Aug 21 2016

My Latest Buy: AWP


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.

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.

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!

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