Author Archive: Brett Owens

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

Bonds are back, baby. Let’s talk about three funds that pay—between 8.3% and 10.9%.

Plus, they are trading for less than the fair value of their parts. It’s free lunch time in Bondland.

Of course not all bond funds are created equal. ETFs serve their purpose, but closed-end funds (CEFs) are where the payout party is at. Value plus yield at the CEF café.

Most ETFs are tied to an index. Which means they are run by rules and robots. Boring.

CEFs tend to be actively managed, meaning “bond brains” are able to adjust their portfolio from defensive to offensive as the investing environment shifts.… Read more

“Daddy,” My nine-year-old started. I knew exactly what she was about to say.

“They said a lot of bad words.”

We were strolling out of Golden 1 Center. Our playoff-hopeful Sacramento Kings had just dropped another home game to a losing team. Our fellow fans were in foul moods.

Their postgame language was, shall we say, colorful. I thanked my daughter for her observation, and we continued our stroll away from the salty crowd. Best to get some distance before calling an Uber.

(A reformed dad like me couldn’t lecture our neighboring group with any real credibility. I mean, please don’t rewind my personal postgame tape to my time as a twenty-something.… Read more

AI stocks are booming—but they’re an absolute “dividend desert” for us contrarian income-seekers.

Or are they?

Most tech stocks—and I’d put AI darling NVIDIA (NVDA), with its pathetic 0.02% yield, at the top of the list here—don’t pay dividends when they’re growing quickly.

Only later, when growth slows, do they “find religion” and return cash to shareholders as dividends and buybacks. That’s too bad for those of us who like to have more than one way—price gains—to book returns on our stocks.

But what if we could find a way to grab more of our AI profits as dividends—particularly growing dividends—so we don’t have to “buy and hope” for price gains alone?… Read more