As the clock strikes 73, there’s a financial rite of passage awaiting – Required Minimum Distributions (RMDs). But fear not, for even in this realm of compulsion, lies an opportunity – to transform those mandatory withdrawals from 401(k)s or IRAs into a tapestry of investments in the finest stocks primed for your RMD portfolio.
For those basking in the glow of income from non-retirement sources, the allure of growth stocks beckons, promising a vista of long-term appreciation.
If your gaze is set on seeding legacy wealth, casting an eye on the equities destined for your descendants might be the strategic move.
But for those seeking to cultivate additional streams to nurture the golden years, the path of stocks offering bountiful yields and distributions might be the road to traverse. Herein lie the prime picks for your RMD stash.
Energy Transfer: Fuelling Your Portfolio
Source: Casimiro PT / Shutterstock.com
Energy Transfer (NYSE:ET) emerges as a master limited partnership (MLP) – custodian of midstream energy assets like oil and gas pipelines, alongside oil and gas storage facilities. MLPs, the knights that pass through untaxed realms, chauffeur the bulk of their cash flow to unitholders.
For the flock with an eye for income, MLPs like ET stock blossom as sweet nectar-filled opportunities. With distributions currently yielding a bountiful 8.11% annually, Energy Transfer stands as a beacon of high-yield offerings.
Yet, the allure does not end at distributions. Stifel analyst Selman Akyol muses on the potential in Energy Transfer, citing catalysts from recent mergers, hinting at the prospect of unit buybacks – a melody harmonious to investors’ ears.
Golub Capital BDC: Navigating the Capital Waters
Source: wsf-s / Shutterstock.com
Golub Capital BDC (NASDAQ:GBDC) steers the BDC ship – navigating the fathomless waters of middle-market lending and investments. These craft, garlanded with favorable tax tidings, shower 90% of their annual earnings upon shareholders.
For the souls whose symphony resonates with yields, GBDC stock now unfurls with a forward yield standing at 9.54%. Yet, in this sea of yields, Golub Capital BDC dazzles not just with returns, but with a strategic stroke – focusing its arsenal on first-lien, floating-rate securities, shielding investors from formidable risks.
As the currents of interest rates sway BDC vessels, Golub’s ship has charted a course upward, sailing on the whispers of potential Fed actions. As the Federal Reserve shifts its sails, could Golub Capital BDC catch the favorable winds?
Modiv Industrial: Building Your Investment Foundations
Source: Vitalii Vodolazskyi / Shutterstock
Real estate investment trusts (REITs) indeed paint a tempting picture for the dividend aficionados. Modiv Industrial (NYSE:MDV), though not a household name, emerges as a fresh face in the REIT realm, beckoning investors with an array of enticing traits.
At the heart of MDV stock’s charm lies Modiv’s sagacity in capital allocation, articulately presented in its recent earnings discourse – divesting non-core properties while eyeing lucrative acquisitions; a page torn from Buffett’s legend.
With a plump forward yield of 6.69%, Modiv Industrial dances to the tunes of high returns. While the drums of Fed rate cuts have already set the stage for a rally, the murmurs of a potential “Fed pivot” could orchestrate a further upwards crescendo. Can Modiv Industrial strike the right chord with investors seeking both yield and potential rallies?
Delving into Diverse Dividend Stocks
Nuveen AMT-Free Quality Municipal Income Fund (NEA)
Source: NicoElNino / Shutterstock.com
Nuveen AMT-Free Quality Municipal Income Fund (NYSE:NEA) navigates the municipal bond market, offering investors an avenue of tax-exempt interest income. NEA stock presents an attractive forward annual yield of 5.49%, translating into a robust single-digit yield post-tax. While not primarily aimed at capital appreciation, NEA’s allure lies in its steady income stream, especially in a favorable interest rate environment.
Realty Income (O)
Source: Shutterstock
Realty Income (NYSE:O) stands out as a beacon among monthly dividend stocks, boasting a lengthy track record of consistent payouts. With a forward dividend yield of 5.7% and steady dividend growth, O stock appeals to income investors seeking reliability and incremental returns. The recent merger with Spirit Realty Capital positions Realty Income for potential earnings upside, underscoring its strong value proposition.
Liberty All-Star Equity Fund (USA)
Source: Rawpixel.com / Shutterstock.com
Liberty All-Star Equity Fund (NYSE:USA) offers a curated selection of high-profile stocks within its portfolio, catering to growth and value investors alike. With robust total returns matching the S&P 500 and consistent quarterly distributions, USA stock presents a compelling alternative to index funds. Tax-efficient distributions further enhance its appeal, making it a strong contender for investors eyeing sustainable returns.
Unveiling Reaves Utility Income Fund: A Strong Contender Among High-Yield CEFs
The Allure of Reaves Utility Income Fund
Reaves Utility Income Fund (NYSE:UTG) emerges as a robust option in the realm of high-yield Closed-End Funds (CEFs). The fund’s name itself hints at its primary focus on the utilities sector. However, don’t be deceived by the moniker – UTG’s portfolio doesn’t merely consist of electric and gas utility stocks but also boasts a significant presence of telecom stocks.
A Diverse Investment Approach
Beyond its holdings in the utilities sector, this fund delves into debt securities issued by utility companies. This unique blend of equity and debt investments is what propels UTG stock to offer substantial distributions. Presently, investors can relish a forward annual yield of 8.46%, marking it as an attractive choice for those seeking robust yields.
Managing Risk Through Modest Leverage
Despite utilizing leverage to amplify returns, Reaves Utility Income Fund exercises prudence in its approach. In the past year, the fund’s leverage accounted for a modest 21.44% of total assets. The inherent stability of the utilities sector further acts as a bulwark against excessive risk, showcasing a cautious and calculated investment strategy.
As of the publication date, Thomas Niel maintains no direct or indirect positions in the securities discussed. The views expressed are solely those of the author and adhere to InvestorPlace.com Publishing Guidelines.
