Yield Archives - Zxcoachoutlet

German debt price up on weaker data; Italian 10-year yield hits 1-year low

October 7, 2020

By Olga Cotaga

LONDON, Oct 7 (Reuters) – The price for benchmark German debt increased on Wednesday after German industrial output unexpectedly slipped in August, suggesting the recovery in Europe’s largest economy from the coronavirus shock could be weaker than hoped.

German 10-year yields fell 1.6 basis points to -0.52% DE10YT=RR after inching to a two-week high on Tuesday.

The day before, the gap between German and U.S. 10-year yields US10DE10=RR widened to its largest since March as U.S. yields rose. They gave back those gains after President Donald Trump on Tuesday abruptly cancelled talks in Washington over coronavirus aid.

For the Italian 10-year government bond, the yield fell to its lowest in more than a year at 0.765% IT10YT=RR as traders expected more monetary policy stimulus from eurozone’s central bank. It last traded down 1.6 bps.

On Friday, the Italian 10-year BTP yield fell to a record low

Kinder Morgan Is Offering A Safe, 4-Year High Dividend Yield Of 8.5% (NYSE:KMI)

October 7, 2020

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The entire energy sector has been going through a fierce sell-off over the last four months, in contrast to the broad market, which has been hovering around its all-time highs. Kinder Morgan (KMI) has not escaped the sell-off and thus it is now offering a 4-year high dividend yield of 8.5%. During sell-offs, most investors view such an abnormally high dividend yield as a signal of an imminent dividend cut. However, the dividend of Kinder Morgan is safe.

Business overview

The pandemic has caused a severe recession in the U.S. Consequently, many companies have gone out of business and thus the total commercial demand for natural gas has decreased this year. However, it is critical to note that the effect of the coronavirus crisis on the natural gas market is much smaller than the effect on the oil market. The Energy Information Administration [EIA] expects the average annual U.S. demand

Aberdeen Asia-Pacific Income Fund: 8% Yield Supported By World Leading Economic Growth (NYSEMKT:FAX)

October 6, 2020

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The Aberdeen Asia-Pacific Income Fund (NYSEMKT:FAX) is a closed-end fund that invests in Asia-Pacific region bonds and debt securities. While the COVID-19 pandemic has represented a challenging market environment, the fund has been able to overcome significant volatility to return 2% thus far this year. The actively-managed fund currently yields 8.3% distributed monthly, making it a compelling income vehicle. We are bullish on FAX as macro data suggests the Asia-Pacific region is well-positioned to deliver strong economic growth setting up a positive outlook for region bonds. The combination of attractive yields and strong fundamentals makes FAX a good option to diversify investor portfolios with upside on a total return basis.

(Source: finviz.com)

FAX Background

FAX with over $1.2 billion in total assets and an inception date in 1993 is one of the oldest CEFs investing in the region backed by a long-term track record from a credible management team. The

Kimberly-Clark: Softex Paves Entry Into Large Indonesia Market And You Get A 3% Yield To Boot (NYSE:KMB)

October 5, 2020

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In early September Kimberly-Clark (KMB) announced a definitive agreement to acquire Softex Indonesia for ~$1.2 billion in cash. Softex is a leader in the personal-care products sector in Indonesia – the largest economy in Southeast Asia. The price looks quite reasonable and strategically the acquisition is an obvious plus moving forward. Combined with recent sales growth, KMB’s near 3% yield in a negative real interest rate environment makes the shares attractive.

Softex

Softex had sales (primarily diapers) of ~US$420 million in 2019 means the buyout was at a 3x multiple of sales, quite reasonable considering Softex had been growing sales at a double-digit rate. The two companies are an excellent strategic fit given KMB’s entry into Indonesia – at 267 million people, the fourth most populous country on Earth – and the symbiotic fit of Softex’s diapers business with KMB’s line of Huggies, Depends, Pull-ups, and Kotex.

Note the US$420

Record Shorts Show New Bets on Steeper Treasury Yield Curve

October 5, 2020

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(Bloomberg) — Fast-money wagers against longer-dated Treasuries have hit a record in a sign hedge funds are positioning themselves ever more aggressively for a steeper yield curve.

Net short speculative positions in long bond futures saw the biggest weekly climb since 2007 to reach around 209,000 contracts, according to the latest Commodity Futures Trading Commission data. Meanwhile, net long positions on 10-year Treasuries have risen to their highest since October 2017.

So-called steepener trades are often seen as bets on reflation, while investors are also positioning for the possibility of greater deficits should the Democratic party prevail in November’s election. A new Wall Street Journal/NBC News poll taken after Tuesday’s debate showed Joe Biden leading Donald Trump by 14 percentage points. It was taken before the president was diagnosed with coronavirus.

chart: Speculators long bond positions at record net-short as 10-year yields bets climb

© Bloomberg
Speculators long bond positions at record net-short as 10-year yields bets climb

The surge in shorts appears

I Bought Fidus Investment: 12% Yield And 35% Below Book (NASDAQ:FDUS)

October 4, 2020

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Introduction

This article is part of a series discussing how to build a retirement portfolio using business development companies (“BDCs”) currently yielding over 12% and their safer notes – baby bonds/preferred shares with yield-to-maturities ranging from 6.5% to 10.0%. The previous article discussed Golub Capital (GBDC) which is a lower yielding BDC that typically implies a “safer” portfolio and/or sustainable dividend coverage.

BDC Buzz Starts a Position in FDUS

I recently started a position in Fidus Investment (FDUS) because I believe that there’s a good chance for a total return potential of 30% or higher over the next 12 months as discussed at the end of the article. My subscribers are well aware that I often wait for stocks to have a relative strength index of (“RSI”) of close to 30 before buying. This is the definition from Investopedia:

The relative strength index (RSI) is a momentum indicator developed by

Trinseo: 6% Yield, Revenue Recovery Likely In 2021 (NYSE:TSE)

October 4, 2020

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My dear long-term readers surely now that I have high hopes for a few chemical heavyweights that have been heavily impacted by the recession this year. The list includes prominent names like Olin Corporation (OLN) and Dow Inc. (DOW) that fared quite well since the publication of my most recent notes on them, as Olin is up ~27.8% since August 20, while Dow has climbed ~11% higher since July 24.

Today, I would like to take a closer look at Trinseo S.A. (TSE), another chemical industry player that has fallen out of favor with investor due to the pandemic-induced challenges, thus the share price has materially corrected, and its yield is now hovering above 6%, assuming a recently declared $0.4 DPS.

As the rock-bottom interest rates coupled with a great dividend reset have significantly complicated the portfolio-building and rebalancing for income-focused investors, high-yield names that are in

ETF And Conventional Fund Investors Turn Their Backs On High Yield Funds For The Week

October 3, 2020

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Bond funds (including ETFs) witnessed their first week of net outflows in 25 for the Refinitiv Lipper fund-flows week ended September 30, 2020, handing back a net $1.1 billion. While investors continued to inject net new money into corporate investment-grade debt funds (+$2.1 billion), they were net redeemers of corporate high yield funds (-$3.6 billion) and flexible funds (-$808 million).

With the U.S. equity market witnessing declines over the preceding few weeks, it’s not too surprising to see equity funds and high yield bond funds suffer net redemptions. However, equity funds only handed back a net $32 million for the fund-flows week (for their seventh consecutive week of net outflows), with conventional equity funds suffering net redemptions of $5.024 billion and equity ETFs attracting some $4.992 billion. For the fund-flows week, the average equity fund returned a handsome 3.17%.

However, in the high yield funds space, both conventional high yield

Italy’s 10-year yield hits record low, Trump underpins euro zone bonds

October 2, 2020

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By Yoruk Bahceli

AMSTERDAM, Oct 2 (Reuters) – Italy’s 10-year bond yield fell to a record low on Friday before a key reading is expected to show persistent deflation in the euro area, while investors favoured safe-haven assets after U.S. President Donald Trump tested positive for the coronavirus.

Investors will pour over the first estimate of euro zone inflation for September to gauge just how weak the euro zone economy is amid signs of divisions with the European Central Bank.

Economists in a Reuters poll expect euro zone inflation to have fallen 0.2% year-on-year in September, unchanged from August, the first time the rate was negative since 2016. But markets are likely primed for a lower figure after German and Italian inflation came in far below forecasts this week.

Meanwhile, investors globally shunned risk in favour of safe-haven assets as Trump’s positive test results added to uncertainty around the

Getty Realty: Fill Up On This 5.7% Yield (NYSE:GTY)

September 30, 2020

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September hasn’t been too kind to Getty Realty (NYSE:GTY), as the shares have declined by 11% since the start of the month. Undoubtedly, fears of another surge in COVID-19 have weighed on the share price. However, I believe the decline is largely unwarranted. In this article, I show why the shares are an attractive investment at the current valuation; so let’s get started.

(Source: Company website)

A Look Into Getty Realty

Getty Realty is a leading net lease REIT that specializes in the ownership of Gas Stations/Convenience Stores, and other automotive properties. It currently owns 946 properties that are spread across 35 states. As seen below, the properties well diversified, with exposure to much of the United States.

(Source: Company Earnings Presentation)

What I like about Getty Realty is the need-based products and services that its properties provide. Its properties are generally located in densely-populated, high-traffic areas. Currently, 55%