Stock Analysis & Valuation Putnam Master Intermediate Income Trust (PIM)

• Previous Close: $3.31
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	176.52	5234
Intrinsic value (DCF)	5.00	51
Graham-Dodd Method	5.76	74
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Putnam Master Intermediate Income Trust (NYSE: PIM) is a closed-end fixed income mutual fund managed by Putnam Investment Management, LLC, focusing on U.S. fixed income markets. Launched in 1988, the fund invests in diversified sector bonds, benchmarking its performance against the Barclays Capital Government/Credit Bond Index. As part of the Financial Services sector, PIM provides investors with exposure to intermediate-term income-generating assets, catering to those seeking stable returns in the fixed income space. With a market cap of approximately $159 million, PIM operates in the Asset Management - Income industry, offering a strategic investment vehicle for income-focused portfolios. The fund’s disciplined approach to bond selection and risk management positions it as a reliable option in the intermediate-income segment.

Investment Summary

Putnam Master Intermediate Income Trust presents a niche opportunity for fixed income investors, particularly those targeting intermediate-term bonds with diversified sector exposure. The fund’s low beta (0.309) suggests lower volatility relative to the broader market, appealing to risk-averse investors. However, its modest market cap and lack of reported EPS or operating cash flow data may raise concerns about scalability and transparency. The absence of debt is a positive, but the fund’s reliance on bond market performance makes it sensitive to interest rate fluctuations. Dividend-seeking investors may find the $0.286 per share dividend attractive, but further due diligence on yield sustainability is advised.

Competitive Analysis

Putnam Master Intermediate Income Trust competes in the crowded fixed income fund space, where differentiation hinges on yield stability, credit quality, and expense ratios. Its benchmark alignment with the Barclays Capital Government/Credit Bond Index provides a standardized performance measure, but the fund’s smaller AUM ($159M) limits economies of scale compared to larger peers. PIM’s competitive edge lies in Putnam’s established asset management expertise, though its niche focus on intermediate-term bonds may limit appeal versus broader or ultra-short duration funds. The fund’s lack of leverage (zero debt) reduces risk but may also cap returns in a rising rate environment. Competitors with larger AUMs often benefit from lower expense ratios and greater liquidity, posing a challenge for PIM’s market positioning.

Major Competitors

• PIMCO Corporate & Income Opportunity Fund (PTY): PTY, managed by PIMCO, is a larger ($1.2B AUM) and more diversified fixed income fund with a focus on corporate and opportunistic credit. Its higher yield and active management strategy attract income investors, but its use of leverage increases risk compared to PIM’s unleveraged approach.
• PIMCO Dynamic Credit Income Fund (PCI): PCI offers exposure to dynamic credit strategies, including non-traditional sectors. With $1.5B AUM, it outperforms PIM in scale but carries higher volatility due to its flexible mandate. PIM’s intermediate-term focus provides more predictable cash flows.
• Nuveen AMT-Free Quality Municipal Income Fund (NEA): NEA focuses on tax-exempt municipal bonds, appealing to tax-sensitive investors. Its $3.1B AUM and Nuveen’s municipal bond expertise give it an edge in its niche, but PIM’s corporate bond focus offers higher yields for taxable accounts.