John Hancock Premium Dividend Fund - Reliable High Monthly Income Plus Growth

Thomas Cook profile picture
Thomas Cook


  • The John Hancock Premium Dividend Fund has been a reliable source of generous monthly dividends since 1990.
  • Investors have bid the share price up to a 12.54% premium over the net asset value.
  • PDT is a good long term income investment opportunity but HTD provides virtually the same benefits without the hefty premium.

The John Hancock Premium Dividend Fund (NYSE:NYSE:PDT) is a closed end fund that "seeks to provide high current income consistent with modest growth of capital” according to the fund manager. The fund opened in December 1989 and has paid monthly dividends every month since February 1990. Total assets are $1.1 billion and net assets are $747 million. The expense ratio is 1.52%. The fund utilizes 34% leverage to enhance yield, which also increases expenses, volatility and interest rate sensitivity. As of 8/5/2019 the fund share price is $17.32 and the yield is 6.79% based on the monthly dividend of $0.098 per share. The fund utilizes a managed distribution policy which means that the fund managers establish a regular monthly dividend amount based on forecast fund earnings. In addition to the monthly dividends the fund paid an extra capital gain dividend every December since 2002.

The fund holds 112 issues comprised of 50% preferred stocks, 39% common stocks and 11% corporate bonds. The fund is most heavily invested in Utility companies, followed by Financials, Energy, Communications Services, and Real Estate companies. The common stocks in the portfolio provide an opportunity for the fund to grow investor’s capital. The nations of issue are 86.4% USA, 6.1% UK, 3.2% Canada, and the remainder from a few western European nations.

PDT Portfolio Composition Chart

PDT Sector and Top Ten Holdings Chart as of 4/30/2019

Preferred Stocks

Preferred stocks can be a very reliable source of dividend income. Preferred stocks are issued with a stated dividend amount and payment frequency and they can be cumulative or non-cumulative. Cumulative Preferred stocks impose a restriction that the issuing company cannot pay any dividend to regular shareholders unless all of the dividends that are due to the preferred shareholders have been paid. Cumulative preferred stocks issued by companies that have a long uninterrupted history of paying dividends to shareholders are an extremely reliable source of

This article was written by

Thomas Cook profile picture
Thomas is a financial analyst with experience analyzing financial statements and reviewing investment portfolios of regulated financial institutions. He focuses on long term investments that provide reliable growing dividends and capital appreciation.

Disclosure: I am/we are long HTD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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