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HTD: 8.6% Yielding Utility And Preferred Fund For Attractive Income

Published Sun, 20 Sep 2020 17:48:56 -0400 on Seeking Alpha

Seeking AlphaClosed End FundsHTD: 8.6% Yielding Utility And Preferred Fund For Attractive IncomeSep. 20, 2020 5:48 PM ET|| About: John Hancock Tax-Advantaged Dividend Income Fund (HTD), Includes: AEE, AEP, D, DRUA, ETR, FLC, IPLDP, PPX, SCE.PG, XLUby: Nick AckermanNick Ackerman CEF/ETF Income LaboratoryCEF/ETF income and arbitrage strategies, 8%+ portfolio yieldsSummaryThis fund is currently offering investors a distribution of 8.6%+.
The utility sector has been rather weak and even on a YTD basis has performed poorly.
This poor performance has left the valuations of the underlying to become that much more attractive - especially in the next downturn.
Written by Nick Ackerman, co-produced by Stanford Chemist
John Hancock Tax-Advantaged Dividend Income Fund (HTD) holds a hybrid blend of utility positions and financials. The financial exposure is primarily through preferred offerings. This makes HTD a rather income-focused play. Though, this year they have struggled along with the utility and financial sectors. Adding in the leverage and we see that HTD has experienced much greater downside.
One thing that caught my attention is when we last covered Flaherty & Crumrine Total Return Fund (FLC) recently, that their preferred positions are doing rather well. At the same time, HTD is still struggling in that sleeve of their portfolio. They aren't alone either as John Hancock's other preferred funds and several of Nuveen's preferred funds are also showing pretty significant losses relative to the Flaherty & Crumrine offerings. While they had selected the better performing preferred portfolio - that does leave HTD with the lower valued positions. They do have overlapping positions too, as financials make up a large portion of the preferred offering on the market.
HTD is also more than just their preferred positions, and the utility side of their portfolio has been a struggle as well. Along with the fund's discount, I believe that HTD is in a great... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND 21.51   0.0 0.00 0.00 6.34
DOMINION RESOURCES 78.54   53.8 1.46 3.67 4.77
ENTERGY 113.89   22.3 5.10 3.64 3.24
AMERICAN ELECTRIC POWER 92.02   23.0 4.00 2.68 2.94
AMEREN 76.50   23.7 3.23 1.90 2.56

FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND - FLC
FLAHERTY & CRUMRINE/CLAYMORE TOTAL RETURN FUND - FLC  


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