We’re in one of the trickiest times I’ve seen in my investing career: inflation is receding and we’re well positioned for gains next year. Yet after the year we’ve had, many folks are still hesitant to jump into the market.
Even the 12%+ dividends we’re seeing in our favorite high-yield investments, closed-end funds (CEFs) haven’t been enough to tempt many of them.
I get it.
This period reminds me of the early months of 2009, when “green shoots” were appearing in the economy and markets, but investors were still too scarred by the preceding plunge to get in. But those who did buy then—around the bottom in early March 2009—have done very well!
We’ve got a similar opportunity now. And we CEF investors know we can do much better than those who buy the go-to index fund, the SPDR S&P 500 ETF Trust (SPY PY SPY ). In fact, one of the CEFs we’ll look at below was around in ’09—and it’s crushed SPY, with a 756% return—and 80% of that gain in dividends!
This is why we invest in CEFs—with most of our return coming as dividends, we can sit back and collect our payouts in market declines while the rest of the crowd must sell to supplement their income.
We’ll take a look at the 9.7%-yielding fund that defied SPY below, plus two more that have been pushed deep into bargain territory.
First, let’s talk about those “green shoots.” They set up our opportunity to buy top CEFs at bargain prices—and hold them for income and upside.
Don’t Believe the Hype: Inflation Is Ebbing
Lately, you’ve probably noticed various Fed members out making the media rounds, talking tough about the need for higher rates to beat inflation.
Don’t buy it. This “jawboning” is solely meant to keep investors and consumers on the sidelines so the Fed’s rate hikes can do their job. Thing is, the job is already being done (and then some).
For one, recent consumer price index (CPI) and the producer price index (PPI) reports have come in much lower than expected. Shipping costs, too, have returned to pre-COVID-19 levels.
We’ve seen other costs fall quickly, too, like gas prices, which are still far below the pre-Ukraine War peak as Europe succeeds in storing enough energy for the winter.
All of this is pointing to lower inflation ahead, a trend the Fed will have to start paying attention to.
3 CEFs to Consider as Inflation (and Rate Hikes) Downshift
Meantime, the market remains oblivious—sitting in deeply oversold territory as it prices in a hard landing caused by inflation and soaring rates.
This disconnect is the source of our CEF profits. But I understand that many folks are still wary, so I’ve lined up three CEFs for you to consider, ranging from conservative to more aggressive.
Conservative: Own the Dow With a “Volatility Cushion” (and a 7.3% Dividend)
Our more conservative pick is the Nuveen Dow 30 SM Dynamic Overwrite Fund (DIAX), which owns the large caps in the Dow 30 index. So you’re getting strong firms that have weathered difficult markets in the past, such as UnitedHealth Group UNH (UNH), McDonald’s (MCD) and Visa (V).
That gives us a level of safety, as these companies have the strong balance sheets and revenues they need to face a recession.
The other “downside limiter” is the fact that DIAX sells covered-call options. Using this strategy, it sells the option to buy its stocks at a fixed price in the future. If the stock hits that price, DIAX sells it to the option buyer and keeps the fee it charges for the option. If not, it keeps the stock and the fee.
This is a low-risk strategy that provides income DIAX adds to its payout, which yields 7.3% today. The fund gets further downside protection (and upside potential) from its 4.5% discount to net asset value (NAV, or the assets in its portfolio). That’s a unique feature to CEFs; ETFs like SPY never trade at discounts.
DIAX is one of the lowest-risk CEFs for stock exposure. But its covered-call strategy also limits your upside, as the fund will likely sell its holdings before they hit their full potential.
Average Risk: A Large-Cap CEF With a 9.6% Payout
Our next CEF, the Liberty All-Star Growth Fund (USA), is the one we touched on earlier, which has outpaced the S&P 500 since the end of the 2008/’09 financial crisis. It holds large caps like Amazon.com (AMZN), Alphabet (GOOGL) and Berkshire Hathaway BRK.B (BRK.B), plus a smattering of small- and midcap names, too.
That outperformance has resulted in strong dividends, as USA bought and sold its portfolio and handed the profits over as a high dividend (current yield: 9.7%).
In fact, USA has given shareholders steady payout increases, too. (The fund links its dividend to its portfolio performance, paying out 8% of its NAV per year. This gives it the flexibility to pick up oversold bargains when the opportunity arises).
USA does trade at a slight (3%) premium to NAV, but it’s traded at premium for most of the last three years, and often higher ones. That leaves USA fairly valued in light of its high-quality portfolio and potential for bigger payouts as stocks recover.
More Aggressive: A 13.7% Dividend From Oversold Tech
For even more upside potential and bigger payouts, look to the 13.7%-yielding BlackRock BLK Science and Technology Trust II (BSTZ).
With a massive 17.4% discount to NAV, BSTZ has priced in just about every disastrous outcome for the economy that you could imagine. Its discount is now at levels unseen since the pandemic hit March 2020. There’s little reason to think BSTZ should be as cheap now as it was in those dark days.
BSTZ focuses on tech, which also bodes well, as the sector that’s the most beaten-down in a selloff (tech, in the case of 2022) is often the one that leads the recovery. It also benefits from its manager, BlackRock, the world’s largest investment firm, with $10 trillion in assets. BlackRock’s size and deep connections in the tech sector give BSTZ’s managers an unsurpassed level of insight into the stocks they buy.
As for the portfolio, BSTZ has acquired shares of fast-growing tech firms like semiconductor makers Marvell Technology MRVL (MRVL) and Wolfspeed (WOLF). It complements those with strong cash-flow generators like Pure Storage PSTG (PSTG) and TransUnion TRU (TRU). Buying TRU, which trades at 9.4 times its last 12 months of earnings and posted a 30% revenue gain in its latest quarter, was a stroke of genius, and further evidence that BSTZ’s managers know their stuff.
Michael Foster is the Lead Research Analyst for Contrarian Outlook. For more great income ideas, click here for our latest report “Indestructible Income: 5 Bargain Funds with Steady 10.2% Dividends.”
Bitcoin ATM – Learn More About Quick Change Cash to Cryptocurrency
Cryptocurrencies such as Bitcoins have become a global currency. They are well-known globally and more popular than traditional money, for example American Dollar.
This article will tell more about Bitcoin ATMS with zero commissions, how to change crypto to cash in a short time or how to find the most beneficial Bitcoin ATMs.
- Bitcoin ATM with 0% commission
- Bitcoin ATM can change cash on several cryptocurrencies
- How to change cash on cryptocurrency?
- Where to learn about bitcoin ATMs?
- Is it safe to use Bitcoin ATMs?
- What are the Bitcoin ATMs locations?
- What are the opening hours of Bitcoin ATMs?
- Where can you find some information on exchange rates?
- Where can you find some more information on Bitcoin ATMs?
Bitcoin ATM with 0% commission
When you want to buy and sell bitcoin you do not have to pay an additional fee in your area like many different bitcoin ATMs charge (even 8%). Every bitcoin ATM provides transactions with 0% commission. What is more, the clients can get various discounts and enjoy higher exchange rates.
Bitcoin ATM can change cash on several cryptocurrencies
Although Bitcoin is the most recognizable cryptocurrency in the world, there are also other cryptocurrencies worth mentioning. What is more, they are also available in the bitcoin ATM. They are the following: Tether (USDT), Litecoin (LTC), Tron (TRX) and Ether (ETH). The whole process – it means converting cash to your favourite cryptocurrency lasts a few minutes.
It is very intuitive and every user can change cash to crypto without any problems.
How to change cash on cryptocurrency?
It is very simple to use the Bitcoin ATM. It is similar to withdrawing money from a standard ATM. The first thing you have to do is to insert cash and then scan qr code. Next, you have to select the transaction details (exchange rate and transaction fee) and finally the cryptocurrency is transferred to your wallet.
It is childishly easy to use the bitcoin ATM. As an outcome, it is also popular in Ukraine where the war with Russia takes place.
Where to learn about bitcoin ATMs?
If you want to get some relevant knowledge on bitcoin ATM and how to buy and sell bitcoin and litecoin you should visit the official social media of bitcoin ATM. There is a tutorial for beginners who have never tried the bitcoin ATM and want to know what bitcoin ATMs are.
The popular social media where you can find the information are You tube and Facebook. Furthermore, it is worth watching it regularly to learn more about special offers or unique discounts for anonymous bitcoin buyers and sellers.
Is it safe to use Bitcoin ATMs?
The clients should feel safe during converting cash to cryptocurrency. That is why, the bitcoin ATMs are located in public places, mainly in the shopping malls where the advance monitoring system is provided. What is more, it is also possible to change cash to cryptocurrencies in independent places. However, in those places the doors are locked and the person who is doing the transaction can feel safe.
What are the Bitcoin ATMs locations?
If you need to change cash to cryptocurrency, you have to see the bitcoin ATM map. There you can find all bitcoin ATMs in your area. What is more, you can get some interesting details about the bitcoin ATM. There is provided the name of the city with a detailed address as well as additional information on the bitcoin ATM. Moreover, you can find there also a picture of the bitcoin ATM and available funds to withdraw at the moment.
What are the opening hours of Bitcoin ATMs?
If you are in Madrid, the capital city of Spain you can check the opening hours of Bitcoin ATMs Madrid online. At the same website where you can check the location of a bitcoin ATM, there is some information about opening hours. The majority of bitcoin ATMs are open 24 hours, 7 days a week and they are available in the shopping malls or independent places. However, some of them are available in limited time.
That is why, it is always worth checking the opening hours before you visit the bitcoin ATM.
Where can you find some information on exchange rates?
The exchange rate is the crucial information when it comes to converting cash to cryptocurrencies. However, it is not a problem when you use the bitcoin ATMs. At the website where the detailed address and opening hours are provided you can also find some information about the current exchange rate.
It is worth selecting the place that offers the best exchange rate before you leave your house.
Where can you find some more information on Bitcoin ATMs?
Before you make a transaction at a bitcoin ATM, you should learn more about the bitcoin ATMs. You can do it at the official website of the device or at one of the YouTube channels where the latest information and detailed tutorial are provided.
You should also visit Facebook and Instagram where the latest news is updated and find out that there are more and more bitcoin ATMs in your location.
The Future Of Economic And Workforce Development
Our economic attention currently is fixed on national policy, with growing risks from a debt limit deadlock and debates over inflation versus recession. But economic prosperity also depends on state, regional, and local policy, and now there’s a free guide to some of the best thinking in the field in the newest edition of the Economic Development Quarterly (EDQ).
EDQ is a leading journal overseen by the W.E. Upjohn Institute for Employment Research. It brings together practitioners and scholars through “supporting evidence-based economic development and workforce development policy, programs, and practice in the United States.” (I’m a member of the editorial board, and also a contributor to this new issue.).
The new issue asked experts associated with the journal “what are the key research and policy questions facing economic development and workforce development today?” In order to reach a broad audience, including policy makers, academics, journalists, and the public, the issue is free for a limited time.
There are 15 articles in the issue, and their range and excellence make it impossible to summarize them. Some focus on companies and firms, including how entrepreneurs can be included in economic development, what policies and programs are most effective in supporting businesses and job creation. Other analyze how public economic development and workforce professionals in the field can be most effective in our complex and tangled systems.
Several articles examine changing workforce dynamics. How can policy engage with macro trends like globalization, high housing costs, and changes in commuting and working from home? Can greater inclusion for the workforce be part of an effective economic development strategy? What would economic development look like if it paid more attention to environmental, racial equity, and family and household issues?
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My contribution draws on my new book, Unequal Cities: Overcoming Anti-Urban Bias to Reduce Inequality in the United States. The book outlines how America depends on cities for innovation, growth, and productivity, but also how our political systems—regional, state, and national—are biased against cities.
That pervasive bias holds down both regional and national productivity and growth. And it perpetuates racially stratified inequality in jobs, economic growth, housing, and education.
Wealthy (and predominantly white) suburbs capture the lion’s share of urban economic growth while not paying their fair share of the costs. That ongoing and structural racial bias is perpetuated over time by our public policies and fragmented metropolitan governments. This in turn makes it very hard for cities to address these problems on their own.
I argue that hyper-mathematized models in urban economics divert energy from more empirical engagement on our economic and workforce problems. We need multi-disciplinary analysis of policy, with special attention to how seemingly neutral policies generate racial and other forms of inequality. And we must recognize how our metropolitan fragmentation and segregation hold back shared economic prosperity.
Although there’s a wide range of policy viewpoints in the EDQ issue, all of the authors use research and analysis to help improve the places where we live. That distinguishes this work from much of mainstream urban economics, which is skeptical of place-based policies. Standard urban economics favors individually-based approaches emphasizing education and skills, and encouraging mobility by companies and people.
Of course, education and skill development are essential components of sound policy, and several of the EDQ articles suggest how to improve it. But in the real economy, experts like those at the Economic Policy Institute show our policy bias towards individualized and company-focused approaches hasn’t led to shared prosperity.
Instead, as watchdog analysts like Good Jobs First point out, we far too often see wasted tax subsidies going to firms that don’t need them, without good jobs and other benefits that were promised in return for the tax breaks. Public education mirrors the unequal fragmentation of regional governments, with suburbs creating better education from their higher property tax bases and wealth while core cities struggle to generate adequate educational funding.
So if you’re interested in economic and workforce development, national and regional and city prosperity, and how equity and growth can be combined in public policy, get your free issue of Economic Development Quarterly. I’m proud to be in such distinguished company, and there’s a lot to learn from them.
What To Expect From Altria’s Q4?
Altria (NYSE: MO) is scheduled to report its Q4 2022 results on Thursday, January 26. We expect MO stock to see little movement, with its revenue and earnings aligning with the street expectations. Although the company should continue to see a decline in cigarette volume, given the declining market and higher inflation, pricing growth will likely help offset the revenue loss from volume. While we expect little movement in MO stock based on its Q4 results, it has more room for growth from a valuation perspective, as discussed below. Our interactive dashboard analysis of Altria Earnings Preview has additional details.
(1) Revenues expected to align with the consensus estimates
- Trefis estimates Altria’s Q4 2022 revenues to be around $5.2 billion, reflecting a low single-digit y-o-y rise and in line with the $5.2 billion consensus estimate.
- Altria sells its tobacco products in the U.S. Revenue is generated from selling cigarettes, oral tobacco, and smokeless products.
- While the company is expected to see continued pricing growth, lower volume/mix will likely weigh on its top-line growth.
- Looking at Q3 2022, the company reported net revenue of $5.4 billion, marking a 2% decline over the prior-year quarter.
- The decline in revenue can be attributed to lower cigarette volume (down 9%) and the sale of its wine business in October 2021.
- Our dashboard on Altria Revenues has details on the company’s segments.
(2) EPS likely to be in line with the consensus estimates
- Altria’s Q4 2022 adjusted earnings per share (EPS) is expected to be $1.17 per Trefis analysis, aligning with the consensus estimate. This compares with the $1.07 figure the company reported in the prior-year quarter.
- The company’s net income of $2.3 billion in Q3 2022 reflected a modest rise from the $2.3 billion figure seen in the prior-year quarter due to a 90 bps y-o-y rise in operating margin to 58.9%.
- For the full-year 2023, we expect the adjusted EPS to be higher at $5.11 compared to the EPS of $4.61 in 2021 and an estimated $4.83 in 2022.
(3) MO stock looks like it has some more room for growth
- We estimate Altria’s Valuation to be around $52 per share, which is 16% above the current market price of $45.
- At its current levels, MO stock is trading at a little under 9x forward EPS estimate of $5.11 in 2023, compared to the last three-year average of about 10x, implying that it has some room for growth.
- If the company reports upbeat Q4 results and provides a 2023 outlook better than the street estimates, the P/E multiple will likely be revised upward, resulting in higher levels for MO stock.
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While MO stock looks like it has some room for growth, it is helpful to see how Altria’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
Furthermore, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Ecolab vs. Philip Morris.
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates
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