Amarin Corp Plc (AMRN)

[sts66]

That's a good point - IMO applies more to bond funds, preferred stocks, and utilities, which you mentioned, all of which move inversely with interest rates - but one of my two bond funds (PDI) hedges against increases in rates with currency and interest rate swaps, they won't be hurt at all. One of my hybrid mREITs (NRZ) benefits from rising rates too, because prepayments of mortgages go down, and new loans have higher rates. What worries me more than interest rates is inflation and the affect of new tariffs on earnings - that can drive both the div and pps down, a double whammy. Amazon doesn't pay a div, but they just announced they're raising their minimum wage from $7.50 to $15, and that's a trend that's not going to stop, employers are desperate for certain types of workers, and it's going to hit earnings hard. I wouldn't own Walmart for that reason plus effects of tariffs on the goods they sell, which are mostly made in China.

Another thing to be wary of is stocks or funds that use Return of Capital (ROC) to pay distributions - that's usually a red flag, although in expensive asset companies like shippers depreciation is what classifies the divs as ROC - but it's called "Good ROC", simply a tax accounting thing***. Even worse is something that uses ROC, but it's actually Return of Principal - you're just getting your own money back, or in the cases of some ETFs/CEFs you're getting new investor's money as new units are created and sold. Same thing goes for companies that borrow money or do secondary offerings to pay divs - stay far, far away - gets really complicated when it comes to REITs because of the way they accounting - tracking book value is critical to know whether secondaries are acretive or dilutive.


*** Good ROC can be great for a taxable account - it's not a qualified dividend, so it doesn't get taxed, it just lowers your cost basis, so you get to choose when to take the tax hit if/when you sell - then it's taxed at cap gains rates. If you die, whomever gets the stock has a new basis (not yours), which is whatever the pps of the stock is when transferred, so they could sell and pay no taxes on the transaction because they've made zero profits as far as the IRS is concerned.