This ‘Buffett Favorite' Dividend Is An Incredible CEF Bargain (For Now)

Core Viewpoint - The article highlights the investment potential of the SRH Total Return Fund (STEW), which, despite its lower dividend yield of 3.8%, has demonstrated strong total returns that surpass many higher-yielding closed-end funds (CEFs) [3][4]. Group 1: Fund Performance - STEW has doubled an investor's money over the last five years, outperforming the S&P 500, which increased by approximately 103% during the same period [4]. - The fund employs a value-investing strategy inspired by Warren Buffett, contributing to its lower volatility and long-term value appreciation [5]. Group 2: Investment Strategy - The largest investment in STEW is in Berkshire Hathaway, constituting about 45% of the fund's assets, alongside other high-quality firms like JPMorgan Chase, Enterprise Products Partners, and Microsoft [6]. - STEW focuses on underpriced stocks, which aligns with its value-investing approach [6]. Group 3: Valuation and Discounts - STEW currently trades at a discount to its net asset value (NAV) of just under 20%, which is significant for a CEF [9]. - The discount has widened over the past five years, despite the fund's strong performance, indicating market inefficiency that is expected to correct as more investors recognize its value [9][10]. Group 4: Dividend Growth - Although the 3.8% dividend yield is considered low for a CEF, the fund has experienced a 62% increase in its payout over the last five years, with recent acceleration in dividend growth [11]. - This growth in dividends, combined with the fund's discount and performance history, makes STEW an attractive investment option [11].