Dividend-News

Daily dividend news for investors in dividend stocks


iShares Brings You A High Dividend ETF With 3 Risks

Published Fri, 14 Sep 2018 09:39:59 -0400 on Seeking Alpha

This research report was produced by The REIT Forum with assistance from Big Dog Investments.
One of the major risks for investors in preferred shares is the potential for interest rates to increase. Since many preferred shares have a flat coupon rate, an increase in bond yields would have the potential to put some pressure on the share price.
At the moment, we are seeing bond yields rising again, but overall, we have been relatively flat for the last several months at the long end. We believe the 10-year Treasury yield over the next few months is unlikely to break above 3.25%. We wouldn't be surprised to see it under 3.5% a couple years from now. In the span of a couple years, investors in preferred shares can recoup a significant amount of their investment. For instance, investors picking an individual security with a 7.4% dividend yield would receive more than 22% of their original investment back in the first 3 years.
iShares preferred stock ETF The iShares U.S. Preferred Stock ETF (PFF) is popular among some income investors. It offers a higher dividend yield than most ETFs. For the income investors, the monthly dividend is another selling point. While I believe preferred shares can be an excellent source of additional yield, there are superior options to using ETFs for this exposure.
I see 3 major problems with preferred shares ETFs.
Problem 1 Preferred share ETFs carry a high expense ratio and PFF is one of the better ones in this metric:

... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
ANNALY CAPITAL MANAGEMENT 9.99   4.0 2.52 1.20 11.99
APOLLO COMMERCIAL REAL ESTATE FINANCE 18.80   12.6 1.49 1.84 9.82
GLADSTONE COMMERCIAL 19.43   0.0 -0.11 1.50 7.72
REALTY INCOME 62.68   52.7 1.19 2.65 4.21
NATIONAL RETAIL PROPERTIES 48.25   25.3 1.91 2.00 4.09

ANNALY CAPITAL MANAGEMENT - NLY
ANNALY CAPITAL MANAGEMENT - NLY  


Older articles featuring Annaly Capital Management (NLY):
18 'Safer' 10%+ Yield Dividend WallStars Aggregate For November
10% High-Yield 10 Months 2018 Performance; Including October's Wild Ride
Analyzing AGNC Investment's Results For Q3 2018 (Including November 2018-February 2019 Dividend Projection)
18 'Safer' Dividend FoFa/Ro's Plucked From 42 October Reader Comments
4 Solid Buys With Fat Dividend Yields Within The REIT Sector
REML: Get A 22%+ Yield With This Leveraged ETN
My K.I.S.S. Dividend Growth Portfolio: 3rd Quarter 2018 Update
36% To 123% October Gains Targeted From 'Safer' Dividend 10%+ Yield Equities
2018 Nine-Month Review: 10% High-Yield Retirement Income Continues Unabated
Obtaining Current Yields In Excess Of 15% Using ETNs

More