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Income Lab Ideas: Dividend Reinvestment Plan

Published Fri, 03 Apr 2020 08:00:00 -0400 on Seeking Alpha

Exploring another way on how closed-end funds can grow their share count and managed assets.
Generally, if a fund is trading at a premium, this is the win-win-win situation.
A large majority of DRIPs are implemented in the same manner, as well as the vast majority of funds offering them.
Co-produced by Stanford Chemist
A dividend reinvestment plan or DRIP can be a win-win-win for those that utilize the plan, current shareholders and the fund managers themselves. There seems to be a similar standard that we typically see as far as how closed-end funds implement such a plan. This is a more in-depth look at DRIPs more specifically from when we covered the subject of "How Do Closed-End Funds Grow Their Share Count?"
This relates to that previous piece as it is one of the three ways that funds grow their share count and ultimately, their assets under management. It is generally the slowest way that funds grow their share count. Essentially, the fund is "retaining" what it would have normally paid out to a shareholder in the form of a distribution.
In the case of the DRIP, we generally see new shares created when the fund is trading at a premium. If, however, shares are trading at a discount it is less of a win-win situation for current shareholders and fund managers. With that being said, it can still be beneficial to investors that participate in such a program. This is for the simple fact that those that do participate basically have their investment on auto-pilot. Thus, automatically growing their share count without having to do anything. They don't even have to look at their account.

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The case when it can be the win-win-win situation is when shares trade at a premium though. That is what we will primarily be looking at today. Additionally, this should help many newer readers better understand CEFs. It might also be a greater refresher or be helpful for older readers as well. This is a topic that comes up quite a bit at the Income... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CORNERSTONE TOTAL RETURN FUND 11.38   0.0 0.00 2.48 22.00
CORNERSTONE STRATEGIC VALUE FUND 11.65   0.0 0.00 0.00 21.09
OXFORD LANE CAPITAL 9.73   0.0 0.00 1.62 16.65
EAGLE POINT CREDIT 16.14   0.0 -1.13 2.40 14.64
GABELLI EQUITY TRUST 6.14   0.0 0.00 0.64 10.41
PIMCO INCOME STRATEGY FUND II 10.42   0.0 0.00 0.00 9.17
EATON VANCE TAX-MANAGED BUY-WRITE OPP FUND 14.76   0.0 0.00 0.00 9.00
EATON VANCE TAX-ADV GLOBAL DIVIDEND OPP FUND 25.20   0.0 0.00 0.00 8.60
PIMCO CORPORATE OPPORTUNITY FUND 18.05   0.0 0.00 1.69 8.59
EATON VANCE TAX-ADV GLOBAL DIVIDEND INCOME FUND 16.41   0.0 0.00 0.00 7.54
MACQUARIE GLOBAL INFRA TOTAL RETURN FUND 23.88   0.0 0.00 0.00 7.07
COHEN & STEERS INFRA FUND 27.26   0.0 0.00 0.00 6.88
ALLIANCEBERNSTEIN GLOBAL HIGH INCOME FUND 11.78   0.0 0.00 0.00 6.68
BLACKROCK ENHANCED DIVIDEND ACHIEVERS TRUST 9.21   0.0 0.00 0.00 6.51
COHEN & STEERS REIT 23.56   0.0 0.00 0.00 6.38
COHEN & STEERS QUALITY INCOME REALTY FUND 15.60   0.0 0.00 0.00 6.30
BLACKROCK HEALTH SCIENCES TRUST 38.18   0.0 0.00 0.00 6.26
JOHN HANCOCK BANK AND THRIFT OPPORTUNITY FUND 32.54   0.0 0.00 2.57 6.23
GABELLI DIVIDEND & INCOME TRUST 21.71   0.0 0.00 0.00 6.11
REAVES UTILITY INCOME FUND 36.75   0.0 0.00 0.00 5.89
EATON VANCE 46.61   13.7 3.41 1.40 3.09
BLACKROCK 434.75   16.5 26.34 13.20 3.08
COHEN & STEERS 54.76   21.7 2.52 1.44 2.73

CORNERSTONE TOTAL RETURN FUND - CRF
CORNERSTONE TOTAL RETURN FUND - CRF  


Older articles featuring Cornerstone Total Return Fund (CRF):
Style-Box Update, Small-Cap And High-Yield, And Sector Returns
Bear Market Thoughts: Is Closed-End Fund Investing 'Chasing Yield?'
Dividends By The Numbers In January 2020
Stocks Yielding More Than Bonds Again
A Steeper Yield Curve Should Benefit Financial Stocks
Dividend Yields Around The World
Dividends By The Numbers In October 2019
Yield Curve Disinversion
Bond Market History: When The Yield Curve Un-Inverts
Why Does A Yield Curve Inversion Suggest A Recession?

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