Author Archive: Brett Owens

Which dividend is most likely to be hiked?

Usually, the brand-new payout.

Chief Financial Officers are a conservative bunch. A CFO will only agree to pay a dividend if they know they can:

1. Make the payment comfortably.
2. Hike the dividend repeatedly for years to come—with said comfort.

The hike part is important because rising dividends drive stock gains. I’m talking about hundreds or even thousands of percentage points in potential gains.

Let’s consider Apple (AAPL) and its inaugural dividend moment. In March 2012, the tech giant initiated a regular dividend of $2.65 per share. The payout was a catalyst for 12 subsequent years of moonshot performance.… Read more

Be honest. I won’t be mad, but just admit it.

You’ve got some SPY in your portfolio. So much in fact you’re probably trying to quickly change the subject from the SPDR S&P 500 ETF Trust (SPY).

I’m not mad. (I’m just disappointed—ha!) We refer to SPY as “America’s ticker for a reason.” It is everywhere.

And it’s OK. Really it is. Holding SPY has worked out this year. But we’re now at an inflection point—which is why we are having this conversation.

Only three stocks account for 21% of the S&P 500. Apple (AAPL), Nvidia (NVDA) and Microsoft (MSFT) determine the entire market’s moves!… Read more

Look, I know pretty well everyone loves ETFs—mainly for the cheap management fees.

But here’s the thing: ETFs—especially dividend-growth ETFs—are almost always a raw deal. You’re better to go with carefully chosen individual stocks instead.

Today I’m going to prove it, with two popular ETFs whose lousy performance is costing investors thousands in lost gains. So we’re going to “swap” these losers for two terrific stocks whose payouts have exploded 379%+ in the last decade.

Their secret? An eye-opening “Dividend Magnet” pattern no one’s talking about (but as you’ll see in a moment, they should be).

Let’s start with the laggards, then move on to the Dividend Magnet—and these two overlooked individual stock buys.… Read more

With the market at nosebleed valuations, where can we look for value and yield?

Let’s turn to our favorite three-letter acronym. C-E-Fs.

As usual we have a handful of closed-end funds (CEFs) getting no love from Wall Street. This is perfect for us as we’re talking about dividends up to 14% and discounts between 10% and 15%.

In other words, these fat payers are trading for 85 to 90 cents on the dollar. Let’s discuss.

Gabelli Dividend & Income Trust (GDV)
Distribution Rate: 5.8%
Discount to NAV: 15.0%

We begin with Gabelli Dividend & Income Trust (GDV), a top-rate closed-end fund whose management team includes legendary value investor Mario Gabelli.… Read more

I have a pop payout quiz for you, my contrarian friend. Can you tell me how much dividend income you earned last week?

And if so, can you tell me how much you earned each day?

These details are now available in Income Calendar, the dividend tracking tool that we created in-house here at Contrarian Outlook. IC’s ability to project divvies down to the day tells us that:

• We collected $1,844.75 last Monday.
• Another $264.80 in divvies followed on Wednesday.
• And our holiday week was capped off with $340.55 in income on Friday.

The tool took my newsletter portfolio as input—with tickers and sample share counts—and did the rest of the work.… Read more

Railroad stocks are set to roll and we’re going to climb aboard with two stocks—including one that’s hiked payouts by 50% in five years—we’ll delve into in a sec.

What’s driving this opportunity? Our usual contrarian mix of overlooked growth and stocks that have been tossed overboard, of course!

Since the days of the Wild West, railroads have been the backbone of the US economy, so when economic growth gets out of sync with railroad stocks’ prices—as is happening right now—we need to take notice.

As I write this, the US economy is still in growth mode and shoppers are still spending.… Read more

Five growth companies are about to hike their dividends. Let’s front run these payout moves.

Many vanilla income investors miss these stocks because their current yields are modest. These armchair analysts are missing a critical point. These stock prices climb with each and every hike thanks to a phenomenon known as the “dividend magnet.”

Consider tech giant Microsoft (MSFT). Sure, Microsoft’s 18-year-old payout isn’t exactly old compared to fellow Dow components like Coca-Cola (KO) and Procter & Gamble (PG), which have been writing dividend checks since the 1800s, but it’s awfully long in the tooth for a member of the technology sector.… Read more

My six-year-old hooper was having an outstanding YMCA practice. She was leading the drills, encouraging her teammates and almost dribbling between her legs. So close.

And then, the very next minute, she was throwing a fit in the corner. Her tantrum would last the remainder of practice. She missed the end of the time-honored “kids versus coaches” game which the kids (as always) dominated.

One of the coaches (her father, and your income strategist) was not thrilled with her pouting but also not totally surprised. Parenting a soon-to-be-first grader is a rollercoaster. Best to enjoy the good moments and get through (or mentally block out!)… Read more

If you’ve been reading my columns for a while, you’re probably sick of hearing about the “Dividend Magnet.” (I’m starting to think I should put it on my license plate. Too bad the California DMV has a seven-character limit!)

Well, we got another quick Dividend Magnet win last week, when my latest pick for our Hidden Yields service, FedEx Corp. (FDX), shot up 17% five days (including a weekend) after our buy call.

An Immediate Dividend Magnet Win

To be honest, we Hidden Yield-ers are used to seeing gains on stocks that grow their dividends fast, like FDX, which hiked its payout 112% in the last five years.… Read more

I love the economics of real estate. But a landlord I’m not. Please, change your own lightbulb—don’t call me.

Enter real estate investment trusts (REITs), which provide us with landlord-style income from the comfort of computers and smartphones.

Why are these “virtual fourplex” deals available in convenient ticker form? Thank Congress (no, seriously!) By law, the bulk of a REIT’s income has to be returned to us, the shareholders, in the form of dividends. Even an average REIT is going to pay more than most other sectors, and some REIT dividends can get downright enormous—like the 7.8% to 22.3% yielders I’ll discuss here in a moment.… Read more