Actionable news
0
All posts from Actionable news
Actionable news in MSFT: Microsoft Corporation,

Opinion: $80 billion mutual fund uncovers opportunities in tech stocks, junk bonds

Microsoft is the second-largest stock holding of the Franklin Income Fund, which was started in 1948.

The manager of one of the largest and oldest income mutual funds in the U.S. has discovered a new area for attractive dividends: technology stocks.

Ed Perks, Franklin Templeton’s chief investment officer of equity, is the lead manager of the Franklin Income Fund FKINX, +0.00% The fund has nearly $80 billion in assets, and its main objective is to provide monthly income to its shareholders, using what Perks described in an interview as a “dynamic approach.”

The fund was established in 1948. Its 30-day yield is 3.90%, according to Morningstar, although the monthly distributions mean the yield can fluctuate significantly, according to Perks. The 30-day yield is the standard yield calculation used by bond funds.

Ed Perks, portfolio manager of the Franklin Income Fund.

The fund had 474 investment positions as of Sept. 30, including 162 bonds, 46 convertible securities and 72 equities. Here’s a broad look at the fund’s allocation as of that date:

Here are the fund’s top five stock holdings as of Aug. 31:
Company Ticker Dividend yield Total return - 12 months Price/ consensus 2017 EPS estimate Price/ consensus 2016 EPS estimate - Oct. 11, 2015
Royal Dutch Shell PLC ADR RDS.A, -0.65% 6.24% -1% 13.5 13.1
Microsoft Corp. MSFT, +0.14% 2.73% 25% 19.7 17.5
Target Corp. TGT, +0.40% 3.51% -11% 12.8 15.3
Coca-Cola Co. KO, -0.19% 3.37% 2% 20.8 20.0
BASF SE ADR BASFY, -0.47% 2.76% 9% 15.8 12.8
Source: FactSet, as of the close on Oct. 11

Dividend-stock opportunities in the technology sector

Perks said it was “a lot easier” to find attractively priced dividend stocks in the technology sector than in the four sectors — consumer staples, real estate investment trusts, telecommunications and utilities — that yield-hungry and volatility-averse investors have focused on this year. He said he...


More