AVK Stock: A 12% Yield & 22 Years of Uninterrupted Monthly Dividends
June 30, 2025
A Nice Monthly Payout for Income Investors
Let’s be honest; finding dependable income in today’s market isn’t easy. Interest rates are all over the place. Stock prices go up one day and tank the next. Bond yields aren’t what they used to be. And if you’ve been chasing dividend stocks, you’ve probably noticed A few things: many companies have low yields and some are cutting or outright freezing their dividends.
That’s why there’s a corner of the stock market I think income investors should pay close attention to: closed-end funds (CEFs), like the Advent Convertible and Income Fund (NYSE:AVK).
Why bother paying attention to AVK stock?
Because AVK does something most dividend stocks and funds don’t: it pays a consistent monthly dividend, and it has done so for over two decades.
AVK stock offers stability, predictability, and yields that are hard to ignore for income investors. Obviously, there are some risks in owning the stock as well, but more on this later…
What Does Advent Convertible and Income Fund Do?
As mentioned earlier as well, Advent Convertible and Income Fund is a CEF. A CEF is a managed pool of income‑producing securities, aimed at delivering steady cash flow and capital upside. This kind of fund invests in convertible securities and high-yield, non-convertible income securities.
Think of convertible securities as bonds that pay interest but can be converted into stock. This can help an investor participate in the upside of the underlying stock. High-yield income securities are essentially higher-risk bonds, and these bonds tend to pay higher-yield yields.
In addition to this, Advent Convertible and Income Fund uses leverage to amplify returns. (Source: “Overview,” Guggenheim Investments, last accessed June 25, 2025.)
AVK Stock’s Greatest: A Consistent Monthly Dividend
Here’s the best part: AVK stock pays $0.1172 per share every single month. That’s amounts to roughly $1.41 per share annually, or a dividend yield of close to 12%.
Put simply, a $10,000 investment pays around $1,200 per year—delivered like clockwork in 12 monthly installments.
Take a look at the track record of AVK stock’s distribution: it’s impressive. This CEF has been paying investors since 2003. That’s over 270 months! It has made a payout each month, even during the financial crisis of 2008–2009 and the COVID-19 pandemic.
It’s also worth noting that the payout that comes from AVK stock essentially comes from three “pools.”
Here’s a breakdown:
- Net investment income—that’s the income that bonds and convertible securities actually earn
- Realized capital gains—this is profits from selling assets
- Return of capital (ROC)—this is your own capital coming back to you as a “dividend”
Why does this matter?
It can have different tax implications.
For instance, in May 2025, the fund said that 29.95% of this distribution would currently be classified as income and 70.05% of this distribution would currently be classified as return of capital. (Source: “AVK 19A-1 Letter May 2025,” Guggenheim Investments, last accessed June 25, 2025.)
Chart courtesy of StockCharts.com
Risks of Owning AVK Stock
While the income is great, there are a few risks when it comes to AVK stock as well. It’s important that income investors know their risks, because it can make their investment decisions easier.
Since Advent Convertible and Income Fund takes leverage—i.e. borrows money to generate higher returns—a volatile environment could hurt it, with the potential to quickly amplify losses as well.
In addition to this, the portfolio held by the CEF is highly reactive to interest rates. Bond prices and yields change as overall interest rates change. So, if interest rates climb, Advent Convertible and Income Fund could suffer.
Lastly, AVK stock generally trades below its net asset value (NAV). This essentially means that investors value the Advent Convertible and Income Fund lower than its true worth. This indicates some risk aversion, so in a time of volatility, this discount from the NAV could grow.
The Lowdown on AVK Stock
AVK stock delivers exactly what it promises: high monthly dividends, paid without missing a beat since 2003. For income investors, it’s certainly a potent income tool, but it comes with greater risk.
AVK stock investors do receive a higher yield, but there’s leverage and interest-rate sensitivity involved as well.
Also, don’t think of this as a growth stock where there will be massive capital appreciation and the stock price will double, triple, or more soon.
As per the most recent data, close to 34% of all outstanding shares are held by institutional investors. SIT Investment Associates, Inc., Raymond James Financial, Inc., and Penserra Capital Management LLC are the biggest holders of AVK stock. (Source: “Holders,” Yahoo! Finance, June 25, 2025.)
