Author Archive: Brett Owens

While most income investors are reaching for big yields right now, a small group of “hidden yield” stocks are quietly handing smart investors growing income streams plus annual returns of 12%, 27.1% and even 54% or more per year.

So if you want to double your money every few years – and double your income as well – then you need to focus on the seven stocks I’m about to share.

Rule #1: Dedicate Some Cash to Dividend Growth

As I wrote in this month’s edition of the Contrarian Income Report, our portfolio pays 7.5% today. And I can even get you 8.3% yields on new money, by focusing on our seven best buys.… Read more

Lately, I’ve heard more real estate bulls touting rental property as the perfect retirement investment.

Truth be told, it can be.

You probably know people who’ve built a nice income stream in their golden years from a well-chosen set of rentals.

Trouble is, there’s a big—and too-often glossed over—problem with being a property baron: it’s not the easy ride housing fans make it out to be! That is, unless you like being on duty 24/7 to fix clogged toilets, chase down deadbeat tenants and deal with noise complaints.

I don’t know about you, but that’s not how I plan to spend my golden years.… Read more

Business development companies (BDCs) are one of the market’s top sources of yield. Unfortunately for income hunters, in 2017, this industry also was one of Wall Street’s greatest sources of disappointment.

I don’t say that to condemn the BDC space. I say that as a warning: While these financiers of small and midsize businesses can occasionally be excellent long-term holdings, there are plenty of landmines to avoid. That’s why today, I want to highlight three such funds that have mouthwatering yields of up to 12% – each of which might look attractive at first glance, but only one of which looks like a safe buy right now.… Read more

It’s essential for core dividend holdings to consistently raise their payouts over time. Without a steady uptick in the regular dole, inflation starts gnawing into investors’ returns. That dollar becomes 98 cents, becomes 96 cents, and – you get the picture.

And it’s especially important to keep tabs on the dividend growth of your real estate investment trusts (REITs). I want to buy REITs that are constantly raising their rent. Larger and larger rent checks create growing dividend checks for us!

Over the long run, REIT share prices move higher as their dividends move higher. These payouts also provide downside for lean years like last year, when the dividend was about all we got:

2017 wasn’t a fun year for REIT investors, with the Vanguard REIT ETF (VNQ) coming in essentially flat for the year without including dividends.… Read more

No safe bond pays 10% itself, of course. But it is possible to generate double-digit yields from a portfolio of secure bonds.

The secret is similar to successful dividend investing. Why buy a stock and be content pocketing “only its dividend” when you can have the payout with price upside to boot?

Most income investors are even less thoughtful when they purchase bonds. They fixate on the coupon rate (which these days they are inevitably disappointed with.) They watch their bonds weigh down their entire portfolio, muttering to themselves “at least they are safe.”

Well, sure. But they can be both safe and profitable.… Read more

The REIT bears have gone too far this time.

In the past few days, I’ve seen a lot of panicky commentary warning that incoming Federal Reserve chair Jerome Powell will raise rates too fast after he takes over in February—and that would be a disaster for real estate investment trusts (REITs).

Don’t take the bait.

Because it all adds up more fear-fanning headlines from a business press desperate to make something out of nothing.

I’ll show you why in a moment. Then we’ll move on to 3 corners of the REIT space (and 5 stocks in particular) that underperformed in 2017—and are poised to spring back big time in 2018.… Read more

Tax reform has been signed into law, giving the market a booster shot as we kick off 2018. Republicans took a hatchet to the corporate tax rate, which should translate into more profits, which in turn should trickle down to investors in the form of earnings-driven gains, buybacks and dividends.

Generally speaking, that’s fantastic news for anyone holding blue-chip dividend stocks. But that’s not the same thing as saying every last well-known income play is worth carrying right now.

They’re not.

Eventually, some blue-chip stocks get caught in a rut where the growth that made them a household name in the first place starts to disappear.… Read more

What will 2018 hold for income investors?

Well, it depends where you look. Buying pricey blue chips for 2% or 2.5% yields looks like a crowded, low upside trade. Same with most mainstream bonds, which don’t pay much more.

But – thanks to a lack of attention from “first-level” financial websites – there are some bargains still worth buying in 2018. I’m talking about dividends of 8% or more, with extra price appreciation potential to boot.

What are these best buys? And how are they possible in this 2% world?

First Let’s Thank Fed Fears, Which Are Probably Overblown (Again)

This time last year, I told you that Fed rate hikes wouldn’t affect us income investors in 2017.… Read more

You and I both know the spoils from the GOP tax plan will go right into shareholders’ pockets—so let’s discuss how we can grab our piece of the action. And outsized dividends with 20% price upside to boot!

It all comes down to zeroing in on companies that do 2 simple things. I’ll reveal what they are—and give you 3 terrific “tax plan buys” as I go along.

But first, let me be clear that I’m not taking a side here: no matter if you think the tax plan is a masterstroke or a catastrophe, as an investor, you need to check your politics at the door and take a hard look at the landscape in front of you.… Read more

Investors looking for income with low risk tend to gravitate heavily toward bonds, but their efforts are often better spent in preferred stocks. These “hybrid” securities commonly pay 5% or 6% but gyrate far less than common stocks – certainly less than most shares that offer a similar amount of yield.

So, what exactly is a preferred stock?

Preferreds are simply another way companies raise capital. However, unlike common stock whose value fluctuates with the success (or lack thereof) of the company, preferred stock trades around a “par value” much like a bond, and they pay fixed dividends – often yielding far more than the common shares.… Read more