Investment Trust Dividends
Thursday 8 January
Baillie Gifford European Growth Trust PLC ex-dividend date
CT UK High Income Trust PLC ex-dividend date
Schroder European Real Estate Investment Trust PLC ex-dividend date
Scottish Oriental Smaller Companies Trust PLC ex-dividend date
Workspace Group PLC ex-dividend date
The Oak Bloke
Jan 05, 2026
Belatedly picking BSIF for the picks for 26 a reader asked but why not NESF?
Oh ho. That old chestnut. Again. I compared NESF vs SEIT in 2025 and came out strongly in favour of SEIT. Would BSIF beat NESF? And while we are at it, what about BSIF vs SEIT?
Since I covered NESF in “is it crackin’” back in June it’s dropped -30% from 70p to 50p. Is that an opportunity too? Cheap enough to change one’s mind?
Let’s find out which ones are tidy.
Generally I do feel the sector is over sold. This is an interesting chart I stumbled upon over at Topdowncharts.com that validates that view. How can that be happening if Power Curves are leading Renewables towards perpetual prices of doom? Of course Global Equities aren’t UK equities and we do have Ed Milli to contend with.
Worldwide electricity generation is growing by 100s of TWhs and Solar is leading the, ah, charge. Why is so much investment going into an asset whose income is in decline? Something doesn’t add up, and it’s my contention that it’s the power curves.
NESF: I’m going to compare the 1H26 at NESF vs 50% of the FY25 results at BSIF to take a view. I’m a bit shocked. BSIF comes back with a -£5.25m deficit post dividends and after imputing an adjusted net profit, while NESF shows +£8m adjusted FCF.
This is where I am ignoring the power curve nonsense of FV gains/losses and instead assigning a Depreciation number in relation to the MW Capacity of generation. It’s crude but we do know these panels depreciate over 30 years and valuing a business this way seems much more sensible than the FV judgments obscured and obsfuscated. Depreciation as a guide which approximately tallies with 1/30th of the estimated capex cost. Remember it is also considering repairs and upgrades. NESF considers this a form of “distribution” and in a way it is – the NAV increases through investment but if the investment is just to stand still – well that’s a P&L cost – whether you call it depreciation, repairs or maintenance. This was one of the other forms of obfuscation that irritated me with how NESF portray their accounts.
On the face of it NESF is the better investment. But then I start to ponder. NESF’s interim period is March to September. BSIF is 50% from Jan to Dec. Hmm. The sunshine breaks through and I realise I need to think about the seasons.
Of course the longer days of summer months are going to deliver a stronger result for Solar during April to September. On a frosty day like today that truth seems truer than ever. Duhhh.
I find the EBITDA split is 75%/25% at NESF.
So if I increase the NESF EBITDA by 33%, and double the BSIF (remember I halved it before), and of course double the ITDA amounts (these are not seasonal), then we see quite a different result.
At current levels of dividends both trusts are “eating themselves” after you factor in depreciation, although on a cash basis NESF delivers £18.20m vs £42.4m at BSIF – post dividends.
In relation to the marcap you are in the long run much better off buying BSIF unless NESF falls to below 30p a share. That’s because NESF doesn’t appear to be keeping enough money to maintain its portfolio. Bear in mind these numbers are post dividend and NESF pays a higher dividend (as a percentage)
If we add back the dividend the difference between NESF and BSIF reduces to a much smaller difference, although compared to the NAV or the current share price BSIF does look the better pick generating 23.9p per £1 invested vs 23.1p.
But there are further reasons to choose BSIF.
NESF has a “sister co”. It has a first refusal but owns no development pipeline of its own. It has carried out no further disposals in 1H26.
BSIF actually owns the pipeline and can sell these to its sister co the JV which it owns 25% of.
Some other metrics that catch my eye include BSIF has much better debt metrics cost in terms of average cost plus in terms of gearing. As debt gets run down the difference between NESF and BSIF would get more acute because BSIF cost of capital is 1% lower and it has less absolute debt and with no cliff edge (middle of Norfolk remember).
NESF it is fair to say has a slightly higher discount to its NAV: 43.4% vs 42%
From an income generation point of view SEIT exceeds BSIF on earnings as a proportion to its market cap and the cash flow relative to debt.
SEIT also exceeds BSIF from an energy generation/conservation per £ of market cap and enterprise value too. But BSIF exceeds NESF, by quite some way.
BSIF stands up well to NESF – if you compare it season for season.
BSIF also has the advantage of being sold – potentially – in 2026 as a going concern. That’s not the case for either NESF or SEIT (although some selected disposals are planned for SEIT and Saba have been buying SEIT and a continuation vote is planned)
BSIF as part of the picks for 26 stands up to the scrutiny of comparison with its peers. Yes the headline yield number is slightly lower but that’s because NESF continues to eat its own tail in my opinion. A high yield can be too high.
Regards
The Oak Bloke
Disclaimers:
This is not advice – you make your own investment decisions.
Discover three top UK and US dividend stocks with yields of up to 7.1% — and why Royston Wild believes they might be too cheap for investors to ignore.
Posted by Royston Wild
Published 4 January
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
2025 proved to be a spectacular year for global stock markets. Unfortunately, this made things more challenging for investors seeking a large passive income from dividend-paying stocks.
The MSCI All Country World Index — which tracks large- and mid-cap shares in developed and emerging markets — has delivered its best year since before the Covid-19 pandemic. As a consequence, dividend yields have toppled across the globe.
Yields fall when share prices rise, meaning share pickers receive lower income on their investment. But this doesn’t make it impossible to find quality high-yield shares. Indeed, stock markets remain packed with brilliant bargains, and not just in terms of future dividends.
Realty Income, Aberdeen Asian Income Fund and Verizon Communications (NYSE:VZ.) are just three top stocks deserving consideration right now. Want to know what I think makes them so great?
Realty Income’s a US-listed real estate investment trust (REIT). As such, it offers dividend visibility that few other shares can. Under sector rules, these trusts must pay at least 90% of annual rental earnings out to shareholders.
This doesn’t necessarily mean companies like this are watertight income stocks. Dividends remain linked to profits, which can dive when occupancy levels drop and/or rent collection issues spring up.
But Realty Income’s huge portfolio of 15,000-plus properties helps spread this risk. Its diversified approach has delivered regular annual dividend growth since the mid-1990s.
Today, the REIT’s forward dividend yield’s a huge 5.9%. And its forward price-to-earnings growth (PEG) ratio’s 0.9, illustrating excellent value.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.
The Aberdeen Asian Income Fund is a cheap and easy way to harness the dividend potential of emerging market shares. An investment here provides one with instant exposure to 57 different dividend-paying stocks.
Okay, Asian shares can be more volatile than those in the UK and US. But it can also lead to enormous long-term returns as rapid economic growth drives company profits.
Aberdeen Asian Income’s proved an excellent dividend share down the years. Annual payouts have risen for 22 years on the spin. For 2026, its dividend yield is a tasty 7.1%. Right now, the trust also trades at a 7% discount to its net asset value (NAV) per share.
Verizon is in many ways one of the best US dividend shares. It’s not perfect, as high infrastructure spending and competitive pressures can impact earnings and by shareholder payouts. But there’s also a lot to like here.
Telecoms remains one of the most defensive industries out there, and especially in our increasingly digital age. This gives the company recurring subscription revenues and stable cash flows it can use to fund large and reliable dividends.
Verizon’s also raised annual dividends every year for almost two decades. Predictions of a further rise in 2026 means its shares yield an enormous 6.9%.
With the company undergoing significant restructuring under new CEO Dan Schulman, it could deliver increasingly tantalising dividends and strong capital gains looking ahead. Today, its shares trade on a low forward price-to-earnings (P/E) ratio of 8.4 times.
How large a second income could putting £9k into the stock market really deliver in practice? Christopher Ruane explains some of the variables.
Posted by Christopher Ruane
Published 4 January
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services.
At this time of year, the idea of having a second income to fall back on can certainly seem attractive!
A second income does not necessarily mean that someone is juggling multiple jobs. There are different ways a person can aim to earn an additional income. One is buying up a bunch of shares in companies that will hopefully pump out dividends in future.
I understand that when someone decides a second income could come in handy, they may be thinking of how handy it would come in right now.
But taking a long-term approach can mean setting up a second income in future – and letting time work to your advantage between now and then.
As an example, say someone has a spare £9k and invests it in a diversified portfolio of shares that earn an average dividend yield of 7%.
After 25 years, that portfolio ought to have grown to a size where a 7% dividend yield would produce around £3,419 of passive income each year.
As a starting point, someone needs a practical way to invest. So one step they could take this week – indeed, right now before the year gets any older – would be choose a share dealing account, Stocks and Shares ISA or trading app.
It also helps for someone to set an investing strategy that plays to their strengths , reflects their investing objectives and aims to strike a suitable balance between potential risk and reward.
For example, a 7% yield is well above the current FTSE 100 yield of 3.1%. But I do not think it necessarily requires investing in little-known, risky companies (which is certainly not my cup of tea).
I reckon an investor can build a high-yield portfolio from quality blue-chip dividend shares in proven companies.
As an example, one share I think investors should consider is FTSE 100 financial services firm Legal & General (LSE: LGEN).
Despite yielding 8.3%, I already know that the company aims to grow its dividend per share in 2026. That is part of a longer-term strategy of annual dividend growth.
Can it deliver? After all, no dividend is ever guaranteed. Longstanding Legal & General shareholders discovered that during the 2008 financial crisis, when the company cut its payout.
Any big enough future financial crisis that leads to policyholders pulling out funds brings a similar risk. I also think this year’s expected sale of a large US protection business will leave a hole in the company’s revenue streams, although it will also bring in a large chunk of cash.
But I like Legal & General because it has shown it prioritises shareholder returns, has a strong brand, and uses a proven business model. The retirement market on which it is focused is large and resilient.
The problem with retirement index investing via the 4% rule, in which you liquidate 4% of your net worth at retirement every year and adjust it annually for inflation, is that it means that you are forcing yourself to sell an inordinately high number of shares during down markets. Additionally, if your portfolio suffers a major market downturn early in retirement followed by a lost decade, even if the remaining years are very strong in terms of total returns leading to an average long-term total return of 10%, you may end up depleting your portfolio so much in the early going that it is unable to climb out of that hole, and your retirement dream becomes shattered.
If, instead, you are living off of dividend income, you do not have to sell your shares early on. As long as your dividends remain stable and growing in line with inflation over time, you will never have to sell a single share and can live off of your portfolio indefinitely, regardless of how market volatility behaves.
Brett Owens, Chief Investment Strategist
Updated: December 30, 2025
Here’s one thing I can say for sure about 2026: This year, we’ll be grateful we’re NOT sitting on “America’s ticker”—my name for the SPDR S&P 500 ETF Trust (SPY).
I call SPY that because pretty well everyone owns it. But its 1% yield makes it more likely that holders will be forced to sell low in the next pullback, if they’re leaning on it to pay the bills.
Not us! We’ll be pocketing the 8%+ cash payouts from the portfolio of my Contrarian Income Report service. So while SPY holders face the next pullback with dread, we’ll be chugging along with our usual “dividends and chill” approach.
When a storm hits, we simply wait for our next big dividend payment to roll in. (And we don’t have to wait long—many of our divvies are paid monthly.)
Today I want to zero in on one attractive 13.4% (!) payer from our portfolio. Then I’ll show you a smart, simple way to forecast that massive dividend (and indeed any payout) with ease.
This 13.4% Payer Loves This “Bearish” Bull Market
We love FS Credit Opportunities (FSCO) for a lot of reasons, but its sky-high—and growing—dividend is right up there. FSCO yields a mammoth 13.4% today (more on that in a second).
Small businesses—the main drivers of US economic growth—love BDCs, too, because they loan money to these firms. BDCs are a godsend for these mom-and-pop shops, who often struggle to get the capital they need from stingy banks.
Most BDC managers sit in their cozy offices, wait for a private-equity sponsor to call, then write a check for a safe but low-paying loan.
Not FSCO. Portfolio manager Andrew Beckman buys distressed loans for dimes—even pennies—on the dollar. His chops in this arena drive the stock’s growing 13.4% payout.
FSCO: A True Dividend “Unicorn”
Source: Income Calendar
Beckman is the industry’s “credit surgeon.” Forget the safe loan! He wants the patient who’s bleeding out on the table because he can stitch them up—and charge a fortune for doing so.
Before FSCO, he spent the core of his career at Goldman Sachs (GS), in their legendary Special Situations Group. These “credit commandos” thrived buying depressed assets in the 2008/2009 crisis.
FSCO is a BDC in a closed-end fund (CEF) wrapper. As a CEF, it can (and does!) trade at different levels in relation to its value. Today, it trades at a 14.7% discount to NAV because slower jobs numbers are sparking recession worries. That means we’re getting FSCO’s expertly run loan portfolio for just 85 cents on the dollar.
Yes, hiring is slow, but that’s because companies are implementing AI to boost efficiency. And small businesses are the No. 1 users of this tech.
Meantime, the Atlanta Fed’s GDPNow estimate shows that the US economy is still solidly in growth mode: a strong 3.5% rate, to be exact.
The disconnect between investors’ mood and strong growth is our opening to grab FSCO, and its 13.4% payout, at a bargain.
Buy FSCO, Then Do This to Forecast Your Dividends for Years
High, and rising, dividends like this one really are unicorns, and I see a diversified portfolio of them as a far better option than ETFs like SPY.
But the key to getting peace of mind (and dodging the urge to sell when markets fall out of bed) is knowing exactly when your next payout is coming. Truth is, there aren’t many tools out there that do this. And even fewer that do it well.
I know because I’ve tried a lot of dividend-projection tools and haven’t found any I loved (or even liked much). So our IT team created our own. It’s called Income Calendar, and it quickly and easily ensures your dividends are in your account before your bills come out.
The best way to show you how it works is to demo it for you. So let’s go to Income Calendar and plug in monthly paying FSCO, plus a couple other Contrarian Income Report holdings that pay quarterly, so we can see how IC navigates different payout frequencies.
Those would be gas-pipeline operator Antero Midstream (AM), which benefits from the Trump administration’s emphasis on fossil fuels over renewables—and Ares Capital (ARCC), another BDC set to write more loans as small biz boosts its productivity.
Let’s invest an imaginary $100,000 in each. Income Calendar tells us, immediately, what we can expect in terms of dividends every month from our 3-buy “mini-portfolio”:
As you can see, just these three buys deliver dividends ranging from $1,093.55 in a month up to $3,458.99, and a total of $27,617.11 on the year, on just $300K invested.
That’s a rich 9.3% yield. Sweet! (Bear in mind, too, that to be overly conservative, we don’t project dividend growth, so our “real” payouts could end up higher.)
You can get breakdowns by stock, plus a month-by-month calendar showing key dates for every one of your holdings. Check it out. Here’s what our three-buy portfolio shows us for September 2026, one of our highest-paying months:
We can see our projected pay dates, as well as ex-dividend dates (the dates before which we need to be “in” the stock to get the next payout). We also get a heads-up on things like market holidays. We even know when our stocks report earnings—though there are none of these for our trio in September.
With a dividend re-investment plan you fail by the month or each quarter.
By Keith Speights – Updated May 31, 2025
As always, The Motley Fool cannot and does not provide personalized investing or financial advice. This information is for informational and educational purposes only and is not a substitute for professional financial advice. Always seek the guidance of a qualified financial advisor for any questions regarding your personal financial situation.
Imagine doing the things you love without worrying about money. That’s the dream for many Americans. Some achieve this goal in their 60s when they retire. Others can do it even earlier.
One of the top ways people fulfill this dream is by investing in dividend stocks. But can you rely on dividends for life after quitting your job?
Image source: Getty Images.
The concept of living off dividends for life is a simple one. First, you invest a sum of money in stocks that pay dividends. Second, you use the dividend income to cover your expenses after you quit working. Easy-peasy? Not necessarily.
First, you’ll need a substantial amount of money to invest. Exactly how much depends on the dividend yield the stocks you invest in pay. The dividend yield is the annual dividends per share paid by a company divided by its current share price.
Divide the amount of annual income you require by the dividend yield you expect to make to calculate how much money you’ll need to invest. For example, let’s say you want to make $100,000 per year. If you receive a dividend yield of 3%, you’ll need to invest around $3.33 million ($100,000 divided by 3%) to get that amount. That amount is attainable for some, but it could be a stretch for many people.
If you want to retire on dividend income but don’t have $3.33 million to invest, you have two options. First, you could try to get a higher dividend yield. A dividend yield of 5%, for example, would require only $2 million invested to make $100,000 per year. Second, you could try to live on less money. If you could make ends meet on $70,000, you’d need $2.33 million to invest with a 3% dividend yield.
There are some risks to keep in mind, though. One biggie is that the dividend yield you receive in the future might not be as high as the yield you get at first.
Some companies cut their dividend payments over time. A few even suspend or eliminate their dividend programs. For example, going into 2020, The Walt Disney Company had paid a dividend for over 40 years. As a result of the COVID-19 pandemic, the company suspended its dividend program for three years.
It’s also possible that a company that has reliably paid dividends for a long time will be acquired, resulting in the elimination of its dividend. Walgreens Boots Alliance is a great case in point. The pharmacy giant had a streak of 47 consecutive years of dividend increases as of late 2023. However, Walgreens cut its dividend in January 2024. It’s now in the process of being acquired and taken private.
Inflation is arguably an even greater threat. It can erode the buying power of your dividend income even if none of the stocks you own reduce or suspend their dividends.
The good news is that there are potential strategies you can follow to minimize these risks. Probably the most important one is to diversify your investments. If you only own five stocks, and one suspends its dividend, your income would be reduced by 20% assuming they are all paying the same amount. But if you own 25 stocks and it happens, your income would be only 4% lower.
Investing in dividend-focused exchange-traded funds (ETFs) is a great way to diversify. For example, the Schwab U.S. Dividend Equity ETF (SCHD+1.09%) owns 103 dividend stocks. Its top holdings include Coca-Cola, Verizon Communications, Altria Group, Cisco Systems, and Lockheed Martin.
The Schwab U.S. Dividend Equity ETF currently offers a dividend yield of around 4%. This ETF has also delivered an average annual return of roughly 12% since its inception in October 2011.
If you want diversification and an even higher yield, closed-end funds (CEFs) could be an alternative. One CEF that I own is the Cohen & Steers Infrastructure Fund . This fund owns 259 stocks. Its distribution yield is a lofty 7.2%. The CEF’s average annual total return since its inception in March 2004 is 9.5%.
There are two key things to note about closed-end funds, though. Many of them use leverage (borrowing), which increases their risk. The Cohen & Steers Infrastructure Fund’s leverage ratio is 28.5%. Their fees are also typically higher than ETFs.
How can you minimize inflation risk ? Look at the history of dividend increases for the companies and funds you’re considering. Just because a company or fund has increased its dividend consistently at an average rate higher than inflation doesn’t mean it will always do so. However, investing in stocks and funds with strong track records of dividend hikes could increase the odds that your annual dividend income at least keeps up with inflation.
Finally, re-evaluate your holdings regularly. The stocks and funds that are great picks today might not be such great picks a few years from now. Many Americans can quit their jobs and rely on dividends for life. But the sources of those dividends could need to change from time to time.
Most peoples Snowball will not be valued in millions, so concentrate your Snowball on the tail not the body.
The blog’s plan is to have a Snowball that pays a yield of around 18% on seed capital of 100k, with no funds added to the Snowball. The longer you have to re-invest your dividends the higher the yield should be.
Warren Buffett just collected another $204 million from Coca-Cola — a reminder that some of the most powerful returns on Wall Street come from patience, dividends, and owning the right business for decades.
Here’s how that payout breaks down, why Coca-Cola keeps funding Berkshire’s war chest, and what this kind of compounding looks like in real dollars.
Coca-Cola has been one of Warren Buffett’s signature bets since the late 1980s, and it’s still paying like clockwork.
Berkshire Hathaway owns 400 million shares, and Coca-Cola’s $0.51 quarterly dividend just delivered a $204 million payout. Sometimes the biggest wins aren’t dramatic. They’re automatic.
Coca-Cola dividends now bring Berkshire over $800 million a year, far beyond the original $1.3 billion cost. Coca-Cola may have its “secret” headlines, but Buffett only cares about one secret: the dividend arriving every quarter.
Why Coca-Cola Still Matters
Coca-Cola isn’t just a dividend machine, it’s still a modern profit engine.
With a market cap around $289 billion and gross margins above 61%, the company keeps doing what it does best: defend pricing power, stay everywhere, and find small ways to sell more. Mini cans. Convenience-store pushes. Product tweaks that look boring up close, but scale fast when you’re global.
That durability is why some Wall Street analysts still see upside, with price targets reaching $80. This implies that Coca-Cola is still being priced as a cash machine with staying power. And for Berkshire, that’s the whole point. No hype. No chasing trends. Just owning a durable cash machine, year after year, and letting dividends and compounding do the heavy lifting.
This is where most investors get caught. They chase the hot stock, the pop, the quick win, and end up trading emotions instead of building wealth.
Buffett plays a different game. He doesn’t need to react to every headline. He owns businesses that pay him, then lets time and dividends do the work.
The difference isn’t access to information. It’s behavior, and the traders who last tend to rely on rules, not emotion, like stop-loss and take-profit orders
Why This Dividend Story Matters
That $204 million payout is more than a headline number. It’s what long-term investing looks like when the business is durable and the cash flow is real.
While plenty of investors chase the next spike, Buffett’s Coca-Cola stake shows the quieter path: own a high-quality company, let the dividend stack up, and give compounding time to do its job. You don’t need to love soda to take the point, you just need to respect what consistent payouts can build over decades.
3 Trusts that paid buying dividends around 5%, with a simple strategy of re-investing the dividends back into the Trust.
Current yields.
LWDB 3.15%
CTY 3.75%
AEI 5.69%
The earned dividends could now be re-invested into a money market account or a gilt to build a rainy day fund to buy some bargains when the market next sells off.
Dividends can be more reliable than share prices as they’re driven by
the companies performance itself and not by the whim of investors.
As part of a total return / reinvestment strategy, this income could be
reinvested into income assets or back into the equity market
depending on the relative valuations.
The emotional benefits of dividend re-investment.
In fact, with this investment strategy you can actually welcome falling share prices.
There seems to be some perverse human characteristic that likes to make easy things difficult.
WB
Jan. 02, 2026
Leo Nelissen
It’s time to address one of the most asked questions I’ve gotten in recent weeks. I even think it’s the most-asked question if I were to analyze the comment sections of all of my recent articles.
That question is what a “Leo retirement portfolio” would look like.
I really like this question. Although I spend a lot of time discussing higher-yielding stocks, I never discuss them from my point of view, as I do not run a retirement portfolio. That’s because of two reasons that are somewhat related:
That said, there are reasons why I cover higher-yielding stocks. On top of my belief that value stocks (this group includes many higher-yielding stocks) are very attractive for the current macro environment, I know that many of my readers are retired and/or interested in companies that pay a decent income.
Based on that context, I’m not using this as an opportunity to randomly give you some high-yield picks that I like. As you specifically asked for a “Leo retirement portfolio,” I spent the past few days thinking about an approach that would fit my strategy and my goals, all based on my real life.
So, as we have a lot to discuss, let’s get right to it!
On Feb. 21, 2025, I wrote an article titled “If I Had To Retire Today, These Are The Dividend Stocks I’d Bet My Future On.” In that article, we discussed some of the fundamentals of retirement.
This includes the question about what amount we need to retire. I used the quote below, which is from a Fidelity article:
Our savings factors are based on the assumption that a person saves 15% of their income annually beginning at age 25 (which includes any employer match), invests more than 50% on average of their savings in stocks over their lifetime, retires at age 67, and plans to maintain their preretirement lifestyle in retirement. – Fidelity
Technically speaking, if you follow the rules above, you’ll be able to retire comfortably at age 67, as you will have saved 10x your pre-retirement income. Again, all else being equal, that should be the goal:
There are unfortunately some problems:
The first client we ever worked for made so much money in a single year as a hedge fund manager; he could have allowed my entire neighborhood to retire early. Meanwhile, other people I know invest $50 each week. That’s their limit.
We’re all different, yet we will all be dependent on retirement income one day.
This also goes for our income and expenses. If you live in West Virginia on a good salary, it may be much easier to retire than for someone who makes an average income in a place like Southern California.
Using the income inequality map below, we see that the odds that someone on a relatively low salary has to deal with somewhat elevated costs are the highest in places like New York, California, Louisiana, Illinois, and even Texas and Florida to some extent. But then again, I’m painting with a broad brush.
My personal situation is a bit more complex.
I don’t work a 9-5. Since 2020, I have basically been on 24/7, which included various jobs (often with the same team) like advising a hedge fund and providing third-party macro and geopolitical intelligence. Meanwhile, I have, almost without skipping a beat, published at least one Seeking Alpha article a day for more than three years straight.
I’m not complaining. I love my job, which is why I decided to make it even more complex this year, as I am moving to Albania, picking up where I left off as a hedge fund advisor (later in 2026), and I launched a new research platform with one of my closest friends.
And, obviously, I’m not changing anything about what I do here on Seeking Alpha.
There are a few reasons I’m telling you all of this:
I’m basically forced to make as much money as possible. So far, that has worked out quite well, as I have been blessed with more-than-decent income. It allowed me to invest in Albanian real estate, and, even more importantly, it also allowed me to build a retirement game plan.
See, while I may not be running a retirement account, I promise you I can turn my portfolio immediately into an income portfolio if, for some reason, I’m forced to do so.
For these plans, I’m using what I have called the 5% Rule in prior articles (like this one). Basically, I’m saying that we should aim for a retirement that comfortably covers our expenses if we get a 5% to 6% yield. This has a number of benefits, including that it keeps many (younger) investors from focusing too much on income.
Here’s what I wrote in the article I just mentioned:
So, what really is the 5% Rule, you may ask?
For starters, if I had to summarize this strategy, it would be something like this: I am convinced that 5% is the sweet spot between buying income and dividend growth without taking on the risks of buying a “sucker yield.”
Or to put it differently, I believe I can build fantastic dividend income portfolios picking from stocks yielding close to 5%.
But even more important, it keeps us from chasing unsustainable dividends.
If there’s one thing I hate, it’s to see people buy into risky, high-yielding stocks just to end up with both capital losses and dividend cuts.
Especially in my situation, there’s no room for those kinds of risks.
Now, let’s look into the portfolio.
One flaw of my prior articles, which focused on stocks I would buy if I were to retire, is that this article only discussed a few picks, not an entire portfolio.
I’m changing that in this article, as I already mentioned.
Here’s my model portfolio:
| Company | Reason (“The Why”) | Weighting | Yield |
| GROUP 1: BIG YIELD | |||
| Blue Owl Capital Corp. (OBDC) | Income optimization | 7.00% | 11.60% |
| Capital Southwest (CSWC) | Compounder BDC | 7.00% | 10.70% |
| Ares Capital Corp. (ARCC) | Blue Chip BDC | 6.00% | 9.50% |
| GROUP 2: THE MIX | |||
| VICI Properties (VICI) | Safe NNN REIT | 6.00% | 6.40% |
| Main Street Capital (MAIN) | Diversified BDC | 5.00% | 6.00% |
| Realty Income (O) | Bond proxy | 5.00% | 5.70% |
| Enbridge (ENB) | Utility midstream | 5.00% | 5.70% |
| ONEOK (OKE) | Gas connector | 5.00% | 5.70% |
| Canadian Natural (CNQ) | Upstream energy income | 5.00% | 5.10% |
| Antero Midstream (AM) | Elevated FCF and safety | 5.00% | 5.10% |
| Chevron (CVX) | Reliable energy income | 4.00% | 4.60% |
| TC Energy (TRP) | Gas-focused midstream | 4.00% | 4.40% |
| Agree Realty (ADC) | “Superior” allocator REIT | 4.00% | 4.30% |
| Kinder Morgan (KMI) | Gas network | 4.00% | 4.30% |
| GROUP 3: GROWTH | |||
| Blackstone (BX) | Alternative assets | 5.00% | 3.30% |
| Prologis (PLD) | Next-gen warehouses | 5.00% | 3.20% |
| Lockheed Martin (LMT) | Defense income growth | 5.00% | 2.90% |
| Ares Management (ARES) | Credit growth | 5.00% | 2.70% |
| Union Pacific (UNP) | Massive moat | 4.00% | 2.40% |
| RTX Corp. (RTX) | Secular aerospace growth | 4.00% | 1.50% |
| Total | 100.00% | 5.60% |
Now, let me walk you through it.
Group 1 has the big yields. These basically supercharge my portfolio’s income without the need to trade derivatives, like selling covered calls. Or, to put it differently, without these stocks, there’s no way I can buy growth-focused stocks without failing to reach my target of roughly 5.5% pre-tax income.
After all, even when I retire, I still want to own a few growth-focused dividend stocks, as compounding wealth should still matter, even in retirement.
In my case, I went with two of my favorite business development companies, which are basically entities that lend capital to small- and mid-cap borrowers.
I went with Blue Owl and Capital Southwest as heavy hitters here. They have double-digit yields. Blue Owl is externally managed, while Capital Southwest is internally managed by a team that has done a tremendous job beating the average BDC in recent years, as the chart below shows.
Ares Capital Corp. is one of my favorites as well, as I consider Ares Management (ARES), the manager of ARCC, to be the best private credit growth company in the world. They have excellent management and do a great job managing risks. Someone once called it the “JPMorgan of private credit.” I really like that description.
In future articles, I’ll elaborate on ARES.
OBDC is a bit riskier, yet I like its valuation. To me, OBDC is one of the few BDCs trading below its book value that I expect to rebound substantially.
With that said, the lending business is cyclical. Investing roughly a fifth of the portfolio in these stocks is a somewhat risky move. However, it fits my risk profile, and I trust these BDCs to get the job done.
Then there’s the mixed category, which accounts for roughly half of the portfolio.
And, if you have been a follower of mine for more than a few days, you may not be surprised that I went with REITs and energy, two of my favorite themes for income in 2026 and to buy dividends in general.
It includes Realty Income and VICI Properties. Technically, both are way too boring for my taste, as they have low-to-mid-single-digit annual growth and basic inflation protection (escalators usually capped at 2-3%).
However, for income, I happily own them. Both have net lease structures, where tenants are responsible for insurance, taxes, and maintenance expenses. In the case of Realty Income, which pays monthly dividends, it’s paid by stellar retailers and some industrial/leisure companies (see below).
VICI generates half of its rent from the Las Vegas Strip. It’s not ideal for them right now, given that Las Vegas has some issues, but VICI benefits from owning some of the best assets on the Las Vegas Strip, including the MGM Grand, Mandalay Bay, and Caesars Palace. In November, it also bought the STRAT, which it got in a major sale-leaseback deal to expand its footprint.
These assets are all protected by master leases, which means even their biggest tenants cannot selectively decide to stop renting certain assets. And even if they could, the major assets are too important for these companies.
On top of that, I went with Agree Realty. It has a lower yield than Realty Income, yet a more favorable spread between investment yields and its weighted average cost of capital. This is mainly because of its size benefit vs. Realty Income, as it can be extremely selective in its deals and use its ultra-safe balance sheet to get attractive deals on debt and equity.
Then, I would add a bunch of midstream companies, including Enbridge, which basically combines midstream and regulated utility exposure under one roof; TC Energy, which is a pure-play natural gas midstream company with some nuclear energy exposure; Antero Midstream, which is a much smaller player in the Appalachia region, where it generates a free cash flow yield of roughly 10%; and ONEOK as well as Kinder Morgan, which cover the fast-growing natural gas and natural gas liquids industries in areas like the Permian.
All of these companies are C-Corps, which means none of them issue K-1s.
Essentially, one could pick just one or two midstream stocks, especially as Enbridge is already so diversified. However, for the sake of building a more robust portfolio, I went with players that cover all main regions to basically build bulletproof income, even in the event of subdued oil and gas prices.
I also added Canadian Natural Resources, which has hiked its dividend for 25 consecutive years with a CAGR of more than 20%. Chevron was added simply for its income and the fact that it’s an integrated oil company that has both upstream and downstream (including chemicals). Although I have often said that I consider Chevron to be too boring (that’s not a bad thing), it makes sense for an income portfolio.
Basically, the mix part of the portfolio is a mix of real estate and energy with a focus on “hard assets.” It’s like buying a midstream and REIT ETF without owning all the weaker players.
In the growth part of the portfolio, I put slightly less than 30% of total capital.
Here, I own some of my favorite companies, including RTX, which has both commercial and defense aerospace exposure; Union Pacific, which is the largest Class I railroad; Prologis, the owner of next-gen warehouses; Ares Management, one of the fastest-growing private credit giants; and Blackstone, a company that covers my alternative asset exposure. I also added Lockheed for its income and conservative profile.
Ares, which I already briefly mentioned, is different. It doesn’t have traditional credit risk, as its dividend is paid by its fee income. The company simply allocates customer money to debt deals, on which it earns fees. Credit risk, for Ares itself, is rather subdued. This is my way of benefiting from a rapidly rising private credit market and ARES’s ability to potentially exploit this more than others.
Putting it all together, the portfolio has a yield of roughly 5.6%.
In this article, I wanted to show that it’s possible, without derivatives, to buy a decent income that also provides growth. One thing I could change is to lower my BDC, REIT, and midstream exposure and replace it with a covered-call ETF like the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ). This ETF applies a covered call strategy on the Nasdaq and yields slightly more than 10.0%. By doing so, I could free up some capital to expand my growth-focused exposure.
I could also, if needed, erase some growth exposure and buy high-quality preferred equities. This would obviously hurt the growth profile, but it would help the income profile without increasing the risk. When done properly, it could easily improve the risk profile.
Bonds were not included, as I prefer bond proxies like REITs. If long-term government bond rates were to decline, these assets would likely benefit a lot, as the market would look for other places to buy income. This would apply to high-quality dividend stocks in general.
If I had this portfolio and additional cash, I would likely opt for ultra-short-term bills and low-risk preferred equities to store it.
There are thousands of ways to play this, and I think that this is one way to buy income, decent growth, safety, and a foundation that allows for a lot of adjustments.
After all, this is no complex portfolio.
I’m not retired, and I’m not planning on retiring. At least not anytime soon.
However, in this article, I discussed a portfolio I would love to own if I were to retire. It follows my 5% Rule, consisting of hard-asset gems, safe dividend payers, and some heavy hitters in areas like elevated income and dividend growth.
I think this is the kind of portfolio that could cover my bills for many years to come without causing me to lose sleep at night.
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