Summertime is traditionally weak, but many analysts are looking for a strong year-end, starting in October or so. So, play it cautious for now, notes Harry Domash, income specialist and editor of Dividend Detective.
This month, we’re adding three new ideas to our model portfolio of preferred stocks:
Atlanticus Holdings (ATLC) offers auto financing and a range of consumer loan products to customers in the U.S. The Atlanticus Holdings 7.625% B Cumulative Preferreds (ATLCP) are not credit rated and recently traded at $24.90 per share.
The market yield on the preferred is 7.7% and the yield to its 8/1/21 call date is also 7.7%. Dividends are eligible for the 15%/20% tax rates and are eligible for corporate holders’ dividends received deduction.
Healthcare Trust of American (HTA), a REIT, holds a portfolio of medical office buildings, mostly on campuses of hospitals and universities located in the U.S.
Healthcare Trust 7.375% A Cumulative Preferreds (HTIA) are not credit rated. The market yield is 7.4% and the yield to its 12/11/24 call date is also 7.4%.
The United States Cellular 5.50% Senior Notes (UZF) are credit rated BB (below investment grade). The market yield is 5.3% and the yield to its 6/1/26 call date is 4.6%.
We’re also adding to new ideas to our ETF Monthly Income portfolio:
Hoya Capital Housing (HOMZ) holds 100 U.S. companies operating in the housing industry including residential REITs, home builders, home improvement companies, and real estate services firms. Hoya, a May 2019 IPO, has returned 28% year-to-date and 53% over the past 12-months. It’s paying a 2.6% dividend yield.
Virtus InfraCap US Preferred Stock (PFFA), an actively managed exchange-traded fund, holds a portfolio of around 175 U.S. based preferred stocks. Virtus has returned 46% over the past 12-months and averaged 9% annually over three years. It’s paying a 7.4% dividend yield.
In addition, we are adding a new recommendation to our Monthly Paying Closed-End Fund portfolio — Tekla Healthcare Opportunities (THQ), which is well suited for current market conditions.
Tekla holds a mix of pharmaceuticals, healthcare providers, medical device makers and other healthcare-related firms. THQ is paying a 5.6% dividend yield. The fund has returned 42% over the past 12-months and averaged 19% annual returns over the past three years.