Adams Diversified Equity FundNYSE: ADX

BALTIMORE, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Adams Diversified Equity Fund, Inc. (NYSE: ADX) declared today a year-end distribution of $1.96 per share. The total distributions by the Fund for 2024 will be $2.50 per share, including the distributions totaling $0.54 per share made in 2024 prior to today's announcement. The annual distribution rate represented by these distributions is 10.9%.

Usually, investors can access high yields with limited growth prospects, or relatively low yields with stronger and close to or even above double-digit income growth potential. However, in some instances, by being very selective and thoroughly assessing the fundamentals, it is possible to identify investments that offer both components. In this article, I share two picks, which provide decent yields with strong income growth potential.

For income investors, closed-end funds, or CEFs, remain an attractive investment class that covers various asset classes and promises high distributions and reasonable total returns. CEFs are generally characterized by higher volatility and deeper draw-downs than the broader market. For these reasons, they are not suited for everyone. In this monthly series, we highlight five CEFs with solid track records that pay high distributions and offer “excess” discounts. We try to separate the wheat from the chaff using our filtering process to select just five CEFs every month from around 500 closed-end funds.

BALTIMORE, Oct. 17, 2024 (GLOBE NEWSWIRE) -- Adams Diversified Equity Fund, Inc. (NYSE: ADX) today announced the Fund's results for the nine months ended September 30th. The total return on Adams Diversified Equity's net asset value, with dividends and capital gains reinvested, was 21.3%. Comparable figures for the S&P 500 and the Morningstar U.S. Large Blend category were 22.1% and 20.4%, respectively. The total return on the market price of the Fund's shares for the period was 24.9%.

Income investors often favor value investments like midstream infrastructure, equity REITs, and blue-chip cash cows for yields between 5% to 8%. Long-term alpha-like returns are unlikely with these assets, but they offer stable income streams that are suitable for defensive retirement portfolios. Some investors might, however, want to combine high yield with growth-like exposure.

Using diversified funds to gain wide exposure and strong income can be a winning income strategy. One of our picks gives exposure to REITs which are primed to strongly benefit from rate cuts. The other pick has over half a century of strong returns and NAV appreciation.

In the trading world, having the right tools and knowing how to use them correctly can be the difference between success and failure. One such tool is the Average Directional Index (ADX), which is acknowledged as a fundamental indicator for assessing the strength and direction of market trends.

The Adams Diversified Equity Fund has been operating since 1929, offering consistent distributions with a current yield of 6.28%. ADX has historically delivered returns in line with or exceeding the S&P 500, generating slight alpha over the broader market. The investment case for ADX centers on accessing S&P 500-like risks and returns, with primary returns driven by distributions rather than price appreciation.

The broader equity market saw declines in early August but ended near all-time highs to finish off the month. I put some capital to work this month at the low, but not as much as I had planned initially, as the market swiftly recovered. Most of the moves this month were corporate action-driven events, primarily the BlackRock tender offers, as we finished up the first measurement period.