Store, which went public in November
2014, is still in fast growth mode. For instance, its September
quarter revenues came in 30 percent above year-ago.
However, many market pundits expect
that the Trump administrationís economic growth plans could stoke
inflation, which would drive prevailing interest rates higher.
Conventional wisdom says that REITs underperform in rising interest
rate environments. Consequently, Storeís share price dropped nine
percent in November. But my research found that, in this instance,
conventional wisdom is wrong. In fact, both share prices and
dividends of REITs such as Store Capital would move up, not down in
those times. Storeís dividend yield is 4.7 percent.
Kraft Heinz Company (KHC): A
result of the July 2015 merger of Kraft Foods and the Heinz Company,
Kraft Heinz sells packaged foods globally. Brands include of course,
Kraft and Heinz, but also Jell-O, Kool-Aid, Maxwell House, Ore-Ida,
Oscar Mayer, Philadelphia, Planters, etc. The company is still in
the early stages of harvesting the benefits of its 2015 merger, but
things are looking up already. For instance, September quarter
earnings soared 89 percent over the year-ago quarter. Trumpís tough
talk about canceling NAFTA and other global trade agreements sunk
Kraft-Heinzís share price by nine percent last month. But, probably,
none of that will happen. Kraft Heinz is paying a 2.9 percent
Pimco Municipal Income Fund II (PML):
This a closed-end fund that holds bonds and other securities that
are exempt from federal income taxes. Hence, the dividends that you
receive from this and similar funds are also federal tax exempt.
Thus, this fundís 6.5 percent dividend yield would be equivalent to
a 7.6 percent to 10.0 percent equivalent taxable yield, depending on
your tax bracket.
If youíre unfamiliar with the term,
closed-end funds are similar to conventional mutual funds except the
fund itself only issues shares at the IPO. After that, shares trade
like stocks. You buy and sell from or to existing holders.
Rising interest rate worries have been
pressuring municipal bond prices since September. Then, concerns
that Trumpís economic policy could drive interest rates even higher
than previously expected further pressured PML. So, in all, PMLís
share price has dropped around 13 percent over the past three
Politics : Changes
Again, in what is turning out to be a
recurring theme here, when the dust settles, the new
administrationís economic changes probably wonít turn out to be as
inflationary as originally feared, and inflation fears will
are my ideas. But donít take them as gospel. Do your own research.
The more you know about your stocks, the better your results.