The Bond God’s 5 Favorite Yields (Up to 8.6%)

Brett Owens, Chief Investment Strategist
Updated: May 24, 2017

When the “Bond God” Jeffrey Gundlach speaks, yield hounds listen. And earlier this month, the preeminent income investor on the planet shared his favorite stock idea with a private audience.

I’ll share the specifics on his recommendation in a moment, including the exact “pair trade” that Gundlach likes. But first, let’s recap why we care what he says.

His Profitable Contrarian Calls

When Gundlach speaks, he often takes heat from his peers and the media because his calls run contrary to popular belief. But he’s usually right – and profitable:

  • In 2007, he warned investors to get out of subprime mortgages just before the credit markets melted down.

Read more

The Bull Market in CEFs: Why It Really Is Different This Time

Michael Foster, Investment Strategist
Updated: May 23, 2017

Closed-end funds are absolutely crushing the S&P 500.

So far in 2017, the SPDR S&P 500 ETF (SPY) is up 7.8%, including dividends. That’s impressive considering the geopolitical calamities, unpredictable moves from the White House, economic uncertainty and rising interest rates the market is facing.

But what’s even more impressive is that over 200 closed-end funds (CEFs) are up even more than that.

Let’s take a look at our new CEF Insider research service’s proprietary Total CEF Index.

Of the 500 funds it covers, almost half (229) are beating the S&P 500 so far in 2017. And it’s hard to nail down a common thread that ties them all together.…
Read more

The 3 Worst Mistakes CEF Investors Make (and How to Avoid Them)

Brett Owens, Chief Investment Strategist
Updated: May 22, 2017

Most folks buy closed-end funds for one reason: big yields!

But that’s not the only reason—and depending on your situation, it may not even the best reason for you, as I’ll show you shortly. (I’ll also reveal 3 tricky, but easily avoidable, blunders many folks make with CEFs).

First, there’s no doubt CEF payouts are legendary.

According to BlackRock’s latest quarterly update, dividend yields range from an average of 2.25% in the lowest-paying CEF sector (emerging market equity) to 9.9% in the highest paying (municipal-bond funds). (The muni-bond fund yield is on a tax-equivalent basis and based on a 43.4% tax rate, as munis are exempt from federal income tax):

A Rich Hunting Ground for Yield Fans

Source: BlackRock Closed-End Fund Market Review, March 2017

When you take these sectors and average them out, you get a gaudy 7.8% payout!…
Read more

7 High Tech Dividends up to 14%

Brett Owens, Chief Investment Strategist
Updated: May 20, 2017

Income investors often ignore the technology sector. That’s a shame, because tech stocks have been one of the best sources of dividend growth over the past few years.

Plus, some familiar names now pay substantial yields. In fact, in just a minute, I’ll introduce you to seven tech stocks that offer payouts into the mid-double digits!

But first, let’s talk about the biggest income mistake that countless investors are making right now.

Most first-level thinkers pile into “defensive” stocks like consumer staples and utilities. Unfortunately, while most of these companies do offer secure dividends, they don’t offer much upside.

And investors who “don’t care because they’re in it for the dividends” end up with payout raises that severely lag those lavished upon tech investors:

Utilities and Staples: Two “Safe” Ways to Underperform

Since this time 2009, the Technology Select Sector SPDR (XLK) has seen its nominal dividend well more than double – a nearly 155% increase that not only dwarfs dividend mainstays like utilities (XLU) and consumer staples (XLP), but trumps the S&P 500 itself by half!…
Read more

3 Unloved REITs To Buy With 30% Upside

Bill Stoller, REIT Analyst
Updated: May 19, 2017

Contrarian investors have been handed a gift this week by Mr. Market — an opportunity to buy high-quality dividend growth names on sale at multiyear lows.

Editors and financial writers clearly love “Retail Apocalypse” and “Zombie Mall” headlines. These sensational articles spin the facts to reinforce a story that attracts enormous page views — so expect to see a lot more of them.

We all know many department stores are struggling and some malls are on life support. This isn’t exactly breaking news. It was highlighted once again by J.C. Penney (JCP) poor Q1 results last week, which triggered a -14% drop in JCP shares.…
Read more

27 “Marked Down” Energy CEFs With Yields Up to 11%

Michael Foster, Investment Strategist
Updated: May 18, 2017

Energy is one sector where the experts just can’t seem to get it right.

That’s a trend my colleague Brett Owens has been watching for a long time. In a March article, he warned that too many investors were bullish on oil, and the hedge fund “experts” betting on an imminent price breakthrough were wrong.

Since then, oil prices, oil stocks and energy funds have fallen sharply, leading energy to post year-to-date losses while every other asset class is up:

Energy Takes a Dive

It doesn’t matter how you played energy; the Alerian MLP ETF (AMLP) was the best performer, but even that was negative, while the more oil-exposed Energy Select Sector SPDR ETF (XLE) and Vanguard Energy ETF (VDE) were down about 9%, on average.…
Read more

16 Under-The-Radar Stocks Quietly Yielding 10% to 36%

Brett Owens, Chief Investment Strategist
Updated: May 17, 2017

You won’t see these “hidden yields” quoted on any financial website. But these firms are showering their shareholders with double-digit yields – and making their owners rich in the process.

The key to finding them? Look beyond the stated yields and focus on the more nuanced (and more valuable) “shareholder yields”.

Take Corning (GLW) for example. The maker of Gorilla Glass never pays more than 3% – if you only look at the current dividend, that is:

Always a Modest 2%+ Yield

But Corning’s shareholder yield – which properly includes money the firm spends on share buybacks – has climbed into double-digits in recent years.…
Read more

My Top 3 Rules for Safe 7% Yields and 20% Upside in REITs

Michael Foster, Investment Strategist
Updated: May 16, 2017

Buying real estate investment trusts isn’t like buying other stocks; despite their high yields and big long-term returns, REITs require a bit more attention and a bit faster action than more popular dividend-payers, like blue chips and dividend-growth stocks.

But it’s more than just speed and care. To win with REITs, you need to follow three rules—and I’m going to show you those today.

These REIT rules have never been more important than they are now. Broadly, REITs are getting more valuable, but the market is getting more scared of them. This disconnect makes no sense and is partly the reason why two extremely healthy and valuable REITs—Sabra Health Care REIT (SBRA) and Care Capital Properties (CCP) recently merged.…
Read more

2 Stocks to Buy for 100%+ Dividend Growth – and 2 to Avoid

Brett Owens, Chief Investment Strategist
Updated: May 15, 2017

Fact: When interest rates rise, you need to be in dividend-growth stocks.

Proof: They’ve handily beaten the S&P 500 in the 17 months since the Federal Reserve put the zero-interest-rate era on ice.

In just a moment, I’ll show you 2 terrific off-the-radar dividend-growth plays to snap up now—and 2 surprising blue chips you’ll want to keep well away from your nest egg.

First, take a look at how the iShares Core Dividend-Growth ETF (DGRO) has performed vs. the SPDR S&P 500 ETF (SPY) on a total-return basis since December 16, 2015, the day Janet Yellen raised rates for the first time in nine years.…
Read more

5 Blue Chip Dividends to Sell Right Now

Brett Owens, Chief Investment Strategist
Updated: May 13, 2017

When blue chips get too popular – like the five I’m going to show you today – these “safe stocks” can actually be dangerous to continue holding in your portfolio.

The problem with blue-chip stocks? Call it the “Curse of the Dow.” The Curse says a stock that joins the Dow Jones Industrial Average will essentially hit a wall, underperforming in the ensuing months compared to how it performed before ascension. It’s not perfect, but it’s close – since 1999, 15 of 16 stocks that have joined the Dow have averaged 1% gains over the next six months, but averaged 11% gains in the six months before inclusion.…
Read more