Dear Mr. Berko: I have $63,000 to invest in five high-yield stocks that you think have good long-term potential. Please don’t recommend closed-end funds or exchange-traded funds, which seem to be the only things, along with annuities and mutual funds, that stockbrokers suggest today. (Why is that?)
— W.O., Vancouver
Dear W.O.: Brokers are trained as salesmen, not analysts. And the firms they work for measure a broker’s success by the commissions the salesmen bring in, not by how well clients’ accounts perform. It is easier and takes less time to sell closed-end funds and exchange-traded funds, basically mutual funds, than individual stocks. If a CEF or ETF doesn’t perform, the brokster blithely blames management, then quickly moves you to another CEF or ETF.
• W.P. Carey (WPC-$62.38) is an impressive international equity real estate investment trust that provides long-term sales and leasebacks, plus build-to-suit projects, for companies around the globe. The 6.34 percent dividend has been increased every year since inception in 1998, and in the past 12 months, WPC has traded between $51 and $72. Revenues and earnings will be off slightly in 2017. However, management expects to increase the dividend this year, which is one of the reasons Vanguard, BlackRock, Fidelity and Goldman Sachs own millions of shares.
• Sunoco (SUN-$29.89) is a growth-oriented master limited partnership distributing Sunoco-brand motor oil and fuel to about 7,000 convenience stores, independent dealers, commercial customers and distributors, and operating 1,340 fuel sites and convenience stores. SUN’s operations span 30 states, and management intends to open 35 to 40 new convenience stores each year. SUN is the largest independent gas marketer in Hawaii and owns an extensive wholesale fuel distribution network there. The shares yield 11.17 percent, and a recent report by Credit Suisse is bullish on this $14 billion-revenue company.
