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RNP: A Reliable 7.57% Yield From This Steeply Discounted Fund

Published Wed, 23 Sep 2020 08:45:55 -0400 on Seeking Alpha

Seeking AlphaClosed End FundsRNP: A Reliable 7.57% Yield From This Steeply Discounted FundSep. 23, 2020 8:45 AM ET|| About: Cohen & Steers REIT & Preferred Income Fund (RNP), Includes: AMT, CCI, EQIX, EXR, MS, MS.PA, MS.PE, MS.PF, MS.PI, MS.PK, MS.PL, PFF, PSA, PSA.PB, PSA.PC, PSA.PD, PSA.PE, PSA.PF, PSA.PG, PSA.PI, PSA.PJ, PSA.PL, PSA.PM, PSA.PW, PSA.PX, PSALL, RFI, RQI, SPG, SPG.PJ, TCO, TCO.PJ, TCO.PK, UDR, XLREby: Nick AckermanNick Ackerman CEF/ETF Income LaboratoryCEF/ETF income and arbitrage strategies, 8%+ portfolio yieldsSummaryNot all REIT sectors are the same, some sectors are a higher risk than others - RNP is primarily in the camp of quality.
RNP's distribution remains attractive, though coverage dipped a bit in the latest report.
The fund's steep discount is presented to investors due to REITs selling off indiscriminately.
Written by Nick Ackerman, co-produced by Stanford Chemist
The Cohen & Steers REIT and Preferred Income Fund (RNP) went through a wild ride when the market panic hit in March. This was due to two reasons; the hit that the REIT market took, and the preferred exposure this fund has. Preferred shares are generally viewed as safer since they are higher up in the event of a bankruptcy. They are also generally considered to be more stable, as they should typically trade near par levels. However, during a crash, investors will look for anything to sell off as they need to raise cash - potentially to meet margin calls. Additionally, preferred shares have lower trading volumes so liquidity becomes an issue. Where there are more sellers than buyers, we see a rapid collapse in prices. Discounts in RNP exceeded 15% briefly before making their way back. However, the fund is still trading at one of the widest discounts in the REIT space and I believe that is a huge opportunity.
As I've mentioned in the past, REITs do have their issues at the moment. I've highlighted the good sectors and the bad sectors in the REIT space. Along... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
COHEN & STEERS TOTAL RETURN REALTY FUND 14.98   0.0 0.00 0.00 6.56
COHEN & STEERS QUALITY INCOME REALTY FUND 15.60   0.0 0.00 0.00 6.30
TAUBMAN CENTERS 43.64   59.0 0.74 2.70 6.16
ISHARES S&P US PREFERRED STOCK INDEX FUND 37.21   0.0 0.00 2.08 5.60
SIMON PROPERTY GROUP 155.27   20.8 7.48 8.40 5.21
MORGAN STANLEY 44.32   9.7 4.59 1.40 3.21
PUBLIC STORAGE 249.58   29.8 8.38 8.00 3.20
EXTRA SPACE STORAGE 117.00   34.7 3.37 3.60 3.11
UDR 48.03   84.3 0.57 1.37 2.86
AMERICAN TOWER 218.85   66.3 3.30 3.68 1.70


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