Author Archive: Brett Owens

What’s better than a big dividend?

A hated high yield.

Especially when the disgust comes from Wall Street analysts themselves. You know, the fanboys who follow the company for a living.

Analysts are paid to be bullish. Let’s face it, nobody wants to hear from a bear. Here’s how unusual is it for analysts to be down on a stock?

There are just two consensus Sell calls across the entire S&P 500. Two.

So, when one of the suits says a business is bad, we should take note, right?

Wrong.

Analysts tend to be trend followers. And as they say in the business, the trend is your friend until it ends.… Read more

Remember when the Federal Reserve stopped printing money for a few months? It didn’t go well.

Yes, I’m making fun. A bit. Chairman Jay Powell did abstain from his printing press for nine full months.

The year, as you’ll recall, was 2022. Headline inflation topped 8%. Eight! Jay, who had been blaming every supply chain from here to Shanghai for the price pressures, ran out of excuses. He held down the power button on his money printer for a hard reset.

Stocks sank 18% that calendar year. Bonds did worse—they completely blew up. A perfectly “safe” fund of US Treasuries, iShares 20+ Year Treasury Bond ETF (TLT) was anything but, shedding 31%.… Read more

It blows me away that folks still think high interest rates will be around forever. Truth is, rates are already starting to fall!

But no one’s really paying attention (yet!). Which leaves us a brief window to lock in some sweet 8%+ dividends from one of our favorite utility-focused funds. This bargain-priced buy soars when rates drop.

Look Beyond the Headlines for the Real Rate Story

Remember January, when all the talk was about how rates would be cut six times this year?

Poof. Those hopes were history before winter—such as it was—ended.

Nowadays, futures traders have almost completely thrown in the towel—they’re calling for just two rate cuts between now and January.… Read more

Small-cap stocks are on sale. We can buy select names for just 8.8 times earnings and 83% of book value.

Large cap stocks rarely sell this cheap. That is the problem with popularity! Which is why we’re looking small but thinking big, eyeing payouts between 7.3% and 13.8%.

(Those dividends are no typos. The beauty of being nimble individual investors means we can fish in these small but potentially lucrative ponds.)

Now small cap stocks aren’t always this cheap. Traditionally, smaller firms trade at a premium to their large-cap counterparts given their outsized upside potential. But today, small caps are less expensive by just about every valuation measure.… Read more

DoubleLine Income Solutions (DSL) took its biannual trip to the bargain bin a few weeks ago. It was a short stay, as usual.

By mid-April, vanilla investors had worked themselves into a hysterical state. They somehow convinced themselves that the Federal Reserve was going to continue raising rates.

Let me repeat—they worried that, in an election year, the Fed was going to keep on hiking. Unlikely.

Even Bloomberg lamented that traders saw “no relief in sight for bonds.” A hopeless howl that piqued our contrarian interest. No doubt, relief was just around the corner.

Indeed it was in the form of Chairman Jay Powell and his soothing postgame pillow talk.… Read more

“Don’t fight the Fed” is my top investing rule—but what the heck do we do when Jay Powell says one thing and then does another?

We buy bonds! Below we’ll dive into a bond fund kicking out a sweet 9% yield and sending payouts our way every month.

But first, let’s get to the heart of the Fed chief’s doublespeak.

Did you watch Powell’s press conference last week?

If you’re like me, you probably weren’t surprised by most of it. He did his usual tough-guy talk on rates. But then, almost as an aside, he said the Fed is slowing its campaign to shrink its balance sheet—known as “quantitative tightening.”… Read more

Stock market rallies climb walls of worry. Well, we have no shortage of such worries today!

A few days ago, Bloomberg lamented there was “no relief in sight for bonds”. This was ironic because relief—the catalyst for the next big bond rally—is hidden in plain sight. Despite the despair, 10-year Treasury rates are still a ways off from their recent 5% highs last October:

Reality Check: Rates Still Lower Than Last Year

If they put in a “lower high”—as I’m expecting they will, thanks to a slowing economy and labor market—it will be wildly bullish for bonds (which trade inverse rates.)… Read more

“If you own dividend-paying stocks, you’d be a fool to not be using Income Calendar,” my man Mark P. from California writes.

Tell ‘em, Mark!

We are devoted to retiring on dividends here at Contrarian Outlook. But a little bit of work in retirement is OK. As income investors, we should be able to, well, project our income.

Note that I said a little bit of work. Not a lot! I am not interested in fiddling with spreadsheets until the end of time, and neither is my man Mark.

That said, I’m springing a pop payout quiz on you.… Read more

One of the best ways to grab a dividend payer set to surge is a strategy you never hear about anymore: Pick up shares of a conglomerate.

I know, I know. The word brings to mind “old school” companies like 3M (MMM)—which we discussed a couple weeks ago—and Honeywell International (HON).

The deal on these companies is that they’re basically a collection of businesses that often have little overlap. They’re hated by Wall Street because they’re just too much work for the suits to value!

That’s great for us because these firms often have the most value waiting to be unlocked—especially if you buy as they tighten their focus on a specific industry.… Read more

Monthly dividend stocks baby. Most income investors don’t even realize they exist!

Out of the few thousand stocks that trade publicly, only a few dozen pay monthly dividends. These hidden gems tend to have market caps in the hundreds of millions rather than billions.

Their relative obscurity is perfect for us. We’ll take them over their blue-chip quarterly cousins.

Quarterly dividends are pay days we prefer not to wait for. Plus, the payouts typically disappoint.

Let’s consider the distributions from a $500,000 portfolio split evenly among a group of five mega-cap dividend payers. These are uber-popular, widely held blue chips that you’ll see near the top of most major large-cap funds.… Read more