BlackRock Science and Technology Trust (BST) Stock

BlackRock Science and Technology Trust offers an attractive 8% dividend yield by selling investments periodically and by using option strategies. BST primarily invests in tech companies, with significant exposure to semiconductors, software, and tech hardware, providing high-tech sector returns. Managed by BlackRock, BST offers income investors a high dividend yield compared to low-yield tech ETFs like Invesco QQQ Trust (QQQ).

Despite recent declines, the Dividend Harvesting Portfolio remains profitable, generating $1,908.79 in forward dividend income with a 23.38% return on invested capital. I believe the Fed's rate cuts are misplaced, and lower rates are needed to reduce housing costs and further curb inflation. I am bullish on 2025, expecting the portfolio to generate between $2,500-3,000 in dividend income, driven by reinvestments and weekly allocations.

The BlackRock Science and Technology Trust (BST) offers an 8% yield, trading at a -7.72% discount to NAV, and is poised for capital appreciation. With interest rates declining and a pro-business administration, 2025 is expected to continue 2024's bullish trend, benefiting BST's underlying holdings. Despite BST's underperformance compared to the S&P 500, its lucrative distribution and exposure to big tech make it attractive for hybrid investors seeking income and growth.

BST's dual mandate of growth and income via covered call writing and a managed distribution plan has led to underperformance, lagging the NASDAQ by 9% YTD. The fund's 8% "dividend yield" is misleading, as it relies on option writing and capital returns, limiting upside and hindering long-term growth. Portfolio changes show increased concentration and a significant rise in Nvidia's weight, highlighting active management's inconsistency compared to passive index trackers.

An 8%+ yield may look attractive initially, but fundamental flaws emerge upon reviewing the fund's financial statements and distribution history. Management has incurred losses on options writing. Return-of-capital distributions and a negative CAGR indicate subpar portfolio management practices. BST has underperformed in terms of capital appreciation compared to other tech-focused ETFs like QQQM. Better alternatives exist, such as STK.

Technology evolves rapidly, presenting both opportunities and challenges for investors. Tech companies tend to grow the fastest, but they also fail the fastest; gullible investors can quickly be outpaced, overwhelmed, and burned. We discuss two income-focused picks with up to 8% yields to benefit from all the tech innovation and growth.

BST is a closed-end fund that primarily invests in Science and Technology companies that have the potential to provide rapid and sustainable growth. Besides growth potential, currently, the fund yields an attractive 8.3%, making it a good investment for income investors. We would rate the fund as a 'hold' for existing owners and a 'buy' for new investors. However, the new buyers should use dollar-cost-averaging to avoid the risk of buying near the top.

BlackRock Science and Technology Trust offers tech exposure with an 8.4% yield through an option writing strategy, focusing on tech stocks with AI growth potential, including Nvidia. The fund has a triple mandate: current income, short-term, and long-term capital gains, achieved by selling call options. Trading at a 5% discount to NAV, BST presents an attractive buying opportunity, offering potential capital returns and a healthy yield.

The BlackRock Science and Technology Trust offers an attractive 8.5% yield by investing in tech and science assets, utilizing covered call options. BST's portfolio is heavily weighted in semiconductors and large-cap stocks, with a significant portion overwritten with covered call options. BST's 2024 distributions were entirely from long-term capital gains, with no Return of Capital, offering a tax deferral advantage.