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JPS: A High-Yield (Yet Pricey) Closed-End Fund

Published Wed, 01 May 2019 14:04:44 -0400 on Seeking Alpha

Investment Thesis
Investors may benefit from the high yield provided by Nuveen Preferred & Income Securities Fund (JPS), however, the yield is greatly diminished by an oversized expense ratio, the fund's NAV has decreased over the past five years, and recent price history has gone mostly sideways. As I will highlight below, JPS is not a suitable investment for a long-term, low-cost, passive investment portfolio.
Background
From the fund's website, JPS is a CEF that "seeks primarily to offer high current income consistent with capital preservation. The fund invests at least 80% of its managed asset in preferred and other income-producing securities, including hybrid securities such as contingent capital securities. At least 50% is invested in securities that are rated investment grade (BBB/Baa or better). The fund uses leverage." JPS is almost 17 years old and was established on September 24, 2002. The website lists the fund's total managed assets as $3.042 billion.
Distributions
Distributions are paid monthly. JPS has paid $0.056 per share since July 2018 and $0.062/share before that time period, as shown below:

Using JPS's most recent closing price of $9.41 on 04/30/2019, this results in a dividend yield of 7.86% with the special December 2018 dividend and 7.27% without the special dividend.
Expense Ratio and Liquidity
As shown in a table from the fund's website, JPS's total expense ratio of 2.58% is comprised of the following items:
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Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
DIVIDEND ANDOME FUND 12.00   0.0 0.00 0.00 6.67
TCW STRATEGIC INCOME FUND 5.78   0.0 0.00 0.37 6.29

DIVIDEND ANDOME FUND - DNI
DIVIDEND ANDOME FUND - DNI  


Older articles featuring Dividend Andome Fund (DNI):
The Chemist's CEF Report - July 2018: Treasury Yield Spread Continues To Narrow
Dividend Sensei's Portfolio Update 39: 3 Reasons You Should Avoid This Dangerous Type Of High-Yield Stock
Paying Heed To Dividend Sustainability: CEF Weekly Update
Dividend And Income Fund: High Income Closed-End Fund With Discount Capture 'Alpha'
12 High-Yield Managed Distribution Policy Funds
24 CEFs Yielding Over 10% Trading At A Discount To NAV: Part II, 9% To 12% Discount

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