Selling below tangible book value means that the stock is below shareholders’ equity after deducting intangible assets. Typically these assets are things like the value of patents and written up technology assets. It also includes things like goodwill (overpayments of fair value from prior acquisitions), as well as deferred expenses or charges. This means that the value left is only tangible assets like real estate, cash, securities, loans, etc. Values can be put on these kinds of assets more easily than intangibles. In addition, all liabilities are deducted to determine the net tangible book value.
Therefore, if the high-yield dividend stocks are selling well below these levels, you know you are getting a bargain. This is the original theory that Benjamin Graham taught in his books and popularized with The Intelligent Investor. That is the book that Warren Buffett used to start his career as an investor. The five high-yield dividend stocks selling below their TBVPS are: Prudential Financial Group (NYSE:PRU), CIT Group (NYSE:CIT), Hancock Whitney Corp. (NASDAQ:HWC), DCP Midstream (NYSE:DCP) and Associated Banc-Corp (NYSE:ASB).
Source: InvestorPlace
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All dividends are not created equal, however. Investors should seek out companies with one of two advantage – or preferably both: a commitment to maintaining the dividend, and a high yield. The second is not hard to find, considering the Federal Reserve’s policy of keeping interest rates near zero, while the first attribute may take some research. We’ve picked three to focus on...
The first stock on the list is New Mountain Finance (NMFC), in the business development niche. New Mountain invests in debt securities, including first and second lien notes and mezzanine securities. The Company's portfolio includes public and private equity and credit funds with a total worth well north of $28 billion. Next on our list, Plains GP (PAGP), is a holding company in the oil and gas midstream sector. Plains’ assets move oil and gas products from the well heads to the storage facilities, refineries, and transport hubs. The company’s operations move more than 6 million barrels of oil equivalent daily. The last company on our list recently underwent a name change; in June, it dropped its old name TPG in favor of Sixth Street (TSLX). Sixth Street continues the core business of providing credit and capital for mid-market companies, helping to fund America’s small and medium enterprise niche.
Source: Yahoo Finance
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Income investors are often faced with the challenge of whether to try and trade in and out of stocks in order to reap capital gains vs. holding higher yielding stocks for income. Of course, in a topsy turvy year like 2020, that conundrum is even more challenging. Some income investors use ETFs, mutual funds or closed-end funds to get a piece of the tech action.
BlackRock Science and Technology Trust (BST) is a CEF which offers you a way to solve the income problem, and still benefit from tech. It currently yields 4.61%, pays monthly, and uses a covered call strategy to enhance its yield, with 31.36% of its assets overwritten by calls, as of 8/31/20. It has a gross expense ratio of 1.08%, with 1010 holdings.
Source: Seeking Alpha
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The opportunities to invest in floating-rate securities are many. For those seeking fortress-type security, floating-rate investment-grade bonds that are bought individually are the best bet as ETFs loaded with these floating-rate bonds were hit hard in March as money flew out of everything. These ETFs tend to be heavily weighted in financials — hence the related volatility. When market corrections come, bank stocks and related holdings get shwacked hard and thus are not safe from big market downdrafts.
Issuers in economically defensive businesses make more sense. Here is a smattering of current issues traded:
1.38% Verizon Communications Inc. Notes due 5/15/2025 BBB+
1.43% AT&T Inc. Notes due 6/12/2024 BBB
0.64% Florida Power & Light Co. due 7/28/2023 A
1.26% Vodaphone Group Plc due 1/16/2024 BBB
1.25% General Electric Co. due 3/15/2023 BBB+
1.00% Qualcomm Inc. due 1/30/2023 A-
0.91% Comcast Corp. due 4/15/2024 A-
0.75% United Parcel Service due 4/1/2023 A-
0.74% Apple Inc. due 2/9/2022 AA+
0.60% Intel Corp. due 5/11/2022 A+
0.90% Abbvie Inc. due 11/21/2022 BBB
Source: Dividend Investor
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If you're worried about the election, you're not alone. According to one poll, nearly half of Americans said they aren't confident that the election will be carried out fairly. Uncertainty around the election has already been elevated by the pandemic and President Trump's casting doubt on mail-in ballots. With the news that the president has tested positive for the virus, that election-related uncertainty has now reached a fever pitch, potentially forcing a number of unprecedented situations on the country.
Investors should brace themselves for volatility around the election, as results may not come in immediately and President Trump's health will cloud the situation in the meantime. Though the stock market should brush off any noise around the election over the long term, the coming months could be stormy as investors face not just election uncertainty, but the risk of rising Covid infections as the weather turns colder and a slowing economic recovery that could lead to a W-shaped recession. Keep reading to see why Walmart (NYSE:WMT), Altria (NYSE:MO), and AT&T (NYSE:T) have what it takes to handle any election uncertainty, and have the strength to keep paying you dividends while they do it.
Source: Motley Fool
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