Yield Hunting (Part 3): 8.5% In 2 Years From OCCI Preferred Stock OCCIN

2025-01-23 11:00:00 ET

Summary

• The yield curve is normalizing, and we aim for 8%+ yields with low downside deviation in our low-duration portfolio.
• OCCI has higher leverage and worse credit metrics compared to ECC and OXLC, but its preferred stock, OCCIN, offers an 8.5% YTM.
• Despite OCCI's lower credibility, OCCIN's low duration and yield make it a viable addition for diversification in our low-duration portfolio.
• We monitor common stock performance and adjust our positions if there's a 10% drop, ensuring our portfolio remains optimized.

In recent months, we have observed the yield curve normalizing. Shorter-term yields are finally lower than long-term yields. With the expectation that short-term yields will go even lower in 2025, we decided to share our favorite income picks from our low-duration portfolio with readers. Based on the products' low duration, we aim to earn 8%+ yields with very low downside deviation....

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