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Every properly constructed portfolio will contain securities to generate income.

Yield and Income Newsletterstrives to present you with timely income investment insights from analysts throughout the United States.

Bonds, preferred stocks, real estate investment trusts, or master limited partnerships can be a part of a successful income portfolio

and Yield and Income Newslettergives you the edge.

Equity Strategies

The report did stress that its chartistshighlighted 1,062-5 on the S&P 500 as acritical point and if it breaks, the marketcould fall to 984. This did occur a few daysafter the report was issued.

On the other hand, the chartists believethe Eurostoxx look signicantly healthierthan the S&P 500, which supports CSsrecent upgrade of Continental Europe.

Add it up, and the bank remainedoptimistic at the time on a three- to12-month view. It asserted the marketis too pessimistic on its global macrooutlook. It said valuation looked good,given that the US equity risk premiumis 6.1%.

Also, global earnings revisions are atan all-time high. Investors are still

conservatively positioned we thinkCS added. It noted that mutual fundshave 45% of their total assets in equitiescompared to a long-run average of 51%.Money market funds are still 20% ofmarket cap versus a long-run averageof 18%.v

Strategy/Credit SuisseSecuritiesCredit Suisse has rened its outlook inlight of the turmoil and volatility in thenancial markets in May. After watchingthe S&P 500 drop 8% for the month, CStold clients in its June Sector Snapshotthat it now favors a relatively low beta,defensive-oriented US equity portfolio.

It said it sees 1050 to 1150 as fair valueon the S&P 500 at year-end 2010. Sowe think the 1000 level on the S&P 500represents good value and could be anattractive entry point, it added.

Interestingly, less than a week earlier inits Global Equity Strategy piece sent toclients, Credit Suisse said its year-endtarget remained 1,270 for the S&P 500 and

350 on global MSIC. With one exception,our tactical indicators do not show fullcapitulation, though all the indicators areheading in the right direction, it said inthat report sent to clients.

CONTENTS

Equity Strategies ...1

EMLPs .................3

REITs...................7

Closed-End Funds

....................10

Preferred Stocks

....................12

BondsOnline

PreferredsOnline

YieldandIncome

June 2010 | Volume 4, Issue 6

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EMEA Equity Strategy/

Credit Suisse SecuritiesCredit Suisse also remains bullish on EMEA markets--Europe, Middle East and Africa.

It continues to believe that the performance of EMEAequities in 2010 will resemble that of 2004 in the wakeof the initial 2003 recovery phase in global markets.As a result, the bank has maintained its year-end MSCIEMEA index price target of 360, which offered 11%potential upside from January 1 but now offers 22%.

Absolute valuations appear attractive now to us, the

bank recently told clients in a market note. It pointedout that the emerging market equity risk premium hasticked up to levels not seen since April 2009. v

Strategy/Wells Fargo

SecuritiesWells Fargo recently told its clients the rally in thestock market from the March 2009 low hit its 2010

target in early April. So, it remains long-termpositive, but near term cautious on the economyand the market.

History suggests that after a strong recovery fromrecession, the equity market often pulls back andconsolidates for many months before continuingits advance, it said in a recent report. If thispattern continues to hold, the equity markets couldconsolidate in the months ahead.

It recommends long-term investors who are risk averseand are uncomfortable with their equity exposure maywant to lighten up on equities if the market reteststhe April highs. On the other hand, long-terminvestors with a greater risk appetite may want to useany market weakness during the next several monthsto position for a potential resumption of the marketadvance, it added.

In its recent report to clients, Wells noted that duringthe last week of April, the U.S. equity market movedback up to retest the highs. This shows that themarket has absorbed a fair amount of bad news from

Greek sovereign debt problems, to Chinese tightening,to bad winter weather, it explained.

Now, Wells asserts, the market is heading into aperiod of potential seasonal strength in springtime.Even so, it warned it is still unclear whether themarket can sustain a breakout to even higher highsin the near future.

In order to answer this question, Wells explains you

must look at three factors: the near-term economicfundamentals, the likely response to unexpected newsand the long-term nancial environment.

It did remind clients that history suggests that afterthe strong 80% advance from the March 2009 lowto the April 2010 peak, it would be normal for themarket to give back one third or more of those gainsin a consolidation that could take several months. Byclosing above the February low, the S&P has not yet

entered a full-blown, multi-month correction,it stressed.

However, it did note one indicator that the marketis oversold--the negative sentiment. This could workwell as a good contrary indicator, the bank stressed.When bearish pundits sound most convincing andvery few investors say they are bullish, the market isripe for a change in sentiment that could push pricesup instead, it said.

In addition, the market is due for a consolidationwhen the current correction is complete.

Wells said to keep a close eye on the 1044 level. If theS&P 500 drops below that level, the consolidation islikely to start from a lower level. On the other hand, ifsupport at the February low holds, the market couldrecover over the summer.v

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MLPs/Morgan StanleyMorgan Stanley recently asserted that there has beena disconnect in how MLPs have traded relative to their

credit proxies during the recent volatility and selloffin many nancial markets. While U.S. Treasury andinvestment grade corporates have rallied in a ight torelative safety, MLPs have sold off along with equitymarkets, it noted in a recent report to clients.

As a result, the yield spread of all MLPs compared withthe 10-year Treasury now stands at 403 basis pointsversus an average of just 277 basis points, while thespread to Moodys Baa bonds has widened to 128 basis

points compared with an average of 68 basis points.

We see the current valuation disconnect as a near-termoversold condition in MLPs, Morgan Stanley said, citingthe strategic importance of MLPs maintaining stabledistributions and the relative insulation that many ofthese businesses have from broader economic trends.

It stressed in the report it continues to recommend acautious approach. However, it recommended investors

use this volatility to selectively build positions in highgrowth partnerships: general partners (EPE, BGH),dropdown stories (EPB, WES) and what it calls uniquesecular growth stories (WPZ, RGNC, MWE).

Enterprise GP Holdings L.P.T icker Current Price 52-Week Range Target Price Current Yield

EPE $42.75 $23.46 - 49.62 $52.00 5.00%

Enterprise owns general and limited partner interests ofpublicly traded partnerships engaged in the midstreamenergy industry and related businesses. Currently,investments are held in Enterprise Products Partners,L.P. and Energy Transfer Equity, L.P. and their respectivegeneral partners.

Enterprise Products Partners provides a wide range ofservices to producers and consumers of natural gas,NGLs, crude oil, and certain petrochemicals. In addition,it develops pipeline and other midstream energy

infrastructure in the continental United States and Gulfof Mexico.

Enterprise GP Holdings holds 39 million common units of

Energy Transfer Equity and 34.9% of its general partner.

Diversied holdings provide multiple avenues forgrowth, but inclusion of large LP interests diminishesgrowth multiplier somewhat, Morgan Stanley noted in arecent report.

Buckeye GP Holdings LPTicker Current Price 52-Week Range Target Price Current Yield

BGH $30.65 $18.00 - 35.14 $37.00 5.60%

Buckeye owns and operates one of the largestindependent rened petroleum products pipeline systemsin the United States in terms of volumes delivered; owns67 active rened petroleum products terminals; operatesand maintains 2,400 miles of pipeline under agreementswith major oil and chemical companies; owns a majornatural gas storage facility in northern California; andmarkets rened petroleum products in certain of thegeographic areas served by its pipeline and terminal

operations.

Buckeye owns and controls the general partner ofBuckeye Partners.

Recent cost cutting should provide a boost in 2010,Morgan Stanley said in its weekly report. We believethe majority owners (ArcLight and Kelso) are committedto growing distributions via organic projects andacquisitions.

El Paso Pipeline Partners LPTicker Current Price 52-Week Range Target Price Current Yield

EPB $27.53 $16.53 - 28.87 $31.00 5.50%

The limited partnership was formed by El Paso Corp. toown and operate natural gas transportation pipelines,storage and other midstream assets. Its assets consist ofWyoming Interstate, a wholly-owned interstate pipeline

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Energy Master Limited Partnerships

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transportation business primarily located in Wyomingand Colorado. It also owns a 58% interest in ColoradoInterstate Gas, an interstate pipeline company located inthe Rocky Mountains, a 51% interest in Southern LNG,which owns an LNG storage and regasication terminalnear Savannah, Ga., a 51% interest in El Paso ElbaExpress Pipeline, an interstate pipeline company locatedin Georgia and South Carolina, and a 25% interest inSouthern Natural Gas, an interstate natural gas companylocated in the southeastern United States.

Combined, these businesses consist of about 12,800miles of pipeline and associated storage facilities withaggregate storage capacity of approximately 102 billion

cubic feet.

In its report, Morgan Stanley cited the MLPs strongsponsor support in El Paso Corp. Pipeline assets providestable cash ow with an average contract life of six yearsand 90% capacity demand charges locked in, it added.

Western Gas Partners, LPTicker Current Price 52-Week Range Target Price Current Yield

WES $21.55 $13.22 - 23.95 $26.00 6.10%

Western Gas is a growth-oriented limited partnershipformed by Anadarko Petroleum to own, operate, acquireand develop midstream energy assets. With midstreamassets in East and West Texas, the Rocky Mountains andthe Mid-Continent, the Partnership is engaged in thebusiness of gathering, compressing, processing, treatingand transporting natural gas for Anadarko and otherproducers and customers.

Morgan Stanley noted in its recent report that long-term,90%-plus fee-based contracts provide stable revenue andhedge commodity price risk. Strong sponsor Anadarkoensures longevity of attractive contract structure andsteady growth through acquisitions, it added.

Williams Partners L.P.Ticker Current Price 52-Week Range Target Price Current Yield

WPZ $37.10 $17.10 - 42.75 $47.00 7.10%

Williams is focused on natural gas transportation;gathering, treating, and processing; storage; naturalgas liquid (NGL) fractionation; and oil transportation.The partnership owns interests in three major interstatenatural gas pipelines that, combined, deliver 12% ofthe natural gas consumed in the United States. Thepartnerships gathering and processing assets includelarge-scale operations in the U.S. Rocky Mountains andboth onshore and offshore along the Gulf of Mexico.Williams owns about 84% of Williams Partners, including

the general-partner interest.

Morgan Stanley noted in its report Williams has partiallyunhedged commodity price exposure, but with interestsin geographically diverse set of gathering, treating,processing and pipeline and storage assets. Units couldstill be volatile until broader economic environmentstabilizes, it warned.

MarkWest Energy Partners, LPTicker Current Price 52-Week Range Target Price Current Yield

MWE $28.19 $15.76 - 32.24 $34.00 8.70%

MarkWest is engaged in the gathering, transportation,and processing of natural gas; the transportation,fractionation, marketing, and storage of natural gasliquids; and the gathering and transportation of crudeoil. MarkWest has natural gas gathering, processing, andtransmission operations in the southwest, Gulf Coast,and northeast regions of the United States, including th

Marcellus Shale, and is the largest natural gas processorin the Appalachian region.

Morgan Stanley said in its report MarkWest is wellpositioned geographically for growth, but commodity-sensitive contracts limit cash ow visibility. Marketspremium on stable, long-lived assets could limit furtherrevaluation for processors, it added.

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Energy Master Limited Partnerships continued from page 3

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Regency Energy Partners LPTicker Current Price 52-Week Range Target Price Current Yield

RGNC $22.41 $12.53 - 23.83 $25.00 7.80%

Regency is a midstream natural gas services providerthat specializes in the gathering and processing,contract compression, and transportation of naturalgas and natural gas liquids. Regency focuses onservicing the prolic natural gas producing regionsin the United States. Regencys general partner ismajority owned by Energy Transfer Equity, L.P. (ETE).

In late May, Regency closed on two separatetransactions. Energy Transfer Equity, L.P. (ETE) closed

on the purchase of the general partner interest inRegency Energy Partners LP. In addition, Regencyclosed on the purchase of a 49.9% ownership interestin the Midcontinent Express Pipeline.

Energy Transfer Equity, L.P. acquired a 100% interestin Regencys general partner from an afliate of GEEnergy Financial Services for ETE preferred units witha value of about $300 million. Afliates of GE EnergyFinancial Services retained their 24.7 million limited

partner units in Regency, which represent about 21%of Regencys outstanding limited partner units. ETEowns the general partner of Energy Transfer Partners,L.P. (ETP) and Regency, both of which will operate asseparate publicly traded entities.

In its report, Morgan Stanley singled out Regency forits strong GP in GE Energy Services committed toRGNC through asset dropdowns and nancing. It addedthat it has declining direct commodity price exposure,

most of which is hedged.v

MLPs/BarclaysRegency Energy Partners LP

Ticker Current Price 52-Week Range Target Price Current Yield

RGNC $22.41 $12.53 - 23.83 $25.00 7.80%

Barclays, which has an Overweight rating on the stock,also has a $25 price target for Regency.

We are incrementally positive on the RGNC story postthe RGNC/ETE/ETP announcement, it explained ina recent report to clients. The transaction increasesscale, improves cash ow quality, and accelerates the

timing of reaching investment grade credit metrics.

Down the road, Barclays believes Regency couldcombine with ETP to become a $10 billion MLP.v

MLPs/Stifel NicolausStifel Nicolaus currently rates six MLP stocks as a Buy.

Plains All American Pipeline, L.P.Ticker Current Price 52-Week Range Target Price Current Yield

PAA $57.23 $40.01 - 60.06 $58.50 6.50%

Plains is engaged in the transportation, storage,terminalling and marketing of crude oil, renedproducts and liqueed petroleum gas and othernatural gas related petroleum products. ThePartnership is also engaged in the development andoperation of natural gas storage facilities.

In May, PAA Natural Gas Storage, L.P. completed itsinitial public offering of 13.5 million common unitsrepresenting limited partner interests at $21.50 percommon unit. The partnerships general partner,as well as the majority of the Partnerships limitedpartner interests, is owned by Plains All AmericanPipeline, L.P.

NuStar Energy L.P.Ticker Current Price 52-Week Range Target Price Current Yield

NS $54.05 $50.11 - 64.50 $67.00 7.70%

NuStar Energy has 8,417 miles of pipeline, 82 terminalfacilities, four crude oil storage tank facilities andtwo asphalt reneries with a combined throughputcapacity of 104,000 barrels per day. One of the largestasphalt reners and marketers in the U.S. and thesecond largest independent liquids terminal

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operator in the nation, NuStar has operations in theUnited States, the Netherlands Antilles, Canada,Mexico, the Netherlands and the United Kingdom. Thepartnerships combined system has over 91 million

barrels of storage capacity, and includes two asphaltreneries, crude oil and rened product pipelines,rened product terminals, a petroleum and specialtyliquids storage and terminaling business, as well ascrude oil storage facilities.

NuStar recently announced it reached an agreementwith Denham Capital, an energy- and commodities-focused global private equity rm, to acquireDenhams equity holdings in Asphalt Holdings, Inc.

for $44.1 million. The acquisition is expected to beimmediately accretive to NuStar Energys distributablecash ow per unit. The operations involve the receipt,storage, and distribution of asphalt and crude oil viamarine vessels, barges, tank trucks, and rail cars.

Enterprise Products Partners L.PTicker Current Price 52-Week Range Target Price Current Yield

EPD $32.64 $24.16 - 36.73 $38.50 6.80%

Enterprise is the largest publicly traded energypartnership and a North American provider ofmidstream energy services to producers and consumersof natural gas, NGLs, crude oil, rened products andpetrochemicals. It is managed by its general partner,Enterprise Products GP LLC, which is wholly owned byEnterprise GP Holdings L.P. (EPE).

Duncan Energy Partners provides midstream energyservices, including gathering, transportation,

marketing and storage of natural gas, in addition toNGL fractionation (or separation), transportation andstorage and petrochemical transportation and storage.It is managed by its general partner, DEP Holdings,LLC, which is a wholly-owned subsidiary of Enterprise.

Enterprise Products Partners L.P. and Duncan EnergyPartners L.P. recently announced that AcadianGas LLC has entered into an additional long-termcontract with a shipper to transport natural gas

on Acadians Haynesville Extension pipeline nowunder construction that increases total capacitycommitments by 200 million cubic feet per day.Enterprise also announced that the expansion of its

recently acquired State Line natural gas gatheringsystem serving producers in the Haynesville Shale areaof Northwest Louisiana is scheduled to be completedduring June 2010.

Energy Transer Partners, L.P.Ticker Current Price 52-Week Range Target Price Current Yield

ETP $42.97 $37.75 - 49.99 $48.50 8.10%

Energy Transfer offers two separate publicly-traded

securities on the New York Stock Exchange: EnergyTransfer Partners, L.P. (ETP), a Master LimitedPartnership; and Energy Transfer Equity, L.P. (ETE), aGP MLP. ETP offers greater distribution income butless accelerated growth; ETE offers less distributionincome but faster growth.

Energy Transfer Partners, L.P. has pipeline operationsin Arizona, Colorado, Louisiana, New Mexico, andUtah, and owns the largest intrastate pipeline

system in Texas. ETPs natural gas operations includegathering and transportation pipelines, treatingand processing assets, and three storage facilitieslocated in Texas. ETP currently has more than 17,500miles of pipeline in service and has a 50% interest injoint ventures that have approximately 500 miles ofinterstate pipeline in service. ETP is also one of thethree largest retail marketers of propane in the UnitedStates, serving more than one million customersacross the country.

ONEOK Partners, L.PTicker Current Price 52-Week Range Target Price Current Yield

OKS $58.54 $25.57 - 66.91 $70.00 7.40%

ONEOK Partners, L.P. is one of the largest publiclytraded master limited partnerships, specializing in thegathering, processing, storage and transportation of

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natural gas in the U.S. It also owns a major naturalgas liquids (NGL) system. Its general partner, ONEOKPartners GP, L.L.C., is a subsidiary of ONEOK, Inc.(OKE), a diversied energy company, which owns

42.8% of the partnership. ONEOK is one of thelargest natural gas distributors in the United States,and its energy services operation focuses primarilyon marketing natural gas and related servicesthroughout the U.S.

ONEOK Partners operations are conducted throughthree business segments: Natural Gas Gathering andProcessing, Natural Gas Pipelines and Natural GasLiquids.

MarkWest Energy Partners, L.P.Ticker Current Price 52-Week Range Target Price Current Yield

MWE $28.19 $15.76 - 32.24 $32.00 8.70%

MarkWest is engaged in the gathering, transportation,and processing of natural gas; the transportation,fractionation, marketing, and storage of natural gasliquids; and the gathering and transportation of crudeoil. MarkWest has natural gas gathering, processing,

and transmission operations in the southwest, Gulf

Coast, and northeast regions of the United States,including the Marcellus Shale, and is the largestnatural gas processor in the Appalachian region.v

MLPs/UBSQuicksilver Gas Services LP


KGS $18.12 $12.70 - 23.32 $20.50 8.60%

Quicksilver is a midstream MLP engaged in thebusiness of gathering and processing natural gasproduced primarily from the Barnett Shale formationin the Fort Worth Basin in north Texas.

UBS recently noted in a report that guidance was cut.However, at the same time, it said it believes shares ofthe partnership were oversold.

It stressed the MLPs distribution run-rate remainssteady. And although it recently cut its price targetto $20.50 from $23, UBS said its new target implies a7.8% yield on its rst quarter 2011 target distributionrun-rate. So, it retained its Buy rating, stressing it is

an exception to the rms core rating bands.v

REITs


Ofce-Industrial REITs/

Citi Investment Research &

AnalysisCiti recently noted in a report to clients that therecent correction in REIT stocks has created severalattractive dividend yield opportunities in thesuburban ofce sector. It singled out four companiesit says have above-average yields, generally solidbalance sheets and reasonable valuations.

They include: Mack-Cali Realty CLI), Duke Realty(DRE), Highwoods Properties (HIW) and LibertyProperty Trust (LRY). Mack-Cali and Duke are Buy-rated, and all of the stocks are over-weights in Citis

model portfolio.

Overall, income-oriented investors with a desire toincrease exposure to REITs may choose to focus onthese companies, given our analysis, Citi stated in therecent report.

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REITs continued from page 7

Mack-Cali RealtyTicker Current Price 52-Week Range Target Price Current Yield

CLI $32.40 $21.07 - 38.74 $42.00 5.50%

Mack-Calis ofce property portfolio consists of about32.9 million square feet of primarily ofce and ofce/ex buildings in the Northeast and Mid-Atlantic regions,as well as close to 11 million square feet of land toaccommodate additional commercial development.

Citi points out in its report that the REITs payoutratio of 88% is high, but not unreasonable. CLI iswell positioned for external growth, it adds. Its 2010funds from operations (FFO) estimate of $2.84 is four

cents above consensus and toward the high end ofthe guidance range of $2.70-$2.90.

Duke RealtyTicker Current Price 52-Week Range Target Price Current Yield

DRE $12.01 $7.45 - 14.35 $16.00 5.70%

Duke owns and operates more than 135 millionrentable square feet of industrial, ofce, and medicalofce space in 20 U.S. cities.

Citi says in its report the dividend yield is attractiveand its balance sheet leverage is reasonable on adebt/GAV (gross asset value) basis at 51%. Wecontinue to believe DRE has underappreciated lease-up opportunities in an improving economy, related tolate-cycle development projects delivered in 2006-07,the investment bank adds. It also asserts in its reportthat fundamentals have been holding up betterthan feared, with occupancy increasing in the rst

quarter versus declines at most peers.

Liberty Property TrustTicker Current Price 52-Week Range Target Price Current Yield

LRY $30.73 $20.76 - 36.18 $38.00 6.30%

Liberty owns 78 million square feet of ofce andindustrial space in over 20 markets throughout theUnited States and the United Kingdom.

Citi points out that its dividend yield is one of thehighest in the REIT sector. Although LRY is payingout almost all of its FCF this year, management iscommitted to the dividend and it is supported by

a strong balance sheet, it explains in its reportto clients. It adds that fundamentals appear to bebottoming, particularly on the industrial side, which itbelieves should experience an earlier rebound.

Highwoods PropertiesTicker Current Price 52-Week Range Target Price Current Yield

HIW $29.07 $19.35 - 35.24 $34.00 5.90%

Highwoods provides leasing, management, development,

construction and other services for its properties and forthird parties. At March 31, 2010, the company ownedor had an interest in 378 in-service ofce, industrialand retail properties encompassing approximately 35.7million square feet and owned 581 acres of developmentland. The companys properties and development landare located in Florida, Georgia, Missouri, Mississippi,North Carolina, South Carolina, Tennessee and Virginia.

Citi points out in its report that Highwoods is paying

out almost all of its free cash ow this year, but it issupported by a strong balance sheet with limited near-term maturities or capital commitments. HIWs ability togrow externally and exposure to what could be higher growthmarkets, position the company well vs. peers whensuburban ofce fundamentals recover, the bank adds.v

REITs/UBSExcel Trust


EXL $12.44 $10.77 - 13.72 $14.00 5.90%*

* current price implies a 2011E dividend yield of 5.9%

Excel is a retail focused REIT that targets valueoriented community and power centers, groceryanchored neighborhood centers and freestandingretail properties. It just went public in April.

UBS recently initiated coverage of the stock with aBuy rating and a $14 price target. We view Excel

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Trust as a defensive small cap value play within thestrip center REIT sector, the bank told clients in arecent note. In an environment of uncertainty, Excelis a low-leveraged owner of a stable portfolio of strip

center assets.

It pointed out that only a portion of the ultimatecapital structure is currently invested. So, it stressedthe stock is also partially a proxy for cash. We alsosee modest growth as the company executes on itsacquisition strategy, it added.v

REITs/JPMorgan ChaseJPMorgan recently reiterated its Overweight ratings onat least ve real estate investment trusts.

Brandywine Realty TrustTicker Current Price 52-Week Range Target Price Current Yield

BDN $11.59 $6.38 - 13.57 $13.00 5.20%

Brandywine owns, develops, manages and has ownershipinterests in a primarily Class A, suburban and urbanofce portfolio comprising 346 properties and 35million square feet, including 241 properties and 25.1million square feet owned on a consolidated basis.

JPMorgan recently raised its 2010 and 2011 FFO/share estimates and lifted its price target by a buck,to $13. We expect 2010 to be the bottom of the cyclefor BDN, the bank told clients. So, it assumes anincrease in occupancy of 100 basis points in 2011.

Corporate Ofce PropertiesTicker Current Price 52-Week Range Target Price Current Yield

OFC $38.34 $26.87 - 43.61 $46.00 4.10%

Corporate Ofce Properties acquires and developsproperties which are typically concentrated in largeofce parks primarily located adjacent to governmentdemand drivers and/or in growth corridors. Itfocuses on customer relationships and specializedtenant requirements in the U.S. Government,

Defense Information Technology and Data sectors. Ithas a signicant presence in the Greater Baltimore-Washington, DC region, with expansion into othermarkets including Colorado Springs, San Antonio, and

Huntsville, AL.

Commenting after the REIT hosted investor day,JPMorgan asserted that the REITs identiable growthprospects give the company a unique angle in theREIT space. We continue to like the companysintermediate-term growth prospects, particularlyrelative to the rest of the REIT space, it added in arecent report. The bank noted that OFC trades at a20-25% premium to its ofce REIT peers based on FFO

multiples, and a slight premium to its peers based onAFFO. It also thinks a 10-20% premium to the ofceREIT peer group is warranted when considering OFCsabove-average growth trajectory and its track record ofdelivering top-of-the-pack results.

Piedmont Ofce Realty TrustTicker Current Price 52-Week Range Target Price Current Yield

PDM $18.57 $14.37 - 21.01 $20.00 6.60%

Piedmont specializes in the acquisition, ownership,management, development and disposition of primarilyClass A ofce buildings located in major U.S. ofce marketsand leased primarily to high-credit-quality tenants.Major markets include: Washington, D. C., greaterLos Angeles, the New York metropolitan area, Bostonand Chicago. Since its rst acquisition in March 1998,the REIT has acquired about $5.5 billion and has soldabout $1.1 billion of ofce and industrial properties.

In a recent note to clients, JPMorgan said it wasmaintaining its 2010 FFO/share estimate of $1.62and lowering its 2011 FFO/share estimate by $0.02 to$1.61. The reduction for 2011 is mainly a function ofthe sale of 111 Sylvan Avenue in Englewood Cliffs, NJ.,just across the Hudson River from New YorkCity, for $55 million. It is expected to close later thisyear. It is 100% net leased to Citi at about $16.50 persquare foot, and the lease is set to expire at the end

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Closed-End Funds

of November. Although the deal is likely to be a littledilutive because of the spread between at what ratePDM can redeploy proceeds versus what it currentlyearns, it takes off the table the companys largestnear-term lease expiration, the bank told clients in arecent note.

Douglas EmmettTicker Current Price 52-Week Range Target Price Current Yield

DEI $15.33 $7.75 - 17.83 $19.00 2.60%

Douglas Emmett specializes in the commercial ofceand multifamily property markets of California andHawaii. Its ofce portfolio includes 55 propertiestotaling about 13.3 million rentable square feet, andits multifamily portfolio consists of nine propertieswith a total of 2,868 units. The REITs propertiesare currently located in nine California markets -Brentwood, Century City, Santa Monica, Beverly Hills,Olympic Corridor, Westwood, Sherman Oaks/Encino,Warner Center/Woodland Hills and Burbank.

After the REIT reported strong rst quarter earnings,JPMorgan raised its 2010 and 2011 FFO/share

estimates, also citing lower interest rate assumptions.It also raised its price target to $19 from $17 due tohigher adjusted FFO growth assumptions.

UDRTicker Current Price 52-Week Range Target Price Current Yield

UDR $19.79 $9.06 - 21.82 $18.00 3.50%

As of March 31, 2010, UDR owned or had an ownershipposition in 51,320 apartment homes including 971homes under development.

JPMorgans Overweight rating on this stock is a littlefunky since the shares already trade above the targetprice. However, it recently raised its estimates on theREIT after updating its earnings forecasts to reectrevised same-store growth, development lease-up,and nancing assumptions. Its 2010 estimate now

sits slightly above the high end of 2010 guidancelast provided by management at the fourth-quarterearnings result, reecting what we see as ongoingimprovement in underlying fundamentals, the banktold clients in its recent report.

JPMorgan noted that the fundamental improvementin the apartment business is happening faster thanexpected. We like the stock relative to its peersbecause we think its core trends and growth rate in

the next couple of years should keep up with thebetter names in the space, yet the stock trades about10% cheaper, it noted.v


Closed-End Funds/StifelNicolausIn its monthly report to clients, Stifel recently urgedinvestors to review their closed-end fund investmentscarefully in light of the recently volatility in theoverall markets. It reminded its clients that funds thatmake use of leverage will likely be more volatile thancomparable unleveraged funds.

At the same time, Stifel recently raised its rating onfour funds. Three of them are covered call funds.

BlackRock Dividend Achievers TrustTicker Current Price 52-Week Range Prem/Disct. Current Yield

BDV $8.80 $ 0.91-9.63 -6.58% 7.28%*

*Based on calculation by Stifel Nicolau

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Closed-End Funds continued from page 10

BlackRock Dividend Achievers Trust is a coveredcall fund. Stifel explains that its portfolio consistsof two parts: a long-equity stock portfolio andan options portfolio. The trust owns a diversiedportfolio of end-paying stocks. The funds managershad previously selected stocks based on the DividendAchievers Index. Companies within the index hadraised their dividends to shareholders for at least 10consecutive years, according to Stifel.

The second part of the investment strategy involvesthe use of option contracts. BDV uses optionpremiums in order to enhance distributions to itsshareholders, Stifel explains. The options typically

mature within three months.

The way Stifel calculates it, the fund yields closer to7.28 percent, even though it is quoted elsewhere at3.29%.

Nuveen Equity Premium Opportunity FundTicker Current Price 52-Week Range Prem/Disct. Current Yield

JSN $12.40 $10.38-13.84 -4.02% 10.89%*

*Based on calculation by Stifel Nicolaus

JSN is also a covered call fund that consists of twoparts: a long-equity stock portfolio and an optionsportfolio. The trust owns a diversied portfolio ofdividend-paying stocks. Stifel explains that thesecond part of the investment strategy involvesthe use of option contracts to enhance income fordistribution to its shareholders. The trust wrote 75%of its calls on the S&P 500 and 25% of its calls onthe NASDAQ 100, which covered about 100% of its

notional portfolio value, according to the report.Stifel recently upgraded its rating on the sharesto Buy from Hold. It calculates the funds yield at10.89% versus 1.57% elsewhere.

Nuveen Equity Premium Income FundTicker Current Price 52-Week Range Prem/Disct. Current Yield

JPZ $12.35 $10.10-13.75 -3.36% 10.20%*

*Based on calculation by Stifel Nicolau

JPZs portfolio consists of a long-equity stockportfolio and an options portfolio. The stock portfoliois concentrated on dividend-paying stocks. Stifelexplains JPZ utilizes option contracts in order toenhance income for distribution to its shareholders.It adds that the trust wrote calls on the S&P 500,sufcient to cover about 100% of its notional portfoliovalue, as of April 30, 2010. The options typicallymature within 40 days. Stifel explains that the trust

writes the calls between 1.5% and 2.5% in-the-money.

Stifel upgraded the shares to Buy from Hold andgures it yields 10.20% versus 2.40 as calculated byother sources.

Claymore Dividend and Income FundTicker Current Price 52-Week Range Prem/Disct. Current Yield

DCS $12.96 $9.57-15.97 -15.24% 3.70%

About 78.9% of the funds assets are invested incommon stocks and 16.7% invested in corporatebonds. The fund currently yields 3.11% on its shareprice and 2.61% on its NAV. We believe the vastmajority of the funds distributions will be comprisedof qualied dividend income, Stifel said in a recentreport. The fund has loss-carry forwards that areseveral times larger than the managed assets of thefund. We therefore believe it is highly unlikely thatthe fund will distribute any capital gains for the

foreseeable future, Stifel added. It recently raised itsrating on this fund from Hold to Buy.v

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Preferreds/UBS Wealth

Management

Preferred securities have experienced equity-likevolatility during the recent correction owing totheir high concentration to both US and Europeannancials. In Europe, concerns are rooted in theadverse effects that the sovereign debt situationcould have on the European banking system. Thisshows that preferreds remain susceptible to equityrisks despite our view that they were likely to behavemore like long-maturity xed income instrumentsfollowing the crisis.

Preferred Stocks

UBS anticipates a high correlation among riskassets to continue, and is reducing its allocation topreferreds from moderate overweight to neutral. Inan environment of heightened macro and regulatoryrisk factors centered on Financials, we believe thatthe prices of preferred securities are likely to remainvolatile.It recommends high coupon trust preferreds pricedbelow par. Certain US banks have trust preferredsoutstanding with coupons in the 7% to 8% range.We view these securities priced below par asattractive given the uncertainty regarding the USnancial reform legislation.v
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