Alpine Dynamic Dividend Fund ADVDX

[Tony Tampa]

Does anyone use this fund for income? Any thoughts on it or an alternative for juicing
monthly income?

 

[brewer12345]

Strikes me as very trendy, which is usually an indication of an overpriced "flavor of the month" that will ultimately prove not to be such a great idea.

If you want to boost portfolio income include some bonds and some individual securities. There are plenty of things paying out 8 to 10% (and more).

 

[Dawg52]

If you want to boost portfolio income include some bonds and some individual securities.  There are plenty of things paying out 8 to 10% (and more).

How about a few examples excluding GM bonds? 

 

[mikew]

It seems this fund churns looking for dividends. I would be carefull about trading fees and capital gains taxes.

Mike

 

[brewer12345]

How about a few examples excluding GM bonds? 

Bear in mind that anything paying out this much includes some measure of risk and that you should do your DD. Now then:

- STON: Cemetary company, MLP, 9 to 10% yield. Currently discounted because they are having what appear to be minor accunting issues. TAxable accounts only due to MLP structure.
- CHC: The largest provider of multi-family affordable housing capital. MLP, so tacxable accounts only. 8.8% yield that is mostly tax free if you are not subject to AMT.
- ANH and MFA preferred stocks: yielding 9% or so. Mortgage REITs are in the dumps until the yield curve steepens again, but I cannot imagine a scenario under which these preferreds could get into trouble unless the yield curve stays inverted for years.
- EGLE: Bulk shipping company. 16% yield. Currently out of favor like all shipping companies. Concentrates on Handymax and Supramax ships with relatively long (1 to 3 year) fixed rate charters. Supramax rates have been moving up from their late Jan. lows, but it hasn't been reflected in the stock price yet.

Like I said, none of the above are without risk, but they are paying out a lot of cash and I think they will do just fine over the next few years. I own EGLE and STON, and I have owned the preferreds.

 

[Tony Tampa]

Thanks very much for all your thoughts. Preferred stocks were another
consideration as most of them are also down in price due to the Fed hikes.

 

[Dawg52]

Bear in mind that anything paying out this much includes some measure of risk and that you should do your DD.  Now then:

- STON: Cemetary company, MLP, 9 to 10% yield.  Currently discounted because they are having what appear to be minor accunting issues.  TAxable accounts only due to MLP structure.
- CHC: The largest provider of multi-family affordable housing capital.  MLP, so tacxable accounts only.  8.8% yield that is mostly tax free if you are not subject to AMT.
- ANH and MFA preferred stocks: yielding 9% or so.  Mortgage REITs are in the dumps until the yield curve steepens again, but I cannot imagine a scenario under which these preferreds could get into trouble unless the yield curve stays inverted for years.
- EGLE: Bulk shipping company.  16% yield.  Currently out of favor like all shipping companies.  Concentrates on Handymax and Supramax ships with relatively long (1 to 3 year) fixed rate charters.  Supramax rates have been moving up from their late Jan. lows, but it hasn't been reflected in the stock price yet.

Like I said, none of the above are without risk, but they are paying out a lot of cash and I think they will do just fine over the next few years.  I own EGLE and STON, and I have owned the preferreds. 

Thanks. As I near retirement, I am trying to build some income from a portion of my investments. Although cd's are safe and comfy, I do plan to spice it up a bit by adding a little to higher yielding investments.  Overall I plan to move to a 50/50 balance. Not quite there  as I am more like 45/55 right now.

 

[d]

given the general market, the current yield suggest it's too good to be true (and this on top of a not-very-low ER) ... I'll join the others in suggestion caution and due diligence

 

[brewer12345]

If you really want to own a fund that pays out a lot of dividends, at least look for something cheaper. ADVDX has an expense ratio of 1.23%. Look at DVY, for example.

 

[wildcat]

Dog51 -

http://www.quantumonline.com/Index.cfm

Decent website that may be able to help you with some searches.

 

[justin]

FYI - I recently called Vanguard about their upcoming Dividend Appreciation Index fund. It should be available for purchase around April 20th. They didn't know what kind of yield it would produce though. Should be another low cost dividend play.

 

[wildcat]

My bet is 2.5-2.8% tops.

 

[justin]

Probably. Their Financials VIPER is paying about that. The Utilities VIPER is a little over 3% though. I'm sure it will be a conservative dividend-paying stock fund, hence a moderate yield.

It's tempting at times to snap up some 10-15 of these 4% dividend yielding stocks. Citi comes to mind. A reasonable P/E ratio and good div yield.

 

[Tony Tampa]

In an attempt to "juice" the yield I've also looked at closed end funds but don't
know much about where to begin. I've been to the ETF and Nuveen sites
and get the discount thing but fees seem high and many are leveraged.
Quantumoline is a very good resource but it gets down to actually making the call on
something. Preferred stocks might be my best alternative. Thanks again to all for your thoughts.

 

[brewer12345]

In an attempt to "juice" the yield I've also looked at closed end funds but don't
know much about where to begin. I've been to the ETF and Nuveen sites
and get the discount thing but fees seem high and many are leveraged.
Quantumoline is a very good resource but it gets down to actually making the call on
something. Preferred stocks might be my best alternative. Thanks again to all for your thoughts.

I think you can do very well with CEFs, but you need to be aware that the leverage will bring with it more risk/volatility. Fees are usually high, but you can make up for it by picking a fund with an expense ratio that isn't too nuts and making sure you buy at a significant discount to NAV. If you keep an eye out, CEFs go to fat discounts to NAV on a regular basis. I watched HPF go to a 15% or so discount late last year as the capital markets were getting topsy turvy. It is now at 6% and change, plus the fund spat out a lot of income in the meantime.

So if you want to buy CEFs, pick a few and then wait for your chance. I like HPF (mostly preferreds), as mentioned above (it is leveraged). I also like PDT (mix of preferreds and equity, leveraged) in part because it is about 40% owned by an insurance company and when it falls to a fat discount to NAV the usually step in and buy a ton. If it stayed too far for too long, they would buy up enough to break up the fund and distribute the assets (i.e. force it to go to NAV).

 

[Texas Proud]

Bear in mind that anything paying out this much includes some measure of risk and that you should do your DD.  Now then:

- STON: Cemetary company, MLP, 9 to 10% yield.  Currently discounted because they are having what appear to be minor accunting issues.  TAxable accounts only due to MLP structure.
- CHC: The largest provider of multi-family affordable housing capital.  MLP, so tacxable accounts only.  8.8% yield that is mostly tax free if you are not subject to AMT.
- ANH and MFA preferred stocks: yielding 9% or so.  Mortgage REITs are in the dumps until the yield curve steepens again, but I cannot imagine a scenario under which these preferreds could get into trouble unless the yield curve stays inverted for years.
- EGLE: Bulk shipping company.  16% yield.  Currently out of favor like all shipping companies.  Concentrates on Handymax and Supramax ships with relatively long (1 to 3 year) fixed rate charters.  Supramax rates have been moving up from their late Jan. lows, but it hasn't been reflected in the stock price yet.

Like I said, none of the above are without risk, but they are paying out a lot of cash and I think they will do just fine over the next few years.  I own EGLE and STON, and I have owned the preferreds. 

I did not do much research, but dividend payout ratios of 180% and 794% do not look sustainable..

I would do something like Dow with a 3.5 yield, a little over 8 PE and only a 29% payout rate...

 

[brewer12345]

I did not do much research, but dividend payout ratios of 180% and 794% do not look sustainable..

For EGLE, CHC and STON, you can ignore net income. Look at cash flow.

 

[Tony Tampa]

brewer 12345,

Thanks again. I will check out some of your picks. It seems a lot of these CEF discounts gap widely at years end. I will heed your advice and keep an eye on a few.

 

[unclemick]

Yup

Keep posting picks Brewer and anyone else who wants to chime in - I'm starting a mad money list. Can't get the Norwegian widow out of my system - so I try to 'quasi pair' a lower div stock with a higher div payer to get the the overall individual stock portfolio north of 3% so it in turn works with the larger balanced index portfolio - ie - so total ER portfolio gives me at least 3% current yield(fallback core budget).

 

[wildcat]

UM2 -

I am watching the Bausch and Lomb situation - BOL. I think it could get interesting. Not much in the way of dividends but the cheap factor may kick in at some point. If it pulls back a lot I still recommend Verifone - PAY. No dividend, sorry.

 

[mikew]

In an attempt to "juice" the yield I've also looked at closed end funds but don't
know much about where to begin. I've been to the ETF and Nuveen sites
and get the discount thing but fees seem high and many are leveraged.
Quantumoline is a very good resource but it gets down to actually making the call onsomething. Preferred stocks might be my best alternative. Thanks again to all for your thoughts.

I would check morningstar's CEF discussion board.

Mike

 

[brewer12345]

UM2 -

I am watching the Bausch and Lomb situation - BOL.  I think it could get interesting.  Not much in the way of dividends but the cheap factor may kick in at some point.  If it pulls back a lot I still recommend Verifone - PAY.  No dividend, sorry.

I have been keeping an eye on BOL, too, but management appears to be making exactly the wrong moves in response to the problem, so I am in no hurry to buy the stock. I think it will keep falling for some time and I will take a serious look once it settles. Might be of interest in the 30s.

 

[Dawg52]

I think you can do very well with CEFs, but you need to be aware that the leverage will bring with it more risk/volatility.  Fees are usually high, but you can make up for it by picking a fund with an expense ratio that isn't too nuts and making sure you buy at a significant discount to NAV.  If you keep an eye out, CEFs go to fat discounts to NAV on a regular basis.  I watched HPF go to a 15% or so discount late last year as the capital markets were getting topsy turvy.  It is now at 6% and change, plus the fund spat out a lot of income in the meantime.

So if you want to buy CEFs, pick a few and then wait for your chance.  I like HPF (mostly preferreds), as mentioned above (it is leveraged).  I also like PDT (mix of preferreds and equity, leveraged) in part because it is about 40% owned by an insurance company and when it falls to a fat discount to NAV the usually step in and buy a ton.  If it stayed too far for too long, they would buy up enough to break up the fund and distribute the assets (i.e. force it to go to NAV).

I'm glad you mentioned the Hancock funds. I've had my eye on those. Look into your crystal ball and tell what is a good entry point with HPF and PDT. 

 

[brewer12345]

I'm glad you mentioned the Hancock funds. I've had my eye on those. Look into your crystal ball and tell what is a good entry point with HPF and PDT. 

For HPF, I'd watch for a 14 or 15% discount to NAV. For PDT, I think it rarely gets to far into the double digits for the discount, so a 10 or 11% discount would probably have me trotting out my checkbook.

 

[wildcat]

I have been keeping an eye on BOL, too, but management appears to be making exactly the wrong moves in response to the problem, so I am in no hurry to buy the stock. I think it will keep falling for some time and I will take a serious look once it settles. Might be of interest in the 30s.

Yeah mgt is really blowing it and I suspect the media vultures will roast them. 30s sounds pretty good to me as well.