Buying 9%, 11%, and 15% Secure Dividends at Bargain Prices

NASDAQ: GLDI | Credit Suisse AG - Credit Suisse Gold Shares Covered Call Exchange Traded Notes News, Ratings, and Charts

GLDI – he lack of share price recovery allows us to pick up shares of solid income stocks at excellent yields, such as Credit Suisse Gold Shares Covered Call ETN (GLDI), Lumen Technologies (LUMN), John Hancock Tax-Advantaged Dividend Income Fund (HTD), and Invesco Dynamic Energy Exploration & Production ETF (PXE).

It is an exciting time to be an income-focused investor. Business results are improving, yet share prices have not recovered from the February-March crash. The lack of share price recovery allows us to pick up shares of solid income stocks at excellent yields. Who wouldn’t like earning 9%, 11%, or even 15% from an investment where the dividend looks secure, and there is tremendous potential for share price appreciation?

For fun, here are five that I find interesting:

Credit Suisse Gold Shares Covered Call ETN (GLDI)

GAMCO Global Gold, Natural Resources & Income Trust (GGN)

I’m lumping together the first two investments: GAMCO Global Gold, Natural Resources & Income Trust (GGN) and the Credit Suisse Gold Shares Covered Call ETN (GLDI). 

The two funds take different strategies to provide high-yield exposure to gold and natural resources. 

These days I am somewhat of a gold bug. The massive dumping of stimulus cash into the global economy could lead to currency devaluation, which is very good for the price of gold. 

GGN has a current yield of 10.3%, and GLDI yields 12.7%.

Lumen Technologies (LUMN)

I thought I was was not familiar with Lumen Technologies (LUMN) and its 10% dividend yield; however, with some digging, I discovered that Lumen is actually a rebrand of CenturyLink. 

The recent history of CenturyLink has been extremely troubled. 

The dividend was cut by 54% in March 2019, well before we had heard about the coronavirus. 

I suggest not being taken in by the new fancy name.

I often refer to the closed-end fund universe as a junkyard. As with any junkyard, you can sometimes find something valuable if you shift through the junk. 

John Hancock Tax-Advantaged Dividend Income Fund (HTD)

The John Hancock Tax-Advantaged Dividend Income Fund (HTD) may be such a nugget. 

The fund invests in utility common shares and preferred stock shares. 

I suggest further research to determine the level of tax advantage that applies to your particular situation.

The Invesco Dynamic Energy Exploration & Production ETF (PXE) offers a very contrarian play for future energy production. 

The fund owns a portfolio of oil drillers and refiners. Both ends of the carbon-based energy spectrum are significantly out of favor. 

PXE currently yields 6.5%.

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GLDI shares . Year-to-date, GLDI has gained 10.25%, versus a 11.58% rise in the benchmark S&P 500 index during the same period.


About the Author: Tim Plaehn


Tim is the lead income and dividend investing analyst at Investors Alley. He is the editor for The Dividend Hunter, a popular investment research advisory focusing on high-yield dividend stocks for investors who want a steady and growing income. Prior to joining Investors Alley Tim was a stock broker, financial planner, and F-16 fighter pilot and instructor in the U.S. Air Force. More...


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