Author Archive: Brett Owens

Wall Street analysts have “Buy” ratings on 388 stocks in the S&P 500. That’s over 76% of the index!

Thank you, suits, for the curation. No, seriously. We contrarians are going to comb through the Holds and, even, the lone Sell:

Analysts Rate Most Stocks as “Buys”

Source: S&P Global Market Intelligence

Analyst optimism is the norm. Analysts need access, companies provide them with access. One hand washes the other, thus it is rare to see unfavorable ratings on stocks.

The problem with a Buy rating is that there is nobody left to upgrade the stock. Every delta is a downgrade.… Read more

As I’m sure you have heard, Moody’s downgraded US debt last weekend.

The stock market panic that ensued lasted for, oh, about an hour of trading.

Why did this already get shrugged off? It’s a classic empty-calorie headline. The practical impact of the downgrade to top holders of Treasuries—banks and pension funds—is nil.

Treasuries are still classified as top-grade collateral, which means banks can continue to leverage these securities. T-bills are just as good as cash for bank reserves, as they were before the downgrade. No need to scramble for new collateral.

And Treasuries still have investment-grade status, which means pension funds don’t have to make any moves.… Read more

We need to talk about one dividend grower that’s set to win big from this sudden breakout of tariff peace.

It’s an all-American stock that’s “dirt” cheap now. I’m talking about CF Industries (CF), a holding of my Hidden Yields service. CF makes fertilizers and is the world’s largest maker of ammonia, a key ingredient of fertilizer.

How do we know CF is primed to win as China and Uncle Sam take a breather?

We’re quite literally following the money here: CF’s management team is piling in with huge stock buybacks—to the tune of 20% of the company’s “float” over the last three years.… Read more

Is it time to buy the dip on these dividends—which by the way yield between 5.3% and 7.6%?

Yes, the market-at-large has bounced quite a bit. But these payers remain mired in the bargain bin.

Vanilla investors who only focus on the S&P 500 have serious FOMO. They worry that they missed the pullback. The best buying opportunity, at least in terms of the plain “SPY” ETF owned by most of America, lasted only a week or two:

The S&P 500 Dip Didn’t Last Long

But there are still cheap dividend payers that haven’t rallied alongside the popular names. At least not yet.… Read more

The UK trade deal was apparently the tasty egg roll before the main course of lower Chinese tariffs. A delightful order for this dividend grower, ready to feast on the “Peking duck” of trade agreements.

China is one of the biggest buyers of US crops, importing tens of billions of dollars of American agriculture every year. Soybeans and corn meander from Midwest farms all the way across the Pacific to feed China’s large (and growing) livestock industry. Higher US-China tariffs have weighed on US farmers’ profitability—and in turn, on business for key ag suppliers like Corteva Agriscience (CTVA).

So the “trade truce” with China (announced Monday) is quite bullish for Corteva.… Read more

Are we careening towards a recession, or is a pickup in inflation the big threat to the stock market?

The negative first quarter GDP print has recession fears in the financial headlines. Meanwhile, Fed Chair Jay Powell remains fixated on inflation.

Ironically, both may come to pass. Which means we must prepare our portfolios for a slowdown that is quickly followed by a pickup in prices.

Let’s put one smart lender on our “Goldilocks” watch list. This ticker yields 10% today (with some nice “dividend insurance” we’ll talk about in a moment). But the key point is that it profits as inflation—and interest rates—tick higher.… Read more

While vanilla income investors limit their search to mere “common” dividends, we contrarians know where the real payout party is at—with preferred divvies.

Let’s talk about three preferred-stock vehicles that pay from 6.9% to 9.4%. All three of these funds dish monthly dividends.

And these payouts receive preferential treatment over common-stock dividends, making them safer than the common payouts offered by regular ol’ equities.

There are four main ways to buy preferreds, and three of them have some serious headaches and drawbacks:

1. Individual preferred stocks: Research resources for individual preferred shares are few, far between and often require expensive paid subscriptions.

Vanilla investors fixate on price. We contrarians know better.

It’s all about the NAV. Net asset value, baby.

Price is what people pay at a given moment. But people panic. Many like to buy high—and sell low!

NAV, on the other hand, is what something is worth at that same moment. Price and NAV can become disconnected, especially during emotional market moments. When this happens, it is often a buying opportunity for careful contrarians like us.

Let’s take a pop quiz. Think about the funds you hold in your portfolio. What was your top performing NAV for the month of April?… Read more

It’s no secret this economy is slowing—at least in the near term. That’s given us contrarians a (time-limited!) buy window on the “dividend twofer” we’re going to dive into today.

One of the tickers we’ll talk about below pays a sturdy 7% now. The other yields 4.9% and sports a source of upside no one has noticed (except us, of course!).

Both are utility plays, which tend to rise as the economy slows, lowering interest rates as it does. Let’s get into this opportunity, starting with last week’s GDP report, which said, yes, the US economy did shrink to start the year.… Read more

Dividends over drama, please. Like these five steady stocks that yield 7.2%, on average.

Back in school they taught us that to increase returns, investors had to take on additional risk. This was a financial engineering class at Cornell University, by the way. The prof should have known better, but he didn’t, because he was a researcher and not an actual investor.

It’s a common mistake in academia, and those who try to invest “buy the book.” The book says more beta means more returns. Well, this text is often wrong!

Big dividends and low volatility are a beautiful combination.

Volatility can be measured several ways.… Read more