3 Dividend-Paying Funds Expected to Benefit from Trump’s Infrastructure Upgrades
By: Ned Piplovic,
President-elect Donald Trump’s promise to spearhead major U.S. infrastructure improvements should give investors a chance to position their portfolios to take advantage of such initiatives.
Picking individual stocks is difficult at this stage. However, while we wait to see whether infrastructure spending spurs assets appreciation, you could collect dividends that yield more than 7% from each of these funds.
Cohen & Steers Infrastructure Fund, Inc. (NYSE: UTF)
Primary objective of the Cohen & Steers Infrastructure Fund is to generate high income through investments in securities issued by infrastructure companies. As of November 30, 2016, the fund held $2.7 billion of managed assets across 177 holdings. The regulated electric sector had the highest share of total assets with 17%. The fund is also geographically diversified. Eighty percent of its total assets are from companies in the United States, Canada, Australia, United Kingdom, Italy and Japan. U.S. holdings alone accounted for 57% of all assets.
Its current annual dividend pays $2.41 for a 12.2% yield. The total dividend is the sum of monthly payouts — $0.134 — and an additional payout at the end of the year to meet distribution requirements. Its year-end payout of $0.432 per share is scheduled for Jan. 17, 2017. Since the ex-dividend date is Dec. 28, investors still have time to take advantage of the hefty cash payout if they invest before the close of trading on Dec. 27. The current yield is almost 60% higher than its 7.7% trailing average yield for the past five years.
Since the 52-week high on Sep. 8, the price decreased 13% by Nov. 14. However, the share price recovered a quarter of that loss and currently is only 10% lower than the 52-week high. On Dec. 20, its share price closed at $19.80, which is 25% higher than the 52-week low on Jan. 20, 2016.
Center Coast MLP & Infrastructure Fund (NYSE: CEN)
Per the fund’s official webpage, Center Coast MLP & Infrastructure Fund (NYSE: CEN) is “actively managed” and invests in a portfolio of master limited partnerships (MLPs) and energy infrastructure companies. The fund seeks to provide investors with an attractive total return potential through monthly distributions and capital appreciation.
Its monthly dividend payout is $0.1042 for a total annual dividend of $1.25 — an 11% dividend yield. The fund has paid the same $1.25 annual dividend since 2014, which is significantly higher than the 2013 annual dividend of $0.313.
The current share price is 10.6% lower than the 52-week high just a few months ago on Sept. 8. However, compared to the 52-week low from Jan. 20, 2016, the current share price is 83% higher.
First Trust Energy Infrastructure Fund (NYSE: FIF)
First Trust Energy Infrastructure Fund invests in the energy infrastructure sector. Holdings include pipeline companies, utilities and other companies that support infrastructure assets. These assets include pipelines, power transmission, petroleum storage and natural gas storage.
Its monthly dividend of $0.11 translates to a $1.32 annual payout and a 7.1% dividend yield. While the current dividend yield is lower than the 10.5% five-year average, it is still a better-than-average return on investment.
Its share price performed better than the dividend yield. From the 52-weel low on Jan. 20, 2016, to the 52-week high on Nov. 30, 2016, its share price increased 83%. Since then, the price is down slightly, but is still only 5% lower than the 52-week high.
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