Happy Thanksgiving! I Am Thankful For Dividends

Happy Thanksgiving!

It is the time to pause, reflect, and express gratitude for the blessings of the year. It’s a holiday built around family, friends, and a shared meal, and one that celebrates community and the abundance that surrounds us. As income investors, we must take this moment to appreciate something else as well: the incredible scale and strength of the U.S. economy and the opportunities it creates for those of us who choose to invest in it.

The United States is the largest consumer market in the world. We love stuff, and love to shop, travel, eat, and live life fully, freely. Consumers spend trillions of dollars every year doing just that. Every gallon of gas, every credit card swipe, every online order, every restaurant meal, every mortgage payment, every business loan – they all generate economic activity. By investing in the right sectors, income investors can claim their share of all that activity in the form of dividends and interest payments.

That’s the core of our strategy at High Dividend Opportunities. We invest in REITs, Business Development Companies (BDC), midstream MLPs, energy royalties, preferred securities, corporate bonds, and diversified CEFs that give us exposure to parts of the economy most people don’t think twice about. While consumers spend, businesses operate, and infrastructure keeps expanding, our portfolio keeps collecting a steady share, month after month, quarter after quarter, year after year.

Let’s take a look at how deeply income investing connects you to the everyday economy.

When you gas up your car, I get my royalties. With energy royalty names like Dorchester Minerals (DMLP) – Yield 12.9% and Kimbell Royalty Partners (KRP) – Yield 11.8%, you benefit directly from oil and natural gas production. These royalties pass a portion of that upstream cash flow to shareholders, making them one of the purest ways to benefit from America’s energy engine.

Crank up the heat this winter, I’m collecting distributions. Utilities and infrastructure CEFs like Reaves Utility Income Fund (UTG) – Yield 6.3% and Cohen & Steers Infrastructure Fund (UTF) – Yield 7.6% provide exposure to natural gas pipelines, power transmission networks, telecom towers, and more. These services don’t go out of style. Whether it's freezing in Minnesota or scorching in Texas, the utility meter keeps running – and your dividends keep coming.

Spending on groceries and holiday shopping, I get my cut. With investments in diversified funds like John Hancock Financial Opportunities Fund (BTO) – Yield 7.6%, and individual preferred stocks issued by major and regional banks and insurance companies (Yields +6%), you can earn a portion of the fees from trillions in transaction volume. Financial services are an important enabler of America, the biggest consumer market in the world, and all those transactions can generate passive income.

Small businesses represent the heartbeat of the American economy, and Business Development Companies like Ares Capital Corp (ARCC) – Yield 9.4% provide loans to thousands of them. Next time you shop or transact with a local business, it is likely they make interest payments to one of the public BDCs, and indirectly pay you a small fee.

Buying a home or making mortgage payments, I collect my share.

Agency mortgage REITs like Annaly Capital (NLY) – Yield 12.4% and AGNC Investment Corp (AGNC) – Yield 13.6% funnel cash flow from government-guaranteed mortgage-backed securities to investors.

And one of my favorite vehicles, the CEFs, ties all of this together. They actively manage their holdings and invest across different industry sectors (even those that aren’t known to be generous with dividends), and proactively adjust to market conditions. They work their way to deliver regular cash distributions to shareholders. This makes them ideal for income investors who want broad sector exposure with professional oversight and a strong focus on current income generation.

Thanksgiving reminds us that abundance goes beyond the spread at your dinner table. It can be found in the daily activity that keeps America running. As income investors, we’re not spectators, we’re profit participants. We benefit from the energy people use, the goods they buy, the homes they live in, the credit they rely on, and the endless flow of economic activity across the country.

This holiday, take a moment to be grateful not only for the meal in front of you, but for the resilience and vibrancy of the U.S. economy, and for the free markets, which provide the ability to build a portfolio that taps into this abundance every single day.

From all of us at High Dividend Opportunities, Happy Thanksgiving – and may your portfolio continue to give you reasons to be thankful all year long.