Maximum Income for Retirees portfolio expanded to include CPLP, SNH, and SCM

Since launching the Maximum Income for Retirees portfolio late last year we have received positive feedback from subscribers seeking greater investment income. Originally we limited each of the three sectors groups – REIT (Real Estate Investment Trust), MLP (Master Limited Partnership), and BDC (Business Development Company) – to four holdings each. However, to increase diversification while raising the average dividend yield for the entire portfolio we are adding an additional holding to each sector.

Capital Products Partners (CPLP) is a shipping MLP that specializes in transporting energy products. However, its revenue stream consists primarily of fixed fees for services provided, and is not directly affected by fluctuations in the price of oil. For that reason it recently announced its first dividend increase more than four years to what equates to a yield of almost 11% at its current unit price.

Senior Housing Properties Trust (SNH) is a REIT that, as its name implies, specializes in owning living quarters and medical facilities for senior citizens. The company recently acquired another 37 senior-living communities to its portfolio, which now includes over 400 properties in 40 states. Its current distribution rate works out to an annualized yield of 8.4%.

Stellus Capital Management (SCM) is a BDC that has a ten-year track record of generating high income to its shareholders. Its typical loan size is in the $10 – 50 million range, with a 3 – 5 year maturity. It primarily targets middle market and small cap companies with gross earnings of at least $8 million that operate in industrial sectors. The current distribution rate is 11.4%.

As always, we do not recommend “cherry picking” only a couple of holdings from this portfolio, but instead suggest that you own all or most of them to minimize risk. The entire portfolio can be found under the ‘Portfolios’ tab of the Personal Finance website.

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