PGZ: A Contrarian Play On Commercial Real Estate With An 8.8% Yield (NYSE:PGZ)

Author’s note: This article was released to CEF/ETF Income Laboratory members on Sept. 28, 2020 with certain numbers updated. Please check latest data before investing.

This month, I’d like to take a look at Principal Real Estate Income Fund (PGZ), the top ranked DxYxZ fund (and frequent entrant) in our latest “High-High-Low” report.

As of Oct. 7, PGZ exhibited an attractive -24.78% discount with a -1.9 z-score. At the time of publication of our “High-High-Low” report, PGZ sported a a 12.10% yield that was 98% covered. However, the fund just announced a reduction in its monthly distribution from $0.11 to $0.08/month for the next three months, starting from November. This lowers the forward yield to 8.81% with a concomitant NAV yield of 6.63% as of the latest prices.

PGZ has come up in the chat several times recently as a possible high-risk/reward contrarian play, but we haven’t had a dedicated

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