KIO: No Assurance From Future Dividend Trims
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The KKR Income Opportunities Fund (KIO) offers a high yield of nearly 11% but has a history of gradual dividend cuts. It invests in high-yield corporate securities and leveraged loans, which are below investment-grade or unrated. Economic disruptions pose risks to its portfolio, necessitating a major NAV discount for a safe investment.
December 18, 2024 | 1:30 pm
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KKR Income Opportunities Fund (KIO) yields nearly 11% but has a history of dividend cuts. It invests in high-yield, below investment-grade securities, posing risks during economic disruptions. A major NAV discount is needed for a safe buy.
KIO's high yield is attractive, but its history of dividend cuts and investment in risky securities make it vulnerable to economic disruptions. This increases the likelihood of further dividend cuts, negatively impacting the stock price.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100