Welcome!

Containers Expo Blog Authors: Lori MacVittie, Anders Wallgren, Elizabeth White, Pat Romanski, AppDynamics Blog

News Feed Item

Zacks Investment Ideas feature highlights: an ETN from JP Morgan, Natural gas, Infrastructure, High Income andVanguard REIT Index ETF

CHICAGO, Dec. 7, 2012 /PRNewswire/ -- Today, Zacks Investment Ideas feature highlights Features: an ETN from JP Morgan (AMEX:AMJ), Natural gas (AMEX:MLPG), Infrastructure (AMEX:MLPI), High Income (AMEX:MLPY) and Vanguard REIT Index ETF (AMEX:VNQ).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

No Dividend Tax Debate for These High-Yield ETFs

 No matter what side of the fiscal cliff debate you are on, it seems pretty clear that taxes are going up. Both sides are now proposing new increases with some forecasting that over $1 trillion in new revenues will be collected over the next decade.

A big part of this increase could very well be in the form of new dividend taxes. By some estimates, this favorable rate—which is currently at 15%-- could nearly triple if we go over the Fiscal Cliff, pushing these rates (possibly) up to just south of 45%.

This situation has certainly impacted investors that have a dividend focus, pushing down firms that are in traditional high yield sectors. Key dividend stocks in sectors like utilities have been getting crushed, and other firms with big payouts haven't exactly been doing much better with this cloud of uncertainty (also read 3 ETFs to Prepare for the Fiscal Cliff).

Yet even with this issue, high payout stocks remain in great demand among a variety of investors, thanks to the low rate environment and the lack of quality alternatives in the bond world. So what is an investor to do if they want to still capture high yields but are looking to avoid the risks that come with a massive dividend tax increase?

Focus on Ordinary Income

While most securities pay out investors in the form of qualified dividends, there are a few that utilize a different structure in order to have their yields be categorized as 'ordinary income'. Generally speaking, this is done to avoid double taxation, but it also results in huge payouts, as usually more than 90% of income must be paid out to investors on a yearly basis.

Although it is true that the current rate on ordinary income—for the top bracket—is also expected to rise, it could still stay below the 40% mark. This means that if dividend rates go up to their highest projected level, income derived from ordinary income focused securities could actually be a better deal from a tax perspective while having less policy risk before any decision is made as well (read Escape the Cliff with These Dividend ETFs).

If that wasn't enough, these securities usually pay out more to investors anyway so they could truly become a top yield destination if the worst happens with the Cliff. While individual stocks could certainty be a way to approach this problem, an ETF technique could offer added benefits thanks to the structure and diversification of these products.

So for investors looking for a different high yielding play that could be relatively unscathed by the current dividend issue, a look to any of the following three ETFs may be the way to go:

MLPs

Master Limited Partnerships are often viewed as the 'toll roads' of the commodity world. They are usually pipelines or similar types of assets that store or move products like oil or natural gas, making them less sensitive to economic conditions while also having very stable businesses.

As you might be able to guess, these are partnerships so investors do have to fill out a K-1 form at tax time. However, if investors buy up ETNs in this space—which are structured as debt that seeks to track an index—this tax headache is avoided while still allowing for all of the taxation benefits (and high yields) that come from investing in the MLP world.

One of the most popular, and oldest, in this respect, is (AMEX:AMJ), an ETN from JP Morgan. It tracks the Alerian MLP Index, charging investors 85 basis points a year in fees while 50 securities are in the underlying index (see How to Play the MLP ETF Space).

Yields come in above 5% for this ETN, while average volume is approaching one million shares a day. If that wasn't enough, investors also have a host of other similar ETNs in the space, each of which have a different focus like natural gas (AMEX:MLPG), infrastructure (AMEX:MLPI), or high income (AMEX:MLPY), so there are certainly a variety of options for those who want to take this route.

Real Estate

REITs, or Real Estate Investment Trusts, are arguably the most famous of the group and are best known for their outsized payouts. These securities invest in real estate projects or manage homes and buildings, making them a much more liquid way to buy up real estate.

The space has over a dozen ETFs giving investors plenty of choices and various ways to delve deeper into a particular sector. While there are a number of broad funds in the REIT ETF world, the most popular is easily the Vanguard REIT Index ETF (AMEX:VNQ).

This is an ultra cheap choice—just ten basis points a year in fees-- that sees great volume of over three million shares a day. The yield is also pretty good, coming in at roughly 3.5% in 30 Day SEC terms suggesting that it could also be a decent yield destination (see Is the Panic Over for mREIT ETFs?).

The ETF also does a great job of spreading out assets as it has over 115 companies in total. Still, SPG takes up a decent chunk at over 10% of the total, but beyond that the fund is quite even and even puts 50% of the assets in securities that are mid caps or smaller.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms.  It monitors more than 200,000 earnings estimates, looking for changes.

Then when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories:  #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock picking system; the Zacks Rank, continues to outperform the market by nearly a 3 to 1 margin.  The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter Profit from the Pros.  In short, it's your steady flow of profitable ideas GUARANTEED to be worth your time.  Get your free subscription to Profit from the Pros at:  http://at.zacks.com/?id=7298

Follow us on Twitter:  http://twitter.com/ZacksResearch

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

http://www.zacks.com

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
SYS-CON Events announced today that VAI, a leading ERP software provider, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. VAI (Vormittag Associates, Inc.) is a leading independent mid-market ERP software developer renowned for its flexible solutions and ability to automate critical business functions for the distribution, manufacturing, specialty retail and service sectors. An IBM Premier Business Part...
Fortunately, meaningful and tangible business cases for IoT are plentiful in a broad array of industries and vertical markets. These range from simple warranty cost reduction for capital intensive assets, to minimizing downtime for vital business tools, to creating feedback loops improving product design, to improving and enhancing enterprise customer experiences. All of these business cases, which will be briefly explored in this session, hinge on cost effectively extracting relevant data from ...
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
As enterprises work to take advantage of Big Data technologies, they frequently become distracted by product-level decisions. In most new Big Data builds this approach is completely counter-productive: it presupposes tools that may not be a fit for development teams, forces IT to take on the burden of evaluating and maintaining unfamiliar technology, and represents a major up-front expense. In his session at @BigDataExpo at @ThingsExpo, Andrew Warfield, CTO and Co-Founder of Coho Data, will dis...
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
The cloud promises new levels of agility and cost-savings for Big Data, data warehousing and analytics. But it’s challenging to understand all the options – from IaaS and PaaS to newer services like HaaS (Hadoop as a Service) and BDaaS (Big Data as a Service). In her session at @BigDataExpo at @ThingsExpo, Hannah Smalltree, a director at Cazena, will provide an educational overview of emerging “as-a-service” options for Big Data in the cloud. This is critical background for IT and data profes...
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
SYS-CON Events announced today that Fusion, a leading provider of cloud services, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Fusion, a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including clou...
Most people haven’t heard the word, “gamification,” even though they probably, and perhaps unwittingly, participate in it every day. Gamification is “the process of adding games or game-like elements to something (as a task) so as to encourage participation.” Further, gamification is about bringing game mechanics – rules, constructs, processes, and methods – into the real world in an effort to engage people. In his session at @ThingsExpo, Robert Endo, owner and engagement manager of Intrepid D...
Eighty percent of a data scientist’s time is spent gathering and cleaning up data, and 80% of all data is unstructured and almost never analyzed. Cognitive computing, in combination with Big Data, is changing the equation by creating data reservoirs and using natural language processing to enable analysis of unstructured data sources. This is impacting every aspect of the analytics profession from how data is mined (and by whom) to how it is delivered. This is not some futuristic vision: it's ha...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Learn how IoT, cloud, social networks and last but not least, humans, can be integrated into a seamless integration of cooperative organisms both cybernetic and biological. This has been enabled by recent advances in IoT device capabilities, messaging frameworks, presence and collaboration services, where devices can share information and make independent and human assisted decisions based upon social status from other entities. In his session at @ThingsExpo, Michael Heydt, founder of Seamless...
The IoT's basic concept of collecting data from as many sources possible to drive better decision making, create process innovation and realize additional revenue has been in use at large enterprises with deep pockets for decades. So what has changed? In his session at @ThingsExpo, Prasanna Sivaramakrishnan, Solutions Architect at Red Hat, discussed the impact commodity hardware, ubiquitous connectivity, and innovations in open source software are having on the connected universe of people, thi...
WebRTC: together these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at WebRTC Summit, Cary Bran, VP of Innovation and New Ventures at Plantronics and PLT Labs, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it may enable, complement or entirely transform.
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, showed how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants received the download information, scripts, and complete end-t...
For manufacturers, the Internet of Things (IoT) represents a jumping-off point for innovation, jobs, and revenue creation. But to adequately seize the opportunity, manufacturers must design devices that are interconnected, can continually sense their environment and process huge amounts of data. As a first step, manufacturers must embrace a new product development ecosystem in order to support these products.
Manufacturing connected IoT versions of traditional products requires more than multiple deep technology skills. It also requires a shift in mindset, to realize that connected, sensor-enabled “things” act more like services than what we usually think of as products. In his session at @ThingsExpo, David Friedman, CEO and co-founder of Ayla Networks, discussed how when sensors start generating detailed real-world data about products and how they’re being used, smart manufacturers can use the dat...
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT’s direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Buildi...