As we’ve often noted in our recent articles, high or even moderate dividend yields are hard to come by in the tech sector. Indeed, the top three performing sectors so far in 2020, tech, consumer discretionary, and communications services, have low dividend yields of .97%, .64%, and 1.09%, respectively.
Income investors are often faced with the challenge of whether to try and trade in and out of stocks in order to reap capital gains vs. holding higher yielding stocks for income. Of course, in a topsy turvy year like 2020, that conundrum is even more challenging.
Some income investors use ETFs, mutual funds or closed-end funds to get a piece of the tech action.
BlackRock Science and Technology Trust (BST) is a CEF which offers you a way to solve the income problem, and still benefit from tech.
It currently yields 4.61%, pays monthly, and uses a covered call strategy
Nine new stocks make the Safest Dividend Yields Model Portfolio this month, which was made available to members on September 23, 2020.
Recap from August’s Picks
On a price return basis, the Safest Dividend Yields Model Portfolio (-2.5%) outperformed the S&P 500 (-3.3%) by 0.8% from August 20, 2020 through September 21, 2020. On a total return basis, the Model Portfolio (-2.1%) outperformed the S&P 500 (-2.9%) by 0.8% over the same time. The best performing large cap stock was up 11% and the best performing small cap stock was up 6%. Overall, 12 out of the 20 Safest Dividend Yield stocks outperformed their respective benchmarks (S&P 500 and Russell 2000) from August 20, 2020 through September 21, 2020.
Only my firm’s research utilizes the superior data and earnings adjustments featured by the HBS & MIT Sloan paper, “Core Earnings:
The following immortal Neil deGrasse Tyson quote just about sums up my view on the high-quality BlackRock Science and Technology Trust (BST):
Innovations in science and technology are the engines of the 21st-century economy; if you care about the wealth and health of your nation tomorrow, then you’d better rethink how you allocate taxes to fund science. The federal budget needs to recognize this.”
Even before the impact of the pandemic was known, science and technology stocks were outperforming the broader market. Science and technology will also lead us in the post-COVID-19 age. I’m sure many will agree.
The sector was doing very well before the pandemic and is expected to do better in its aftermath. So, yeah, I’m very bullish on BST for the long term, both as a dividend play and growth play. BST invests in current leaders and emerging winners in the field