermediate LLC, 8.86% cpn, 11/30 (1.46% of portfolio); Inmarsat PLC 8.86% cpn, 12/26 (1.38% of portfolio), and RealPage Inc. 8.47% cpn, 4/28 (1.31% of portfolio).
Eaton Vance Senior Floating-Rate Trust
Stock #4 : Eaton Vance Senior Floating-Rate Trust (NYSE: EFR)
Yield: 11.08%
Number of shares for $20,000: 1,527
Monthly Dividend Income: ~$184.67
For the past 21 years, the Boston, MA based Eaton Vance Senior Floating-Rate Trust has been investing in senior secured floating rate loans and high-yield corporate bonds to generate income for its shareholders. A closed-end fixed-income mutual fund, it benchmarks its portfolio against the S&P/LSTA Leveraged Loan Index.
From a ratings perspective, the fund’s $565 million AUM portfolio, as of April 2024, is 59.39% rated B, 24.3% rated BB, 6.75% rated BBB, and the remaining 9.5% below B or unrated. The
Average maturity of the bonds are roughly 4.5 years.
The three largest portfolio positions by percentage are issued from Avolon TLB Borrower 1 US LLC (0.94%), Focus Financial Partners LLC (0.87%), AAdvantage Loyalty IP (0.78%).
Guggenheim Active Allocation Fund
Stock #5 : Guggenheim Active Allocation Fund (NYSE: GUG)
Yield: 11.01%
Number of shares for $20,000: 1,363
Monthly Dividend Income:~$183.50
While some mutual funds take a conservative approach towards managing a portfolio by simply buying and selling securities, there are others that are much more aggressive. Guggenheim Active Allocation Fund is one such fund, with emphasis on “active”.
Guggenheim Active Allocation Fund is a closed-end balanced mutual fund that invests in global stocks as well as fixed-income securities. With $676 million AUM, the management on the equity side will invest in common stock, shares in Limited Liability Companies, trust certificates, and other securities that can be categorized as “equities”. Additionally, the fund’s manager will utilize covered option writing and put options to short stocks when opportunities present themselves, all with the goal of maximizing returns,
On the fixed-income side, the fund has a cap of 25% maximum of portfolio allocation into securities rated CCC or below. Otherwise, government bonds, corporate bonds, loans, loan participations, mortgage bonds, asset-backed securities, collateralized debt obligations, mezzanine loans and convertible bonds are all fair game for inclusion.
Additionally, non-US dollar denominated securities will be considered, so foreign exchanges are also monitored for opportunities.
An extra plus for investors who choose to participate is the fund’s DRIP (Dividend Re-Investment Plan). The DRIP price is calculated by either of the following steps: First, if the Common Shares are trading at a discount, the DRIP price is the weighted average cost to purchase the Common Shares from the NYSE or elsewhere. Secondly, if the Common Shares are trading at a premium, the DRIP price is determined either by the NAV or approximately 95% of the Common Share price, whichever is higher.
Cohen & Steers Closed-End Opportunity Fund, Inc.
Stock #6 : Cohen & Steers Closed-End Opportunity Fund, Inc. (NYSE: FOF)
Yield: 10.55%
Number of shares for $20,000: 1,739
Monthly Dividend Income:~$175.83
Balanced funds offer both capital appreciation potential as well as the safety and income aspects of bonds. The Cohen & Steers Closed End Opportunity Fund, Inc. fits in that category, although it’s historically been stronger on the income side. Based in New York, the fund uses the S&P 500 Index and the Morningstar U.S. All Taxable Ex-Foreign Equity Index for its portfolio performance benchmarks.
Rather than restricting the portfolio to direct stocks and bonds, Cohen & Steers have built its fund’s $308 million AUM by investing in different funds, or conglomerate stocks, such as Berkshire Hathaway (NYSE: BRK.B) which is the largest single position in the portfolio.
True to its design, the fund’s portfolio reflects a breakdown of 47,88% US stocks, 6,27% foreign stocks, and 39.80% fixed income as of April, 2024. Sector wise, Energy (16.92%), Technology (16.72%), and Financial Services (14.97%) are the three largest exposures.
Angel Oak Financial Strategies Income Term Trust
Stock #7 : Angel Oak Financial Strategies Income Term Trust (NYSE: FINS)
Yield: 10.51%
Number of shares for $20,000: 1,603
Monthly Dividend Income:~$175.17
Buying shares of mutual funds that specialize in particular sectors are an excellent way to get the benefits of diversification in prorated stakes in multiple companies while keeping the admission price within budget. Atlanta, GA headquartered Angel Oak Financial Strategies Income Term Trust is a closed-end mutual fund that was created to focus on equities and fixed-income securities issued by financial sector companies. These could be banks, insurance companies, credit unions, and other financial sector businesses.
Portfolio management policies mandates that at least 50% of the holdings have to be investment grade, i.e. BBB- or better. As of April, 2024, 69.1% of Angel Oak’s $486 million AUM was invested in bank debt, 24.8% in non-bank financials, 4.5% in preferred stocks, and 0.4% in common stocks.
Flaherty & Crumrine Dynamic Preferred and Income Fund Inc.
Stock #8 : Flaherty & Crumrine Dynamic Preferred and Income Fund Inc. (NYSE: DFP)
Yield: 10.41%
Number of shares for $20,000: 1,089
Monthly Dividend Income:~$173.50
Operating as a balanced fund with a focus on preferred stocks, Pasadena, CA based Flaherty & Crumrine Dynamic Preferred and Income Fund Inc. invests in global securities from a diverse range of industrial sectors.
With $704.9 million AUM, Flaherty & Crumrine mitigates risk by keeping 47.3% of the portfolio holdings at BBB rated securities and 34.10% at BB. Within the top 10 largest positions, issuers of bonds or stocks include insurance companies like Liberty Mutual and MetLife, as well as banks like Lloyd’s, BNP Paribas, HSBC, and Societe Generale.
Prudent stock portfolio management requires regular monitoring. If dividend stocks are involved, and if the passive income they generate are to be relied upon for important payments, the need for monitoring is even greater. Any breaking news or market events that may impact a stock’s dividend may require a quick sale and replacement purchase with another stock. The high liquidity of the equities market is one advantage that investors have with stocks that other asset classes, like real estate, lack. Whatever decision one makes, at least being proactive in the wake of the current economic climate gives him or her a fighting chance.
| Name: | Yield: | Monthly Dividend Income: |
| abrdn Global Premier (NYSE: AWP) | 13.01% | $216.83 |
| Virtus Diversified Income & Convertible Fund (NYSE: ACV) | 12.33% | $205.50 |
| BlackRock Floating Rate Income Trust (NYSE: BGT) | 11.25% | $187.50 |
| Eaton Vance Senior Floating-Rate Trust (NYSE:EFR) | 11.08% | $184.67 |
| Guggenheim Active Allocation Fund (NYSE:GUG) | 11.01% | $183.50 |
| Cohen & Steers Closed-End Opportunity Fund, Inc. (NYSE:FOF) | 10.55% | $175.83 |
| Angel Oak Financial Strategies Income Term Trust (NYSE:FINS) | 10.51% | $175.17 |
| Flaherty & Crumrine Dynamic Preferred and Income Fund Inc. (NYSE:DFP) | 10.41% | $173.50 |
| Total: | $1,502.50 |
Smart Investors Are Quietly Loading Up on These “Dividend Legends”
If you want your portfolio to pay you cash like clockwork, it’s time to stop blindly following conventional wisdom like relying on Dividend Aristocrats. There’s a better option, and we want to show you. We’re offering a brand-new report on 2 stocks we believe offer the rare combination of a high dividend yield and significant stock appreciation upside. If you’re tired of feeling one step behind in this market, this free report is a must-read for you.
Click here to download your FREE copy of “2 Dividend Legends to Hold Forever” and start improving your portfolio today.
The post Want $1500 Per Month In Passive Income? Invest $20,000 In These Stocks. appeared first on 24/7 Wall St..