I'm Locking 8% Yields From Monthly Dividends

seekingalpha06-10

The U.S. population of millionaires grew by 600K last year to 7.5 million, driven by the AI-fueled stock market rally.But most of those gains are likely from capital gains, and it's important to take ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nI'm Locking 8% Yields From Monthly Dividends\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-10 20:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4698300-im-locking-8-percent-yields-from-monthly-dividends><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The U.S. population of millionaires grew by 600K last year to 7.5 million, driven by the AI-fueled stock market rally.But most of those gains are likely from capital gains, and it's important to take ...</p>\n\n<a href=\"https://seekingalpha.com/article/4698300-im-locking-8-percent-yields-from-monthly-dividends\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0053666078.USD","symbol_name":"摩根大通基金-美国股票A（离岸）美元","start_time":0,"source_url":"https://seekingalpha.com/article/4698300-im-locking-8-percent-yields-from-monthly-dividends","article_id":"2442884251","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/476981829/image_476981829.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2442884251","pubTimestamp":1718021100,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"#1: Main Street Capital Main Street Capital  is one of the most recognizable names in BDC industry, with it being both internally managed and a having a durable dividend track record during both good times and bad. This includes never having decreased its monthly distribution since IPO in Q4 2007, just before the Great Financial Crisis. As the largest internally managed BDC, MAIN boasts cost efficiencies due to its scale. This includes having an industry leading operating expense-to-assets ratio of just 1.3%. It's worth noting that a significant portion (30%) of total operating expenses are non-charges that are mostly related to equity grants to management, which results in high alignment of interest with shareholders. Speaking of which, MAIN's management owns a significant 3.5 million shares collectively, representing 4% of total outstanding shares. When excluding the non-cash expenses, the OpEx-to-Assets ratio drops to just 0.9%. As shown below, this compares favorably to the BDC and","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","TMUS":"T-Mobile US Inc","SDS":"两倍做空标普500ETF","IE00BD4GTT62.SGD":"Legg Mason ClearBridge Infrastructure Value A SGD-H (mdis) plus","NEE":"新纪元能源","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","AMT":"美国电塔","SH":"标普500反向ETF","OEX":"标普100","SSO":"两倍做多标普500ETF","UTF":"Cohen & Steers Infrastructure","SO":"美国南方公司","ENB":"安桥","T":"美国电话电报","VZ":"威瑞森","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","IE00BMG7P926.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Acc USD","NVDA":"英伟达","IVV":"标普500指数ETF","BK4581":"高盛持仓","OEF":"标普100指数ETF-iShares","BK4504":"桥水持仓","SPXU":"三倍做空标普500ETF","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","BK4219":"电信塔房地产信托","IE00BMG7P694.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis USD Plus","DELL":"戴尔","MAIN":"Main Street Capital","META":"Meta Platforms","SPY":"标普500ETF","LU1585245621.USD":"EASTSPRING INV GLOBAL LOW VOLATILITY EQUITY FUND \"A\" (USD) ACC B","IE00B7KXQ091.USD":"Janus Henderson Balanced A Inc USD","TRP":"TC Energy",".SPX":"S&P 500 Index","UPRO":"三倍做多标普500ETF"},"translate_title":"我锁定每月股息8%的收益率","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMT":1,"VZ":1,"UTF":1,"TRP":1,"TMUS":1,"T":1,"SPY":1,"SO":1,"NVDA":1,"NEE":1,"META":1,"MAIN":1,"DELL":1,"ENB":1,"US10Y.BOND":0.8,"US12M.BOND":0.8,"US2Y.BOND":0.8,"US30Y.BOND":0.8,"US3Y.BOND":0.8,"US7Y.BOND":0.8,"US6M.BOND":0.8,"US5Y.BOND":0.8,"UPRO":0.6,"US912797FS14.BOND":0.6,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6,".SPX":0.6,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"ESmain":0.6,"SPXU":0.6,"SSO":0.6,"IVV":0.6},"content_text":"The U.S. population of millionaires grew by 600K last year to 7.5 million, driven by the AI-fueled stock market rally.But most of those gains are likely from capital gains, and it's important to take a balanced approach to investing, combining growth stocks with income-generating assets.Main Street Capital and Cohen & Steers Infrastructure Fund are two picks that pay dividends on a monthly basis, providing income during market volatility.Supertruper A recent article highlighted that the U.S. population of millionaires grew by 600K last year to 7.5 million, driven in large part by the AI-fueled stock market rally by the likes of NVIDIA (NVDA), Meta Platforms (META), and even Dell Technologies (DELL). While it's great to see paper gains, one would have to sell down the S&P 500 (SPY) index and/or those holdings that have seen material gains to realize any tangible benefits from them. That's why it may be a good idea to take a balanced approach towards investing, by letting the winners ride while also building an income stream with which one can utilize for everyday expenses. Contrary to what some may believe, income generating assets don't have to go counter to growth stocks, and can rather be complementary to them. That's because having income on the side helps to ensure that one doesn't have to sell down winners during market volatility or individual financial events such as a job loss or retirement. This brings me to the following 2 picks, both of which pay dividends on a monthly basis, helping the investor to ride out market volatility with income on the side. One invests in defensive businesses while the other invests in mission-critical infrastructure, so let's get started! #1: Main Street Capital Main Street Capital (MAIN) is one of the most recognizable names in BDC industry, with it being both internally managed and a having a durable dividend track record during both good times and bad. This includes never having decreased its monthly distribution since IPO in Q4 2007, just before the Great Financial Crisis. As the largest internally managed BDC, MAIN boasts cost efficiencies due to its scale. This includes having an industry leading operating expense-to-assets ratio of just 1.3%. It's worth noting that a significant portion (30%) of total operating expenses are non-charges that are mostly related to equity grants to management, which results in high alignment of interest with shareholders. Speaking of which, MAIN's management owns a significant 3.5 million shares collectively, representing 4% of total outstanding shares. When excluding the non-cash expenses, the OpEx-to-Assets ratio drops to just 0.9%. As shown below, this compares favorably to the BDC and Commercial Banks' average, whose expense ratios run between 2.4% and 3%, as shown below. Investor Presentation At present, MAIN has a portfolio fair value of $4.4 billion spread across mostly defensive industries with some growth industries thrown in. MAIN's Top 5 portfolio industries in its core LMM (lower middle market) portfolio is comprised of Machinery, IT Services, Tobacco, Construction & Engineering, and Containers & Packaging, which comprise 38% of the LMM portfolio on a combined basis. MAIN is also demonstrating strong portfolio growth that's accretive to the bottom line, with total investment income growing by 9% YoY to $132 million during Q1 2024, and DNII (distributable net investment income) growing by 4% YoY. Importantly, MAIN's NAV per share has continued to grow, rising by 8.7% YoY to $29.55 at the end of the first quarter. This was driven by a combination of retained earnings after paying the regular and special dividends as well as the accretive impact of stock offerings, the latter of which raised MAIN's NAV/share by $0.05 in Q1 alone. As shown below, MAIN has seen strong upward momentum in its NAV per share over the past 5 years, from $24 in 2029 to $29.55, representing a 23% increase over this timeframe. MAIN NAV/Share 5-Yr Trend (Seeking Alpha) Importantly, MAIN sports a well-covered 6% regular dividend yield with a distribution coverage ratio of 151%. This enabled MAIN to pay or declare two $0.30 special dividends so far this year. It's worth noting that MAIN paid 4 special dividends last year, and carries a trailing 12-month yield of 8.3%. Presuming that MAIN continues to issue $0.30 special dividends this year, which are higher than the $0.275 specials last year, MAIN's forward dividend yield could be as high as 8.5%. Admittedly, MAIN isn't cheap at the current price of $48.75 with a Price-to-NAV ratio of 1.65x. However, I believe well-run internally managed BDCs should be valued based on PE, and from this perspective MAIN doesn't appear to be excessively expensive with a forward PE of 12.0x. This is considering MAIN's significant insider ownership, low operating expenses, track record of NAV/share and dividend raises, and its ability to issue accretive equity at current prices to grow the portfolio. #2: UTF The Cohen & Steers Infrastructure Fund (UTF) is a closed end fund that invests in a portfolio of mission-critical assets that include energy, utilities, infrastructure REITs, and industrials. Contrary to MAIN, which essentially holds business loans, UTF's assets are long duration in nature with useful lives of a decade or longer. UTF's top 10 holdings is a good mix of durable REITs such as global cell tower landlord American Tower (AMT), leading utilities like Southern Company (SO) and NextEra Energy (NEE), and strong energy midstream companies like TC Energy (TRP) and Enbridge (ENB). As shown below, its assets are well-diversified, with no single holding representing over 4.1% of total assets. UTF Top Holdings (Seeking Alpha) Thanks to UTF's generous dividend, with a current yield of 8%, UTF has been able to produce solid results for shareholders. The higher dividend rate than most of its underlying holdings is due to UTF's modest use of leverage, which stands at 30.6%. As shown below, UTF's total return actually tracked closely with that of the S&P 500 over most of the past 10 years, before the AI-led rally in SPY broadened the gap with UTF over the past 12 months. UTF vs SPY Total Return (Seeking Alpha) Of course, most investors of UTF are interested in the dividend over capital gains, and UTF's holdings are well-known for having good track records of dividend growth. For example, AMT carries a 3.4% dividend yield and has a 5-year dividend CAGR of 14.6%, although I would expect for dividend growth to slow in the near term due to the impact of higher interest rates and a pullback in 5G spending by leader wireless companies such as AT&T (T), Verizon (VZ), and T-Mobile (TMUS). AMT continues to see both top and bottom-line growth in the current environment, with property revenue and adjusted EBITDA growing by 2.4% and 5.2% YoY, respectively, during Q1 2024. At the same time, NextEra Energy, a Top 3 holding for UTF, has rebounded price since falling last year, and is brining new renewables and storage projects online for customers, extending its scale advantages. While I don't believe UTF should be a substitute for growth stocks in one's portfolio, it can serve as a solid complementary holding. With the S&P 500 currently yielding just 1.26% and a 10-Year CAGR of 6.8%, it can be 33 years (through applying the Rule of 72) to get to the same 8% yield as what UTF is generating now. As such, UTF can serve as an income supplement to pay for everyday living expenses, while one enjoys capital gains from index funds and growth stocks. Investor Takeaway Main Street Capital and Cohen & Steers Infrastructure Fund present a balanced approach to investing, combining the potential for growth with steady income. MAIN, a leading BDC, excels with its internally managed structure and defensive, growth-oriented portfolio, providing a robust 6% regular dividend yield and additional special dividends which combine to yield over 8%.  UTF, a closed-end fund, focuses on essential infrastructure assets with long-term value, offering an 8% yield supported by diversified holdings in durable REITs, utilities, and energy companies. Together, these investments allow investors to ride out market volatility with consistent monthly income while participating in growth opportunities in a well-balanced portfolio.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":1,"repostSize":1,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2442884251"}