Author Archive: Brett Owens

We’ve got a great shot at locking in big yields—and big dividend growth—on utility stocks. But we need to buy now, before rates start their (inevitable) decline.

I’ve got three “growth utilities”—boasting fast-growing businesses and dividends—for us to play this opportunity with below.

Best part is, thanks to their healthy balance sheets, these three have a built-in “buffer” if rate cuts do get held up for a bit.

Last October’s Rate Peak Was Just Act 1

I know this plan works because, well, it’s exactly what happened last fall, when fear was everywhere and the 10-year yield scraped up against the 5% barrier.… Read more

Let’s talk about five dividends that are set to soar when the Federal Reserve cuts interest rates.

Not that these stocks need help. They are already in multi-year bull runs because they have the power of the “dividend magnet” on their side. This is a situation where dividend growth pulls a stock’s price higher and higher.

Let’s take coffee giant Starbucks (SBUX) as an example. Starbucks has beaten the S&P 500 by more than 300 percentage points since 2010. That’s also the year in which SBUX started paying dividends.

But it’s not just that Starbucks has clobbered the broader market. It’s the way in which the stock price and dividends have largely moved in tandem, with one seemingly pulling the other higher over time.… Read more

Riddle me this, my fellow contrarian.

If the Federal Reserve is really tightening its balance sheet, then why is the stock market already up 10% on the year?

Why is gold at all-time highs?

And why is bitcoin going completely bonkers?

The answer is “quiet QE.”

As we discussed last summer in this column, Fed Chair Jay Powell’s words have sounded hawkish. He and his cronies talked tough about inflation. But look at their actions: the Fed has quietly provided ample liquidity to the financial markets.

Which is why dollar hedges like gold and bitcoin have soared.… Read more

We income investors like REITs (real estate investment trusts) because they are obligated to dish most of their profits to us as dividends. Today we’ll discuss five with fat yields between 8.3% and 9.3%.

When to buy REITs can be tricky. Generally speaking, we don’t want to buy them before rate hikes. Higher rates make money more expensive. REITs thrive on cheap money. So, the recent rate hiking cycle has been bad for REITs-at-large.

Rates and REITs Moved in Opposite Directions

Rate hikes appear done, which usually means it is time to buy REITs. After all, the Fed’s next move is likely to be a cut.… Read more

This market bounce is strangling the payouts on everybody’s favorite ETFs. But it’s also given us a sweet setup to grab another group of funds kicking out big payouts, to the tune of 8%+ yields.

Even better, many of these funds—wallflowers to “popular-kid” ETFs—were left off the invite list for the 2023 market party. That means they’re (still) cheap today.

I know an 8% payout has a lot of appeal to most folks, with Treasury yields now yielding around 4.3%. That’s not bad, but it doesn’t leave you much after you account for still-elevated inflation.

And if your cash is stuck in an ETF, you’re getting a lame payout, well, almost all the time, but especially if you buy now: the SPDR S&P 500 ETF Trust (SPY)—which, as the name says, holds the entire S&P 500 index—yields a sorry 1.3% as I write this.… Read more

Would you believe, my fellow contrarian, that most of our vanilla income friends settle for utility dividends that pay quarterly?

Ha!

Unfortunately (for them) that’s no typo. There are millions of investors just like them who are OK being paid every 90 days.

Yes, ninety!

Obviously, they don’t read highbrow publications like Contrarian Outlook, where we highlight monthly dividend payers. Today we’ll discuss two that pay 8.3% and 8.6% respectively.

With yields like these, we can actually retire on dividends. Take a chunk of money that we’ve saved up and convert it into regular cash flow. A million dollars, for example, can become $83,000 or $86,000 annually in dividend income.… Read more

Here’s a wild prediction for the rest of 2024: “sleepy” (but very high yielding) emerging-market bonds will clobber today’s high-flying AI stocks.

Sounds ridiculous, right?

Well, it’s one of those seemingly weird calls that’s absolutely on the table after the first Fed rate cut drops—a date that, if futures traders are right, will arrive as soon as June:

Interest Rates Are About to Pull a 180

Source: CME Group

Here’s where emerging-market bonds come in: When rates drop, the US dollar gets banged up—it always does. That will light a fire under EM bonds.

And given that the dollar has been en fuego for the past decade, the greenback’s drop could very well be swift.… Read more

If they’re buying, we’re buying.

Or we’re at least considering it.

If there’s anything better than a big dividend, it’s one that is being gobbled up by the company’s own insiders. We’re talking about the officers, directors, and other members of the C-suite that are closer to the action than any analyst, reporter or investor could ever hope to be.

Most insiders are sitting on their hands right now. And who could blame them given the bubbly backdrop? But three management teams in particular are saying:

Our stock is cheap. Our dividend—up to 7.5%, by the way—is safe. We’re in with our own cash.… Read more

Last month, this company cut its dividend by 48%. Five days later, its ticker was booted out of the Dow Jones Industrial Average (DJIA).

Vanilla investors fled the stock. Nonconformists like us, on the other hand, started to pay attention.

When there’s nobody left to love a dividend dog, we consider adoption. The payout was slashed 48%. This stock is 71% off its all-time highs. The Dow doesn’t love it any longer.

Sign us up for the stock that sounds like an old-time country music song, “The Ticker That’s Lost Everything.” We’ll give the herd their Nvidia (NVDA) at 36-times sales.… Read more

I think we can all agree that interest-rate cuts are on the table now. Even Jay Powell says so!

That rare “straight talk” from mystery-man Jay has fueled a jump in bonds. But there are still some bargain “bond proxies” on the table waiting to be snapped up.

To be sure, Jay is still being cagey about when the first cut will drop. But futures traders think they’re on to him: they’re calling for at least three quarter-point cuts by the end of this year, as of this writing:

Source: CME Group

We can argue about whether or not that’s too aggressive.… Read more