Harry Domash is an industry-leading expert on income-generation. Here, the editor of Dividend Detective reviews four diverse groups of new additions to his various model portfolios.
We’re adding a new pick to our speculative portfolio of preferred; its paying 8.7% and has 13% capital gains (upside) potential. We’re adding Pennsylvania Real Estate Investment Trust 7.20% Series C (PEI-C) to the portfolio.
Pennsylvania REIT (PEI) owns and operates shopping malls. Obviously, that’s a troubled business, but PEI is in the late stages of reconfiguring and redeveloping its properties to reflect current consumer trends.
These preferreds are cumulative, meaning that PEI remains on the hook for any missed dividends. PIE is cash flow positive and is still paying it $0.21 per share, common stock quarterly dividend. Market yield is 8.7% and upside potential is 20.5%.
In our Growth Opportunities portfolio, we have a new pick — Vornado Realty Trust 5.25% Series M (VNOM) — paying 6.7% that returned 25% over the past 12-months and averaged 15% annually over the past five years. How many tech stocks can you name that could match that record?
Vornado (VNO) owns office buildings, retail properties, etc, primarily in the Northeast. These preferreds — rated investment quality (BBB-) — are cumulative, meaning that Vornado must make up any missed dividends. Market yield is 6.0% and upside potential is 15%.
Eaton Vance Enhanced Equity Income Fund II (EOS) holds mainly U.S.-based large and giant-cap stocks, overweighting technology and consumer cyclicals.
The fund returned 25% over the past 12-months, and averaged 15% annually over the past five years. It employs a call options strategy to generate income and pays monthly dividends equating to a 6.7% yield.
In our closed-end fund monthly income portfolio, we are buying BlackRock Science & Technology (BST), which as its name implies, holds technology stocks, a category that, despite recent market action, we expect to outperform for some time.
Blackrock Science and Technology, which started trading in October 2014, pays a 5.1% dividend. It has returned 51% over the last 12 months, and has averaged 28% annually over the past three years.
