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A 10.7%-Yielding CEF: The Cushing Renaissance Fund

Published Mon, 10 Dec 2018 08:16:52 -0500 on Seeking Alpha

Note: The data herein are as of November 25, 2018, when an unabridged version of this article was first presented to The Natural Resources Hub (TNRH) investment community members.

Cushing Renaissance Fund
The Cushing Renaissance Fund (SZC) as a closed-end fund (aka, CEF) holds as its investment objective to seek high total return with an emphasis on current income by investing at least 80% of its managed assets in:
companies across the en­ergy supply chain spectrum, including upstream, midstream, and downstream energy companies, as well as oil and gas services and logistics companies, and energy-intensive chemical, industrial and manufacturing companies expected to benefit from lower energy and feedstock costs. The Fund will invest no more than 25% of its managed assets in securities of energy MLPs.
Top holdings
SZC holds 57.32% in U.S. stocks, 16.87% in non-U.S. stocks, and 25.62% in bonds (see here). Here are the top 10 holdings of the fund as of the 3Q2018 as given in its fact sheet.

I particularly like the fund's upstream positions in Viper Energy (VNOM) and BP Plc (BP), both of which have already been included as the members of the TNRH income model portfolio. Among the midstream holdings, Energy Transfer, L.P. (ET) is a major pipeline operator all over the U.S.; DCP Midstream LP (DCP) is a natural gas midstream play, whose Mewbourn 3, a cryogenic natural gas processing plant in the DJ Basin, got a new life following the defeat of... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SUNOCO LP 31.35   20.8 1.51 3.30 10.51
TARGA RESOURCES 39.28   0.0 -1.32 3.64 9.30
DCP MIDSTREAM LP 36.33   51.2 0.71 3.12 8.59
CVR ENERGY 41.02   10.5 3.92 3.00 7.06
BP 37.67   14.3 2.64 2.44 6.45
DOMINION RESOURCES 78.54   53.8 1.46 3.67 4.77


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