Author Archive: Brett Owens

Are real estate investment trusts in a bubble? The evidence is mounting—especially in the big names many investors see as sacred.

Today we’ll look at two “frothy” trusts you should watch like a hawk if you hold them … and avoid if you don’t. Further on, I’ll show you two REITs that are terrific buys now. Both boast gaudy 6.0%+ dividend yields and have big growth ahead, too.

“O” Is for Overpriced

First, we need to talk about Realty Income (O), a giant among REITs, with a $17.9-billion market cap and 4,600 retail properties across the U.S. The stock has soared 46% in the past year, nearly tripling the 16% gain in the benchmark Vanguard REIT Index ETF (VNQ) and leaving the S&P 500, with just a 3% rise, in the dust.… Read more

Today I want to tell you about two hidden pitfalls that could threaten your stock returns—and four stocks that could be the first to take a tumble.

First, the pitfalls. You’ve probably heard of the first one: seasonality.

That’s the market’s tendency to outperform—or underperform—at certain times of the year. A prime example is the “sell in May strategy,” in which some investors bow out from May to October, when market gains tend to be muted.

Now the worst month for stocks—September—is nearly upon us. According to the Hulbert Financial Digest, from 1896 through 2014, the Dow Jones Industrial Average fell an average of 1.06% in September, compared to an average gain of 0.75% for all the other months.… Read more

The market is on a tear, making it harder than ever for dividend growth investors to find good buys for their money. While many people expect the market will correct itself, you might be missing out on steady gains if the market continues to “melt up” thanks to low interest rates.

Fortunately, there’s a safe way to secure yield with upside to boot. While the market has bid many well-known dividend payers up to silly prices (and caused yields to crash), there are still a few lesser known names paying 4% yields with plenty of payout and price runway from here.… Read more

Your favorite dividend stock just chopped its payout – should you sell?

It depends. Believe it or not, some dividend cuts are actually wildly bullish signals. They mark the bad news being officially “priced in” as shares soon embark on a furious contrarian rally.

Other payout cuts, however, are red flags begging you to sell before you lose even more money. They are truly a white flag of financial distress that shows the firm failed at its sole responsibility to shareholders – to get the dividend paid.

We’ll discuss post-cut strategies in a moment, including specifics on recent dividend disappointments from the likes of American Capital Agency Corp (AGNC), Potash (POT), Williams Cos (WMB) and the iShares US Preferred Stock ETF (PFF).… Read more

With stocks are at nosebleed levels, how about some high income issues that double as portfolio insurance? Today we’re going to discuss five dividend payers with an average payout north of 5%. All five boast recession-proof businesses.

Of course there are plenty of things to worry about in today’s financial world. Income inequality is high, restaurant sales are plummeting, and few people seem confident in America’s increasingly contentious political quagmire. Then of course there’s the slowdown in China, growing political unrest around the world, exploding student loan debt in America and rising subprime defaults in the auto loan sector. This was all reflected in Friday’s disappointing GDP results for the second quarter.… Read more

I know I don’t have to tell you it’s a minefield out there for income investors.

Ten-year Treasuries yield a pathetic 1.5%, and dividend-growth stocks have been on a tear. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which holds shares of companies that have hiked their payouts annually for 25 years or more, has soared 12% year-to-date, more than doubling the S&P 500’s gain:

That’s left many Dividend Aristocrats overvalued and ripe for a fall. Worse, it’s driven their dividend yields to historic lows.

Just take a look at food distributor Sysco (SYY), which yields 2.4% today, barely above the S&P 500 average and near lows not seen in nine years:

To get that meager yield, investors are buying a stock with a trailing-twelve-month price-to-earnings (P/E) ratio of 37, way above its five-year average of 23!… Read more

The market is on fire right now, which is great if you’re fully invested. But if you have cash on the sidelines, you might be worried about jumping in. And with good reason–with the S&P 500 reaching nosebleed valuations, “safe” indexing is going to expose you to potential losses.

There’s an alternative, and it’s particularly compelling because it also nets a high income stream while you wait for your holdings to go up in value. I’m talking about yields of 8% with strong upside in the form of capital gains potential to boot.

These big payouts are paid by funds that are undervalued for one simple reason: ignorance.… Read more