Monthly Dividend Stock Review – 40/86 Strategic Income Fund CFD

40/86 Strategic Income Fund a non diversified and closed-end ETF that will invest primarily in high yield bonds, debentures, notes, corporate loans, convertible debentures and other debt instruments rated below investment grade or determined by the Fund’s investment manager to be of comparable quality. The Fund may invest up to 30% of its total assets in the securities, including high yield obligations, of issuers domiciled outside of the Unites States. The Fund may also invest up to 10% of its total assets in securities that are the subject of bankruptcy proceedings or in default.

CFD through its subsidiaries, provides supplemental health insurance, retirement annuities, universal life insurance and consumer and commercial finance products and services.

Quote (CFD)

Price: 7.42

Dividend Yield: 6.90%

52Week High/Low: 3.47 – 8.35

Analysis

The fund manages over $19 billion in fixed income assets.  This is a closed-end fund which is a collective investment scheme with a limited number of shares.  40/86’s top holdings are in the electrical, gas and sanitary services industry.  This stock has been around since 1998 and had an IPO of $14.  It has been pretty stable up until the recent recession.  As far as dividends this company has averaged a 9.05% annual dividend yield from 2004-2009.  Unfortunately it has been cutting it’s dividend yield since 2004 as well.  Still even with the cuts to average 9% a year is not bad.

Overall the fund is decent but the steady declining dividend speaks of poor growth.  I think it is key to find monthly dividend stocks with steady growth in share price and dividend yield.  Not to mention if you can get the stock at a decent price would also make for a killer investment.  This stock is trading at closer to it’s 52 week high at the moment.

Before coming to any conclusions be sure to read my disclosure.

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