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Aug 21 2016

My Latest Buy: AWP

stock_buy

This month I bought 280 shares of Alpine Global Premier Properties Fund (NYSE:AWP) at $5.70 per share, for a total of 350 shares. This isn’t a new addition to my portfolio, as I bought 70 shares last October. With an annual dividend yield of 10.53%, it was a good choice for making up for last month’s dividend cuts which moves me just a little bit closer to my projected monthly dividend income goal of $750 per month.

When I first bought into AWP, I gave my personal take on its pros and cons. Things have changed a little since then, so I would like to revisit the upsides and downsides to AWP.

Positives:
Dividend Yield. Fortunately, the dividend of 5 cents per share is unchanged since October. As AWP’s stock price has slipped a little, its yield has increased a little, but is still in the ballpark of 10% which is where I want to be for an acceptable risk/reward ratio. As I said before, AWP has a history of stability and occasional dividend increases, so the 5 cent monthly dividend may get better.
Discount. According to CEFConnect, it’s current price is discounted at 16% below NAV. It was 17% in October, so it’s not quite as discounted. At $5.70 per share, it’s still a reasonably good price.
Low leverage. In October, AWP had an effective leverage of 2.15%. Now, according to CEFConnect, its effective leverage is 5.11%. That’s still an unusually low leverage for an ETF with such a good yield, but this growing leverage rate is not a good trend is certainly something to keep an eye on in the future.

Negatives
Not old. As I said before, AWP’s inception was in 2007, so it’s only experienced one serious recession. I would be more confident in AWP if it has weathered at least three recessions, as that would prove the competence of management.

At a price of $5.70 per share and a monthly dividend of 5 cents per share, these 280 new shares of AWP will pay out $14.00 (taxable) every month, lifting my projected monthly dividend income to $732.78. Wooooot!

Image Credits: PublicDomainPictures (shopper, money), (pixabay.com); NYSE logo © New York Stock Exchange

3 comments

  1. Doug

    Every little bit helps get to that end goal.

  2. Doug

    Left out part of the website should be correct now

    1. Dividend Quest

      Thanks for visiting Doug! Yes, every little bit certainly helps! Especially so when one consistently invests month after month and year after year. Prior to 2014, my stock buys and transfers of capital to my brokerage account were erratic and irregular. But once I started my matching program and made at least one stock buy every month, my dividend income has grown quite nicely. Keep at it and your snowball will really pick up speed.

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