RQI: Attractive Distribution And Enticing Discount

Summary

• The current discount of RQI as of closing on Friday is 13.16%, which isn't a level seen since early 2019.
• This recent market correction has also propelled RQI to a distribution rate of 10.77%.
• RQI is once again back in my portfolio at almost a full position and considered one of my core holdings.
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Co-produced by Stanford Chemist

Cohen&Steers Quality Income Realty Fund (NYSE:RQI) has recently released its updated Annual Report for the full year ended 2019. We know that the fund had much success for that year. So much so that the managers had gone ahead with a rights offering to expand the size of the overall fund. This led to an initial plunge in the share price. Little did they know, or anyone know, the deal would get even sweeter just a couple of short weeks later.

This came in the form of the coronavirus fears spreading the panic of a pandemic. Certainly, the coronavirus will have an impact on the short-term global economy as supply chains grind to a halt. Shares of RQI collapsed along with the rest of the market. I believe this is a good time to be picking up shares at these levels. This is exactly what I did in the final week of February. Although, there certainly could be even cheaper prices in store the longer that a vaccine is unavailable for COVID-19. It would make sense, as the longer the world goes without a cure, the more economic damage that can resume unabated. Though there certainly is hope as China has had a slowdown in confirmed cases.

With that being said, a positive for RQI is that it is relatively sheltered from international exposure. The fund remains invested in companies that operate with almost all of their operations right in the U.S.A. In fact, its latest Fact Sheet puts geographic 'diversification' at 100% U.S. I'm certainly not advocating for no international exposure in an investor's overall portfolio, though historically speaking, the U.S. generally offers greater stability.

RQI had been a core holding in my portfolio and I didn't expect to sell out of it for a

Analyst’s Disclosure:I am/we are long RQI. 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.

This article was originally released on March 1st, 2020 to members of the CEF/ETF Income Laboratory.