2 CEFs Custom-Built for This Crash (7.8% yields ahead)

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The Contrary Investing Report > JPM

Let’s set aside the noise and talk about the one thing that matters most in a volatile market like this: earnings.

According to recent FactSet data, analysts expect negative earnings growth in the first quarter of 2020. That’s no surprise, given the battering the coronavirus is laying on some sectors of the economy.

But even so, the projected decline as I write was still reasonable: just 0.1%. Things can still change, of course, but it’s important to note that this modest decline comes after a fourth quarter in which earnings grew following three straight quarters of declines—and despite analyst expectations of a 1.7%… Read more

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Preferred stocks often pay high-single-digit yields, with far less risk than their similar-yielding “common” stock cousins. While many 5% and 6% common payers are yield traps with broken business models, it is possible to find preferred payouts at these levels that are perfectly secure.

Not yet familiar with preferred stocks? With “common” shares paying so little, it’s time to get acquainted.

Most dividend darlings don’t pay much on their own common shares today. You’ll be hard-pressed to find a dividend aristocrat with a yield above 3% or a P/E ratio below 20.

On the other hand, a company will issue preferred shares to raise capital.
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