Tekla: High Yield in Biotech
12/08/2014 7:00 am EST
Our strategy is to invest in areas that can’t help but burgeon over time; one such market is healthcare, which is booming, notes Mark Skousen, editor of Forecasts and Strategies.
One of my favorite closed-end biotech funds is Tekla Healthcare Investors (HQH), a Boston-based closed-end healthcare fund that primarily invests in biotechnology, medical devices, and pharmaceuticals.
It will also emphasize the smaller, emerging companies with a maximum of 40% of the fund’s assets in restricted securities of both public and private companies.
We recommended Tekla Heathcare several years ago when it was called H&Q Healthcare Investors and now we’re recommending it again. It has a great track record, having more than tripled since 2008.
Even so, it looks like a good deal. Tekla Healthcare is selling at only nine times earnings and it sports a rising dividend policy of more than 7% a year.
On October 1, it paid its most recent quarterly distribution of 56 cents per share, its seventh increase in a row.
The distribution consists of long-term and short-term capital gains. Currently, it is selling at a 2% premium to its net asset value of $31.25.
I suggest you add Tekla Healthcare Investors to your portfolio today and benefit from the biotech revolution and an above-average dividend and distribution.
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