(This article was released on YouTube on May 4th, May the fifth be with you who didn’t tune in)
Bought BSIF Bluefield Solar at 68.2p and May 1st sold at 83.8p. Thanks for being man’s best friend, Bluey.
But it’s time to give you the shoe-y Bluey. Bwooah! May the fourth is not with you Bluey, sorry. Don’t write in or call the RSPCA, no actual dogs were harmed in the making of this article. Not even in a galaxy, far, far, away.
And you can thank Ed Milli for the boot, Bluey. That tinker.
Tinkering with contractual agreements. A deal’s a deal. But not for Milli. The UK government who were elected on a mandate of GROWTH. Deal breaking is a terrible way to support deal making. Ah well. Its supporters will be happy and broad shoulders can bear the burden. Will renewables investors nursing heavy capital losses now bear new income losses too? Exactly. It’s true that voters were promised lower bills due to green energy? Short term – that’s what they’ll get.
But it makes UK renewables uninvestable in my opinion, due to Milli’s measures taken to reduce bills:
Hiked the Electricity Generator Levy to 55% on revenues above £82/MWh. While oil and gas giants get “investment allowances” to offset their windfall taxes, perversely renewable generators have been hammered with a high headline rate that doesn’t offer the same generous loopholes for reinvestment as fossil fuels.
Milli is “strongly encouraging” legacy renewable generators to move off their lucrative old market-linked contracts and onto fixed-price Contracts for Difference (CfD). It’s being framed as a “voluntary” move to de-link from gas and electricity prices, but the subtext is clear: renewables generators who don’t “volunteer” may face even harsher tax treatment or grid-access deprioritisation. It’s effectively a retrospective raid on the profits of projects built a decade ago.
In an embarrassing admission in April 2026, Ofgem and the government admitted they’ve “over-allocated” grid capacity to battery storage, leading to a regulatory freeze. New rules are being fast-tracked to limit or cancel new battery projects unless they already have revenue support. After telling the industry that storage was the “backbone” of the transition, they are now pulling the rug out from under developers who spent millions on planning and land rights, claiming the system is “overwhelmed.”
Blunders and resets. The newly formed NESO (National Energy System Operator) has been forced to “reset” timelines, effectively telling shovel-ready solar and wind farms to get back in line because the previous administration’s “zombie projects” (projects that exist only on paper) weren’t cleared out properly.
What else does he plan to do too?
Good luck to readers continuing to invest and tempted in this area (I’m sure I’ll get some robust rebuttals on this and some harrumphing) but I’ve decided it’s not for me.
Could the sale of BSIF still yield upside? Yes of course, and it’s got an attractive yield. Or had. Could it be harder to sell the portfolio to a new buyer given Milli’s tinkering? I think so. How can international investors invest into the UK when the rules are akin to those of a Banana Republic. I’m happy to take the 22.9% gain.
Current yield 10.6% so still a hold but maybe time for re-investing the dividends outside of Renewables.
I’ve always wondered if you can improve your Snowball by dividend washing, where you buy a share just before it’s xd date and sell just after.
With most shares the price is marked down by the dividend or more but sometimes it’s not.
The market could dump on u if you before too early before the xd date.
You are liable to lose some capital on the transaction, although if you are lucky, you could earn the dividend and make a capital gain. The aim of the SNOWBALL is to increase the yearly income buy buying shares and re-investing the dividends, whilst retaining the capital and slowly increasing the seed capital invested. As the intention is never to kill the golden goose by selling any golden eggs, it’s not the primary aim of the SNOWBALL
I have sold £200 of TRIG, after allowing for costs at break even, as I needed the funds to buy 1k of GCP, ahead of their xd date this week.
Dealing costs of buying 1320 shares in GCP, including the spread £15.28.
The SNOWBALL has 5k of shares in GCP, so I intend to use this position to do some dividend washing.
The parameters is too restrict the loss of capital to £500 and to re-invest the dividends back into the SNOWBALL. A by product of any dividend washing it makes it easier to achieve this year’s fcast.
If you now jump forward ten years, if the earned dividends are £500 and re-invested at 7%, the income will be 1k per year for the rest of your Snowball, against the loss of capital and the income from any capital loss
The biggest danger to the plan is if you buy a clunker, so the plan is not too hold the new position for very long. The amount for dividend washing may be increased to 10k, subject to the outcome of the first few trades.
The earned dividend for GCP will be £118.00
Only a concept at this stage, as more pondering needs to happen.
Artemis UK Future Leaders PLC ex-dividend date Chenavari Toro Income Fund ltd ex-dividend date CT Healthcare Trust PLC ex-dividend date CVC Income & Growth EURO Ltd ex-dividend date CVC Income & Growth GBP Ltd ex-dividend date Dunedin Income Growth Investment Trust PLC ex-dividend date GCP Asset Backed Income Fund Ltd ex-dividend date GCP Infrastructure Investments Ltd ex-dividend date Marwyn Value Investors Ltd ex-dividend date North American Income Trust PLC ex-dividend date Picton Property Income Ltd ex-dividend date Supermarket Income REIT PLC ex-dividend date
If you buy SUPR before Thursday, you will receive 5 dividends in just over a calendar year. The current dividend 1.545p equates to a yield of 7.25%.
The enhanced yield equates to a yield of around 9%.
If interest rates rise, as fcasted, the price may fall but you could use that as an opportunity to re-invest your dividends back into the share, buying more shares and earning more dividends, as you wait for interest rates to start falling again.
10% Dividends (at a 10% Discount) From This “Hated” Stock Rally
Michael Foster, Investment Strategist Updated: May 4, 2026
This has got to be the most “hidden” (maybe hated?) stock-market run I’ve ever seen.
The headlines are all doom and gloom (I think you’ll agree), but behind it all, the stock market is on a roll—returning 31% in just the last year. That’s more than triple the market’s long-term average yearly return of around 10%.
Where does that leave those of us who look to stocks for growth and income? Is there more runway ahead, or is it too late to buy in?
In my opinion, this 31% gain is setting the table for more, and we’ll get into exactly why in a moment. The setup we’ll break down is doubly attractive for investors in closed-end funds (CEFs), where we can get a discount on what we’d pay if we bought stocks through an ETF or directly on the market.
9%+ Yielding CEFs Give Us a Discount No Matter What the Market Is Doing
Our discount opportunity on CEFs exists in part because the CEF market is tiny, containing only about 400 funds. And CEF buyers tend to be individual, conservative investors.
That second point is key because these investors buy and sell predictably—and they always leave a “discount window” open for us somewhere. Plus, with CEFs, we can forget about the 1% dividend your typical index fund pays. CEFs often yield 9% and more, which means we’re getting the bulk of our return in cash.
I bring CEFs up now because I want to take on today’s stock-market setup—and our plan to buy into it—in two tracks.
First, we’re going to look at why this stock-market run is justified and not at all a bubble. Simply put, this means that a 31% gain in the rearview does not preclude a similar rise looking ahead.
For the second track, we’re going to move from the general to the specific, with a CEF seemingly purpose built to get us into this rise at a discount and a 10.3% dividend, too.
Track 1: An Economy Rolling Through Gloom
Before we go further, I know my bullishness on the economy might seem a little out of step right now, with the Strait of Hormuz closed, cutting off vital resources like oil and fertilizer; rising fear of job losses; and consumer sentiment that hit record lows in April.
Let me counter that gloomy narrative by starting where we always need to start when we’re talking about stocks: earnings.
And thanks in large part to tech breakthroughs (AI, in other words) productivity is jumping, and those gains are showing up in strong corporate earnings growth. As of the end of 2025, profit margins had hit levels unseen in years, with more gains forecast:
Source: FactSet
And contrary to popular opinion, these productivity—and profit—gains are not coming at the expense of jobs. As I discussed last week, we’re starting to see data telling us that AI is, in fact, creating jobs. Over time, the resulting employment gains are likely to create opportunities for workers and companies to earn and spend, unlocking even more value from the stock market.
Here’s another report that backs this up (and pushes back on the whole “AI job apocalypse” narrative):
Source: Apollo Global Management
The chart above tells us a specific story: Workers moving from one job to another are likely to see their income rise—and significantly. This shows that companies are putting more emphasis on hiring, and are willing to pay for top talent. That’s another clear sign of a strong US economy.
Track 2: Our Bargain “Backdoor” On This Market Run
With all that said, it’s still easy to feel as if we’ve missed the bulk of the market’s upside. But with profits growing, and more money flowing through the economy, more gains are likely. And with a discounted CEF, as mentioned, we can do even better.
That’s because with CEFs we’re getting most of our return in cash, and we’re getting these funds for less than their portfolios are worth.
Consider a CEF called the Liberty All-Star Equity Fund (USA).
With a 10.3% yield, this fund pays nearly 10X what the average S&P 500 index fund does, while its large-cap focus means we get access to many of the same stocks: NVIDIA (NVDA), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), Visa (V) and Charles Schwab (SCHW) are all main holdings, and USA is diversified in a way similar to the S&P 500 itself:
Source: Liberty All-Star Funds
USA takes the returns on these holdings and “converts” them into an income stream for us. It manages that 10.3% payout by linking the dividend to net asset value (NAV, or the value of the fund’s underlying portfolio) and committing to paying out roughly 8% of NAV as dividends every year, in four quarterly installments of 2%.
That does mean the payout floats a bit, but we’re okay with that, since this 8% “NAV peg” has resulted in a payout that’s been pretty consistent over the last three years:
USA Delivers Steady Dividends in Choppy Markets Source: Income Calendar
Moreover, the fund’s strong returns over the last decade—216% on a market-price basis (in purple below) and 187% based on NAV (in orange)—have been more than enough to keep USA’s payout rolling out at a high rate. With the economy’s strong (and improving) prospects, I see that continuing:
USA’s Market Price (and Portfolio) Deliver
That gap between the fund’s own performance and that of its portfolio is unique to CEFs. As you can see at right in the chart above, it’s narrowed lately, setting up the discount opportunity you can see in the chart below:
USA’s Discount Hits COVID-Era Lows
USA now trades at a 10% discount to net asset value (NAV, or the value of its underlying portfolio). That’s far below its 4.2% long-term average and the lowest it’s been since the dark days of COVID. It’s also far too large of a markdown for a large-cap fund that’s performing (and maintaining high dividends) as well as this one is.
Moreover, any gains in the stocks USA holds are likely to compound as the fund’s discount narrows over time.
This leaves us with a fund sporting a big yield, strong performance and a discount unseen since COVID. And that deal comes at a time when the economy is strong and growing. It’s a situation that clearly shows why CEFs are our first stop when we’re hunting for value, no matter what the rest of the market is doing.
These 5 Overlooked Funds Pay Dividends 60 Times a Year, Yield 9.7%
USA’s “floating” dividend is actually unusual among CEFs. Many pay monthly, in fixed, predictable amounts.
Investors in “regular” stocks and ETFs almost never get that luxury!
Nothing in Contrarian Outlook is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained.
Reinvesting dividends: why it could leave you £30,000 better off
Dividend paying companies in your portfolio can provide a reliable income but potentially millions of investors are missing out on thousands of pounds by not reinvesting dividends
By Laura Miller
Dividend paying companies in your portfolio can provide a reliable income but potentially millions of investors are missing out on thousands of pounds by not reinvesting dividends(Image credit: Getty Images)
Reinvesting dividends offers a sure-fire way to boost your returns and increase your chances of outsized gains from your investments over the longer term. But many investors are missing out – new research has suggested they could be leaving nearly £30,000 on the table over the long term.
Dividends are payments made by a company to its shareholders, representing a portion of the company’s profits. They are a way for companies to share their success with investors and can be paid out in cash or additional shares of stock.
Investors keen not to disturb their capital and to keep it growing, often draw down just the dividends, creaming those extra payments off the top of their fund for an income, especially in retirement as part of a pension. Some investment funds are designed for investors to take dividend income this way.
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But while dividend-bearing investments are particularly important for income seekers, long-term academic studies on the returns from UK equities have proven that they overwhelmingly account for most of the real return (after inflation) of the UK stock market.
Jason Hollands, managing director at wealth manager Evelyn Partners, said: “Where dividends are reinvested, rather than taken, this creates a very powerful compounding effect.
“This means investors benefit not just from the returns on the original cash invested, but also the returns on the gains made on the dividends which are ploughed back into further share purchases.”
Impact of not reinvesting dividends
Investors’ dividend decisions – to reinvest or not reinvest – can have a significant impact on long-term returns, analysis from Hargreaves Lansdown found.
Over the past year – March 2025 to February 2026 – 698,000 Hargreaves Lansdown clients received a total of £1.25 billion in dividend income, an average of £1,795 per investor.
Around one in three (31%) are set to automatically reinvest their dividends. In contrast, six in 10 (59%) leave their dividend income as cash on the platform. One in 10 (10%) withdraw it to a nominated bank account (some investors may invest cash balances later).
Hargreaves modelled the outcomes of reinvesting dividends compared with taking them as cash, using a FTSE All-Share tracker. Over longer time periods, the difference in outcomes is stark.
A £10,000 investment over 10 years could grow to around £22,000 if dividends are reinvested. This compares to an approximately £16,000 capital return and a £4,000 dividend payout. Over 20 years, this rises to nearly £34,000 with dividends reinvested, but only around £17,500 in capital return, and a dividend payout of around £7,500.
Emma Wall, chief investment strategist at Hargreaves Lansdown, said younger investors have the most to gain by reinvesting dividends.
“Over 30 years a £10,000 investment could grow to around £74,000 if dividends are reinvested, compared with just £29,000 capital return and £15,000 dividend payout. This means investors could miss out on just shy of £30,000 if the dividend income is kept on account.”
Period
Capital return, with dividend payouts left on account
Total return (dividends reinvested)
Difference in % terms
10 years
98.80%
122.97%
24.5%
20 years
151.85%
239.56%
57.8%
30 years
347.39%
640.49%
84.4%
Source: Hargreaves Lansdown
Reinvesting FTSE 100 dividends
To take another example, over the last forty years to 2025, the FTSE 100 has made a capital return of 391%. This is equal to 205% in real terms – meaning after inflation – as the UK consumer price index inflation rose 186% over this period, by Evelyn Partners’ calculations.
But with UK dividends reinvested the total return is a far more impressive 1,926%.
Hollands said: “While it can be nice to see ad hoc dividend income appear in your bank account, if you don’t need the income now, it is far better to opt for a dividend reinvestment scheme.
“Or, if you are a fund investor, to choose ‘accumulation’ shares classes where any income from the fund portfolio is automatically rolled up rather than distributed.”
Tom Stevenson, investment director at Fidelity International, said a myth has built up that the FTSE 100 has been a serial underperformer: “And when you look only at the headline index level, it’s not hard to see why.”
The UK’s blue-chip index peaked at 6,930 right at the end of the last century, literally on New Year’s Eve 1999. It didn’t get back to that level until February 2015 and then took another nine years to finally make it to 8,000. It’s been a long hard slog.
“But when you factor in the relatively high dividend yield on UK shares, often above 4%, the total return from UK shares starts to look a great deal more interesting,” he pointed out.
Reinvesting dividends meant that the FTSE 100 got back to its 1999 high much more quickly – by February 2006 rather than February 2015. Today the total return index stands more than three times higher than at the peak of the dot.com bubble, said Stevenson.
Missing out on dividend reinvesting
Millions of investors could be missing out on thousands of pounds each, however, by failing to reinvest their dividends, according to Aberdeen Asset Management dividend research.
According to Aberdeen’s findings, 42% of UK investors either said ‘no’ or ‘don’t know’ when asked if they are reinvesting their dividends – equal to 7.5 million investors in the UK.
Analysis by Aberdeen looked at nine major markets over a ten-year period to the end of February 2025 and the impact of reinvesting dividends on returns if an investor had started with a £10,000 lump sum investment.
The biggest difference between total return (reinvesting dividends) versus capital return (not reinvesting dividends) was seen in the Dow Jones Index. It delivered £37,016 on a total return basis over 10 years. This compares to £29,651 on a capital return basis – a difference of £7,365 over 10 years.
Some may be surprised to see the Dow Jones Index lead here given the US is not typically associated with dividends. But that just shows the power of the compounding effect and its impact on the higher total return on the index’s performance.
Because while the S&P 500 delivered the largest total return on £10,00 invested over 10 years – at £41,485 versus £34,699 on a capital return basis – the difference between capital and total return was smaller at £6,786.
The FTSE World Index came third, at £32,002 returns on a total return basis compared to £25,439 on a capital return basis; a difference of £6,563.
The difference was most stark when looking at the AIM market. AIM only delivered positive returns after 10 years, and that was only on a total return basis i.e. when dividends were reinvested, returning £11,335 versus £9,851 when dividends weren’t reinvested.
Interestingly, the FTSE100, often famed for its dividends, came in at number five in Aberdeen’s analysis. Over 10 years it provided a total return of £18,548 versus £12,682 on a capital return basis; a difference of £ 5,866.
Ben Ritchie, head of developed market equities at Aberdeen, said: “Reinvesting dividends is key to long-term returns. While the impact has been seen over the past three and five years, it’s not until ten years that the true magic of compounding really kicks in and delivers, assuming that markets are moving in the right direction – upwards.
“Many income investors rely on their regular dividends to meet their outgoings. But it is compound interest that helps get portfolios to sufficient scale so they can reap the income rewards later on.”
Index
10 year capital return
10 year total return (Dividends Reinvested)
£ difference over 10 years (amount made from total return versus capital return)
Dow Jones
29,651
37,016
7,365
S&P 500
34,699
41,485
6,786
FTSE World
25,439
32,002
6,563
MSCI Europe
15,954
22,037
6,083
FTSE 100
12,682
18,548
5,866
MSCI Emerging Markets
13,588
17,948
4,360
FTSE 250 including investment trusts
11,767
15,446
3,679
FTSE 250 excluding investment trusts
11,254
14,806
3,552
AIM
9,851
11,335
1,484
Source: Bloomberg, 28 February 2025
Picking dividend winners
As well as the powerful effect of dividend reinvestment, it is worth looking out for reliable, consistently dividend paying companies for another reason.
“A company that is able to pay a sustainable and growing dividend that is amply covered by its earnings per share can be regarded as shareholder friendly and able to generate healthy cash flows,” said Hollands.
However, some caution is also required, especially where the level of dividend yield appears “too-good-to-be true”.
“When buying shares with high dividend yields, it is important not to get dazzled by the highest headline yields without digging deeper into how well supported those payouts are by the underlying profits,” Hollands said.
Targeting higher yielding stocks can be a bit of a trap, as a very high yield can be an indication that the market does not believe the dividend payout rate is sustainable and the outlook for the business is poor, so a low share price creates the effect of a high yield.
It is much better to find companies that have the potential to grow their dividends over time, because the underlying business is performing well.
“It’s also worth pointing out that recently many companies have now adopted share buybacks alongside dividends, which can help enhance shareholder returns, so these might be considered alongside dividends,” Hollands said.
The SNOWBALL invests mainly in Investment Trusts because most have built up reserves, to pay their dividends in times of market stress.
Some Investment Trusts pay an enhanced dividend, commonly 6% of NAV form income and capital. These dividends can then be re-invested into the higher part of your Snowball as the underlying shares continue to grow, in time, in value.
The recognised financial advise is to concentrate on the body and leave the tail to luck. Don’t buy anything unless you are prepared to hold for a minimum of 5 years is the mantra.
Good news for those charging for the advice, no complaints for at least 5 years.
When you want to take income from your portfolio, one piece of advice is to buy an annuity.
Canada Life figures show the 65-year-old with a £100,000 pension pot could buy an annuity linked to the retail price index (RPI) that would generate a starting annual income of £3,896. That’s up from £2,195 in the New Year following a 77% spike in rates this year. Oct 22
A huge gamble with your future as the rate could be as above or higher but you have to surrender all your capital so Hobson’s choice.
The next option is to use the 4% rule, you can DYOR using the search button above.
Some people will not trade a dividend re-investment plan as they only concentrate on growing their capital.
If you trade a Snowball, as you never intend to sell any shares as you need the income to live on, the capital figure is of no importance.
A dividend investment plan is the only plan that you write down the yearly outcome and thus a total amount of income you will have when your retire.
You need to major on a ‘secure’ dividend, although no dividend is 100% secure, some dividends are more secure than others.
For those who near to their retirement date may prefer to
move their Snowball to less risky dividends, if they have achieved their plan.
If you have longer to retire you still need some ‘secure’ dividends as a bed rock for your Snowball but could include more higher yielding Investment Trusts and ETF’s. All still subject to the rules for the SNOWBALL
Income funds are a popular choice – how are they changing?
Sunday, May 3, 2026
Eve Maddock-Jones
Funds and Investment Trust Writer
AJ Bell
Related news
Income funds are consistently popular among DIY-retail investors, and even the disruption markets saw during the first three months of the year failed to dampen investor appetite for some of the biggest income funds.
As their name suggests, this type of fund used to generate income for investors, which makes them popular for people like retirees looking to cover regular expenses in the absence of a monthly pay pack. Investors might also use them to cover regular bills or help with school fees.
The UK is a hub within the income space because of its large number of dividend-paying companies. A dividend is what creates the ‘income’ payout for investors. It’s derived from companies opting to pay out some of their profits to shareholders rather than reinvest the cash for growth.
Big US firms such as Apple, Nvidia or Meta do offer dividends but, they tend to be much smaller, ranging from 0.02% to 0.4% yield – this being the financial measure showing how much a company pays out in dividends each year relative to its share price. These firms prioritise reinvesting their profits for growth to create higher stock market returns.
Income funds having to think smarter about how they pay a consistent dividend
While income funds have been a consistently popular buy for retail investors, the sector as has seen a significant change under the bonnet in the past six years.
Prior to 2020, the major dividend paying stocks were well established, allowing the funds buying them to offer fairly consistent income payments to investors.
But when the pandemic and global shut down hit, many firms halted dividend payments for the first time in decades to keep more cash on hand for whatever unknown challenges appeared.
The European Central Bank directly asked banks to cease paying out dividends or buying back shares for around seven months to maintain lending capacity.
The pandemic caused $220 billion of global dividends cuts in 2020, a 12.2% decline with the severe cuts coming from key markets such as the UK and Europe, research by Janus Henderson found.
New research by Peel Hunt found that since the troughs of the Covid-19 pandemic, UK equity dividend payouts have improved significantly “however, the ways in which companies return capital to shareholders have shifted”, as firms prioritise share buybacks to try and bolster their valuations.
The proportion of large UK companies that have bought back at least 1% of their shares over a 12-month period has increased from c.6% in mid-2020 to c.55% at end-2025, outpacing the US, Japan, and Europe. It appears that UK buybacks have peaked, and companies are more focused on growth opportunities and/or balance sheet strength,” Peel Hunt said.
This shift away from dividends for companies has meant that many fund managers will need to broaden the sectors they invest in to keep up their income payments to investors, often looking away from the UK.
Both the JGGI and global Artemis fund mentioned above use their ability to invest in any market to full effect and actually have very little in the UK, between 2-5% of their portfolios.
These are two of the biggest portfolios of this ilk on the market, at £3.1 billion and nearly £6 billion, respectively.
They’re also the best performing portfolios over 10 years across all global and UK income sectors between funds and trusts.
For those that are looking to stick solely to the UK, Law Debenture tops the 10-year performance data, followed by Temple Bar and Man Income.
Kraft Heinz welcomed its new CEO at the start of the year and “reset the strategy” while still offering a yield close to 7%.
But still, among other long-term holdings, dividends were challenged, reflecting Peel Hunt’s broader point that income seekers were having to take a broad view to find opportunities.
You do not need to take high risks with your hard earned.
For those that are looking to stick solely to the UK, Law Debenture tops the 10-year performance data
Become a member of the club, when markets are rising you can take out your profits from your Snowball and re-invest into some higher yielding shares.
When markets are falling or going sideways, re-invest those dividends into your Snowball, where you will get more shares for your money at a higher yield.
Along with fellow members of the club you will be pleased that prices are falling where 90% of non club members will get more worried as each day passes.
Berkshire Hathaway owns approximately 400 million shares of Coca-Cola. With Coca-Cola paying an annual dividend of $2.04 per share, that stake generates roughly:
400,000,000 shares × $2.04 = $816 million per year
That breaks down to about $204 million every quarter flowing from Coca-Cola to Berkshire.
For a single stock position, that level of income is extraordinary. Coca-Cola has effectively become a steady cash-producing asset inside Berkshire’s portfolio, sending more than three-quarters of a billion dollars annually to the conglomerate without requiring Buffett to sell a single share.
These Overlooked Monthly Income Machines Yield Up to 9.9% – And We Can Buy Them on Sale
Brett Owens, Chief Investment Strategist Updated: May 1, 2026
Preferred stocks are a little-known dividend secret. Worth knowing, by the way—they can yield up to 9.9%!
These “forgotten cousins” of common stocks can make a dividend portfolio. Plus, the discounts! Today we can buy a basket with some ingredients fetching as little as 89 cents on the dollar.
A quick refresher on preferreds. When a company needs capital, it typically either sells common stock—the AAPL to our Apple, the JPM to our JPMorgan—or bonds. But there is a third option, and plenty of companies use it: preferred stock.
Like common stock, preferreds give you a sliver of ownership in a company, they can improve in price based on the company’s performance, and they pay dividends. Unlike common stock, preferreds typically don’t enjoy voting rights, the dividend is usually fixed, and it trades around a par value. In fact, these are all bond-like traits, which is why preferreds are often referred to as “hybrids.”
But what really makes preferreds stand out is just how big those dividends are. A company’s preferreds will routinely pay in the mid- to high single digits, which will typically be 2x to 3x what they’re paying on their common shares.
Just look at what a basic preferred exchange-traded fund (ETF) pays compared to the broader market.
Funds in general are a great way to own preferreds for numerous reasons, not the least of which is that they often pay us monthly. But plain-vanilla ETFs have their limitations. They gobble up preferreds with almost no regard to quality or value, which is why we can often do better with human managers at the helm.
We could get that actively managed coverage through mutual funds, but closed-end funds (CEFs) are the superior play. Here’s why:
CEFs’ prices frequently disconnect with the value of their assets, sometimes allowing us to buy a fund for much less than it’s actually worth.
CEFs can take on debt to plow additional assets into their highest-conviction picks, which can supercharge performance and the yields they pay.
CEFs can use options strategies such as selling covered calls to generate even more income than the portfolio would produce on its own.
The result? Yields that blow ETFs and mutual funds out of the water—and translate into a massive yearly salary of $43,000 if we put a $500,000 nest egg into the trio of CEFs I’m about to highlight.
And unlike preferred ETFs, we can buy these 7.6%- to 9.9%- yielding closed-end funds for discounts of between 4% and 11%.
John Hancock Premium Dividend Fund (PDT) Distribution Rate: 7.6%
A great example of the difference the CEF structure makes is the John Hancock Premium Dividend Fund (PDT). Its 7%-plus yield would make it one of the top payers in ETF land, but it’s actually one of the lowest-yielding preferred closed-end funds … because management is playing with a little bit of a handicap.
PDT is a hybrid fund, investing roughly 50% of its assets in preferreds, and the other 50% in plain old common dividend stocks.
The preferred sleeve of the portfolio can hold its own. Its top holdings include preferreds from the likes of Citizens Financial (CFG), Wells Fargo (WFC), and Citigroup (C) that mostly pay in the 6%-7.5% range. The common sleeve? Sure, it includes Verizon (VZ) and a couple of other formidable dividend payers, but most of these companies are throwing off sub-4% distributions.
How does PDT bridge the funding gap? By throwing a lot of extra capital at management’s picks—the fund’s debt leverage currently stands at a thick 34%.
Over the very long term, this willingness to bet big has made itself apparent in two ways:
Much more volatility than a basic portfolio of preferreds.
Returns that not only blow vanilla preferred ETFs out of the water, but are also mighty competitive with even 100% dividend-equity funds.
This Hybrid Portfolio Has a Lot of Horsepower
Despite its run of late, John Hancock Premium Dividend Fund is trading at a wide 11% discount to its net asset value (NAV), meaning we’re effectively buying its preferreds for 89 cents on the dollar. That’s not just cheap on its face—it’s a relative bargain for this monthly payer, too. PDT has, on average, traded almost in line with its NAV over the past five years.
Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund (PTA) Distribution Rate: 8.3%
Most of us have been trained to see “tax-advantaged” and think “municipal bonds.”
As much as I’d like to give Uncle Sam the slip on my preferred payouts, that’s not quite what the Cohen & Steers Tax-Advantaged Preferred Securities and Income Fund (PTA) has to offer. Instead, PTA aims to minimize federal income tax consequences on its dividends by owning preferred stocks that pay qualified dividends—which are taxed at the more favorable long-term capital gains rates—and by adopting more of a buy-and-hold mentality so as not to trigger short-term capital gains. (And when it does pick up short-term capital gains, it’s mindful about offsetting those gains with short-term losses.)
Management isn’t exactly breaking its back to do this. Most preferred stocks pay qualified dividends. And preferreds aren’t exactly day trading fodder, either.
This is a global portfolio of about 300 preferreds, split roughly 50/50 between the U.S. and the rest of the world, mostly developed Europe. Financials, like BNP Paribas (BNPQY) and Royal Bank of Canada (RY), are dominant at almost 75% of assets, which is par for the preferred course. Credit quality is fine if not a little low; about 55% of assets are allocated to investment-grade preferred stocks. Leverage is even higher than PDT, at 35%, helping juice the payout above 8%.
PTA has only been around since 2020 and didn’t exactly charge out of the gate. But a lot of that had to do with timing—many preferred funds took it on the chin through the rate hikes of 2022 and 2023.
Since Its 2023 Bottom, PTA Has More Than Doubled Up the Preferred Standard
Cohen & Steers’ fund is trading at a 7% discount that looks decent in a bubble. However, its five-year average discount is only a hair lower, so it’s technically less expensive than normal, but it’s not a screaming deal.
We can’t get too attached, though. Like with some other CEFs, PTA is a “term” fund that’s scheduled to liquidate on Oct. 27, 2032, though the fund’s board of trustees technically could vote to extend its life by up to two years.
Nuveen Variable Rate Pref & Inc Fund (NPFD) Distribution Rate: 9.9%
The Nuveen Variable Rate Preferred & Income Fund (NPFD), which came to life in 2021, has a similar story. It started trading not long before the Fed’s tightening pounded preferreds, so it looked awful from the start—but it has been in a relative sprint ever since bottoming out in 2023.
Preferred stocks usually pay a fixed dividend, but as this Nuveen fund’s name implies, NPFD is interested in variable-rate preferreds. Sort of.
Most of NPFD’s assets (about 85% right now) are invested in “fixed-to-fixed rate securities,” which step from one rate to another based on a set schedule, not underlying interest rates. Another 9% is dedicated to fixed-to-floating rate securities, which start with a fixed coupon that it pays for a few years before switching to a variable-rate coupon. It even holds a few fixed-rate securities. In all, only about 5% of assets are invested in truly variable-rate preferreds.
The rest of the portfolio details are pretty standard. This is another global preferred fund, at a roughly 60/40 U.S./international blend. About 75% of assets are in investment-grade preferred, so credit quality is good. And the 185-stock portfolio is amplified with 26% debt leverage.
Income investors would be hard-pressed to find a better preferred yield than what NPFD offers—at last check, it was the highest-yielding preferred fund on the market.
A discount to NAV of 4% is modest in the first place, but it’s actually more expensive than its long-term average discounts of almost 9%. So we’re not getting a screaming bargain here—but nearly 10% a month, paid monthly, papers over a lot of sins.
How to Secure Steady Monthly Dividends of Up to 14.9%
If your experience is anything like mine, you’ve been watching your monthly bills climb higher and higher for years—and fast.
Inflation is eating away at Americans’ financial security, which is why people closing in on their nest-egg targets for retirement are suddenly starting to get the jitters.
$1 million to comfortably retire? Yeah, maybe before COVID.
But here’s the thing: You very well may be able to clock out on a realistic amount of money—much less than a million, in fact.
You just can’t do it holding Dow Jones blue chips.
It’s all in the name. These generous stocks and funds average a yield of more than 9% across the board, and some of them pay up to almost 15% a year. That’s enough to live on dividends alone without ever needing to break off a piece of your nest egg to generate cash.
So, retirement on less than a million dollars? Yes. Here’s the math:
A $600,000 nest egg could earn $54,000—in many places in the U.S., that’s enough for a fully paid retirement without even factoring in Social Security!
And let’s say you have managed to stash away a cool million bucks? The 9% Monthly Payer Portfolio would pay you a downright lush $90,000 in dividend income every year.
And you’re not cashing these dividend checks annually. Not quarterly, either.
You’re cashing them every single month.
No dumping money into certain stocks because you’re getting underpaid every third month—just paydays as smooth as when you were collecting a paycheck!
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Summary
In today’s income landscape, selectivity remains critical. High yields can signal risk, but stocks with strong fundamentals prove that higher yields can coexist with discounted valuations.
Higher oil prices can create downside pressure on even the best dividend stocks, as investors price in higher-for-longer interest rates.
However, the underlying cash flow strength, FFO growth, and balance sheet health in these Strong Buy stocks help mitigate risk.
For patient investors, periods of volatility and price weakness may offer attractive entry points, allowing the opportunity to lock in attractive yields ahead of a more normalized macro environment.
I am Steven Cress, Head of Quantitative Strategies at Seeking Alpha. I manage the quant ratings and factor grades on stocks and ETFs in Seeking Alpha Premium. I also lead Alpha Picks, which selects the two most attractive stocks to buy each month, and also determines when to sell them.
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Best Dividend Stocks: Yield + Quality = ‘Sweet Spot’
Investors looking for the best dividend stocks are often challenged to balance higher yield and higher risk. So, finding quality stocks within this space requires identifying a sweet spot where yields are high but risk is not elevated. Broadly speaking, yields much higher than 6% can signal risk around fundamental weakness or declining growth potential. However, certain sectors, such as real estate, can often support yields in the 9-10% range without sacrificing quality. This is where focusing on Strong Quant Buys with attractive Dividend Grades comes into play.
“Quantamental” Analysis Outperforms VIG Over Time
Seeking Alpha
During the last 12 years, Quant’s back-tested strategy has delivered very impressive returns, beating the Vanguard Dividend Appreciation ETF (VIG). Looking ahead, the dividend environment in 2026 remains dependent on Federal Reserve policy and geopolitical uncertainty, which has created volatility in both the fixed-income and high-yield spaces. However, with inflation potentially leveling off and interest rates expected to moderate by year-end, the backdrop for selectively owning high-quality, high-yielding dividend stocks remains attractive. While risk remains in the short term, buying opportunities exist for stocks with solid fundamentals.
How I Chose the Best Dividend Stocks With 6%+ Yields
To select the best dividend stocks to feature in this article, I used the Seeking Alpha Stock Screener and chose the pre-selected Top Quant Dividend Stocks and filtered for Quant Strong Buys. I then selected stocks with forward yields above 6%, high Valuation Factor Grades, and attractive Dividend Grades.
Quant Sector Ranking (as of 04/30/2026): 11 out of 171
Quant Industry Ranking (as of 04/30/2026): 1 out of 11
Sector: Real Estate
Industry: Diversified REITs
Seeking Alpha
Beginning with a small but impressive dividend stock selling at an attractive valuation, Alpine Income Property Trust is a net lease REIT that owns single-tenant retail properties leased to high quality companies under long-term agreements. The company’s portfolio consists of solid retailers, such as Wal-Mart (WMT) and Home Depot (HD), supporting stable and predictable rental income. PINE’s dividend yield tops 6% and is backed by reliable occupancy rates and conservative payout ratios. Despite these strengths, the stock trades at an attractive valuation, which is where we begin the Quant analysis.
Seeking Alpha
PINE’s ‘A-‘ Valuation Factor Grade and top industry rank are well supported by its forward P/FFO valuation of 9.02, which represents more than a 35% discount to the sector median. This signals that the market is pricing more risk for the stock likely due to its small-cap status. However, when we look at Alpine’s forward growth estimates, a different story unfolds, helping to support the company’s attractive Dividend Growth Grade.
Seeking Alpha
For a REIT like Alpine Income, FFO (funds from operations) is a core earnings driver, so its 7.60% Forward FFO Growth, which is more than double the sector median, more than supports PINE’s valuation. Furthermore, this supports AFFO expansion and dividend increases, reinforcing the 6%-plus yield. When interest rates finally stabilize, net lease REITs like PINE could see further growth along with continued attractive yields. The combination of steady cash flows and discounted pricing highlights the appeal of larger, mid-cap REITs with similar attributes.
Quant Sector Ranking (as of 04/30/2026): 9 out of 171
Quant Industry Ranking (as of 04/30/2026): 2 out of 3
Sector: Real Estate
Industry: Other Specialized REITs
Seeking Alpha
EPR Properties is a specialty REIT that invests in experiential real estate, such as movie theaters, amusement parks, and ski resorts. While this niche space was once associated with higher risk, a combination of a resilient consumer and EPR’s portfolio diversification and consistent rent collection has restored investor confidence. The company’s 6.6% dividend yield is supported by strong cash and tenant health. Meanwhile, its valuation and dividend growth potential remain attractive.
Seeking Alpha
Starting with EPR’s 10.46 forward P/FFO, this valuation metric suggests a discount of about 25% to the sector median. With growth improving and strong (its ‘A-‘ Growth Factor Grade has jumped up from a ‘C’ in three months), EPR appears ready to support its attractive 6.6% yield. This helps explain the REIT’s sector-leading Dividend Growth metrics.
Seeking Alpha
EPR’s forward FFO Growth of 4.66% is significantly ahead of sector peers, which weigh in at an average of 2.91, and its Dividend Growth Rate – CAGR – over the past five years is more than 10x the sector. With consumer spending remaining resilient through recent geopolitical concerns and the potential for normalization later in the year, EPR offers a unique blend of income and recovery driven upside. That combination leads to a smaller-cap real estate company that operates in a different space but with similarly compelling valuation and yield profiles.
Quant Sector Ranking (as of 04/30/2026): 5 out of 171
Quant Industry Ranking (as of 04/30/2026): 1 out of 3
Sector: Real Estate
Industry: Diversified Real Estate Activities
Seeking Alpha
The RMR Group is not a REIT but an alternative asset management company specializing in real estate and operating companies. So, rather than owning and operating the real estate directly, it earns management fees tied to assets that are owned by REITs. This asset light model generates strong margins and supports its high dividend, offering investors exposure to real estate without the downsides of direct property ownership. RMR has demonstrated consistent fee collection and cash flow stability. This status leads to dividend safety and is complemented by an attractive valuation.
Seeking Alpha
RMR’s forward P/E of 23.62 offers more than a 23% discount to the sector median, and its 4-Year Average Dividend Yield of 10.14% provides historical evidence of its ability to maintain its high dividend. While its ‘C-‘ Dividend Growth Score indicates average growth compared to sector peers, the real estate company’s yield is already high, and its Dividend Safety Score is also attractive.
Seeking Alpha
According to our back-testing, companies with a Dividend Safety Score of at least ‘A-‘ or better have averted a dividend cut 99% of the time. RMR receives a solid ‘A’ grade for dividend safety, which is supported by an FFO Interest Coverage Ratio of 6.36, which is more than double the sector median. This suggests RMR can easily meet its debt obligations, which is a strong signal that its dividend is reinforced by healthy underlying cash flows. For income investors, this presents an opportunity to capture both yield and valuation upside. Taken together, these ideas highlight a broader theme of buying opportunities across the real estate sector.
Conclusion: High Yields and Quality in Best Dividend Stocks
In today’s income landscape, selectivity remains critical. High yields can signal risk, but stocks with strong fundamentals like PINE, EPR, and RMR demonstrate that higher yields can coexist with discounted valuations and attractive Quant Dividend Scores. A near-term risk worthy of consideration is that higher oil prices can create downside pressure on even the best dividend stocks as investors price in higher-for-longer interest rates. However, the underlying cash flow strength, FFO growth, and balance sheet health in these Strong Buy stocks help mitigate risk. For patient investors, periods of volatility and price weakness may offer attractive entry points, allowing the opportunity to lock in attractive yields ahead of a more normalized macro environment.
