Nine issues that could get you 10 percent
.bodytext {float: left; } .floatimg-left-hort { float:left; margin-top:10px; margin-right: 10px; width:300px; clear:left;} .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 10px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 10px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 10px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} Dear Mr. Berko:
I have precisely $55,000 to invest from the sale of a business last month that I thought, except for two assets, might be worthless. Because I thought I was ready to bankrupt this business, that $55,000 is found money for me. So I’d like to invest in some very risky stocks that yield 10 percent or better and have a possibility of recovering in market value. In a sense, it would be like getting 10 percent or better on my money as I wait for a recovery in those issues. If I lose my money, so what? I thought I had lost it 10 months ago. So give me issues with 10 percent or better yields, recovery potential and, in your opinion, some dividend stability for the next few years.
S.K., Kankee, Ill.
Dear S.K.:
Here are nine issues. The dividends of each have yields above 10 percent and have good survival potential. But be mindful that owning these issues is as dangerous as skydiving with a torn parachute. You’ll get down, all right, but you could break a leg upon landing.
● Countrywide Financial Corp. 7 percent Preferred B (CFCPRB-$10.99) yields 13.7 percent. CFCPRB is rated BBB-plus by Moody’s, its 52-week price range is $26 to $9.50, and it’s callable at $25. I believe this huge mortgage company will heal and that the preferred — while rocky as a gully of stones — will survive, and the dividend is safe. The Street thinks CFC will earn a minimum of 25 cents per share in 2008.
● Nicholas-Applegate Convertible & Income Fund (NCV-$11.84) pays $1.50 per share and yields 12.7 percent. NCV has a $1.5 million portfolio of convertible (and nonconvertible) issues and trades at a discount to net asset value. This actively managed closed-end fund may also have good capital gains potential.
● ING Global Equity Dividend Premium Fund (IGD-$16.34) trades at a discount to NAV, and the $1.91 per share dividend produces an 11.7 percent yield.
● General Motors Corp. 7.375 percent Preferred (HGM-$16.07) pays a $1.84 per share dividend yielding 11.4 percent.
● American Capital Strategies Ltd. (ACAS-$33.07) a business development firm with a good record, pays a $4 per share dividend and has a long record of excellent dividend growth. The 12.1 percent dividend is about 80 percent nontaxable and considered a return of capital.
● Municipal Mortgage & Equity LLC (MMA-$15.40) services and owns multifamily debt and equity for its own account and those of others. There are 860 properties containing 90,000 living units. The dividend has been raised for 45 straight quarters. Now paying $2.10 per share, it yields 13.6 percent and is 80 percent nontaxable. There is no (zero) subprime exposure here.
● CapitalSource Inc. (CSE-$17.37) is a commercial finance company providing loans between $5 million and $250 million to companies that require customized and sophisticated debt financing. The $2.40 per share dividend yields 13.8 percent, is 85 percent nontaxable (return of capital) and could be raised for the fourth straight year.
● Baytex Energy Trust (BTE-$18.59) pays a $2.19 per share dividend that yields 11.8 percent and is about 75 percent nontaxable as a return of capital. BTE as an open-end investment trust engages in the exploration, acquisition development and production of oil and natural gas properties in Canada.
● BlackRock Inc. Corporate High-yield Fund (HYV-$11.68), a closed-end fund, invests in a portfolio of fixed-income securities in the broadcasting, aerospace, packaging, paper, retail, technology, leisure, gaming, tobacco, health metals, machinery, telecommunications, service, food, financial, energy information technology, media, cable and financial industries. The shares trade at a discount to NAV, and the $1.20 per-share dividend yields 10.3 percent. I expect that the dividend will be raised in 2008.
Good luck to you.
Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.© Copley News Service
Trending News
