4 income favorites of the dividend detective

In its leading Dividend Detective newsletter, Harry Domash looks at a wide range of income opportunities; here he discusses 4 new ideas: a financial industry REIT, a growth-oriented ETF, a closed-end fund, a speculative business development company.

We are adding a new name to our portfolio of financial REITs. Redwood Trust (RWT) provides loans secured by residential, commercial and multi-family real estate. In September, Redwood increased its quarterly dividend by 17% to $0.21 per share. That was on top of a 13% payout increase in June. Redwood pays a dividend yield of 6.5%.

More from Harry Domash: Dividend Detective Finds 4 Favorites for Income

In our ETF growth opportunities, our new pick is: Impact Stocks YWCA Women’s Empowerment ETF (WOMAN). In theory, Impact tracks an index that provides exposure to companies that support women’s issues. It primarily owns technology and communications stocks.

Impact achieved 38% in the last 12 months. Based on the last four payouts, Impact pays a 5.2% dividend yield, but that includes a large distribution of capital gains in the quarter of 2020, which may not repeat.

In our CEF Growth Opportunities portfolio we add Global Opportunities in Clough (GLO). Clough uses fundamental analysis to select primarily US-based large-cap stocks.

Barely buying and holding, Clough changes his portfolio quickly, almost three times a year. Clough paid back 45% in 12 months and an average of 30% per year over two years. The dividend yield is 10.7%.

We’re also adding a new pick to our Dividend Speculators portfolio, which I see as a natural pick for that portfolio. SuRo Capital (SSSS) is a Business Development Company (BDC) that invests in startups that have not yet gone public.

SuRo pays dividends from proceeds received from the sale of assets. It has no recurring income, but pays dividends with cash received from asset sales.

Over the past 12 months, SuRo paid dividends totaling $5.97 per share. Based on that figure, SuRo’s dividend yield is 46.2%. But for the full year 2020, dividends were just $0.65 per share.

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In 2019, SuRo’s payouts were $0.32. Nothing was paid in 2017 and 2018 and SuRo paid out $2.80 per share in 2016. So SuRo is really a speculative game.

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