Dear Mr. Berko: Like many retirees, we need to increase our income, which for years came from 4 and 5 percent yields on our certificates of deposit. We’re 75 and 78, and four years ago, we had $570,000 in CDs, paying us over $2,000 a month. But since 2011, we’ve had to invest in stocks I never heard of and take chances. For example, I bought Prospect Capital, which you recommended. I bought 900 shares at $10.61 in early July because it pays 13 percent and because you said the dividend is safe. I sure hope so. We have 11 other issues, four that you have recommended, yielding between 6 and 10 percent, but they make us nervous.
Our neighbor just bought 600 shares of Seadrill at $27 because he said it pays $4 and yields 11.1 percent, according to Yahoo Finance. I looked it up and did the math, and Seadrill yields 15.7 percent, but I’m uncomfortable contradicting him. Did Seadrill increase the dividend? If so, what do you think of this stock, because even if it’s just 11.1 percent, the dividend is pretty good?
— NR, Port Charlotte, Fla.
Dear NR: The weed-smoking, sandaled sad sacks who manage Yahoo’s financial portal couldn’t find a burning candle in a dark room, even if they were sober. Investors can get their tutus in a twist relying on financial data from Yahoo, which are too often out-of-date, stale and incorrect. This must be embarrassing for advertisers on Yahoo’s sites. It’s certainly one reason Yahoo can’t increase advertising revenues.
Still, your neighbor was partly right. Seadrill, now $25, does pay a $4 dividend, but as you say, it yields 15.7 percent. However, many observers believe it’s iffy because the price of oil may be coming down. But the decline in Seadrill (SDRL), from $48 last fall, suggests potential above-average appreciation over the next 24 months.