Author Archive: Brett Owens

The manic market just dumped business development companies (BDCs), again. These three dividend stocks paying up to 11.7% are poised to bounce back when sanity returns.

BDCs, which lend money to small businesses, are on the “outs” with the Wall Street suits after multiple soft jobs reports. The spreadsheet jockeys fret about an unemployment-induced economic slowdown and miss the real story: small businesses are making more money than ever thanks to AI.

Here is what’s actually happening in the Main Street economy:

• Employers—especially nimble small business owners—are implementing AI to streamline and even run their operations.
• With AI tools, fewer humans are needed.

By now, it’s glaringly obvious: AI is replacing workers. And it’s boosting corporate bottom lines as it does.

I call this the “growth-without-hiring” trend, and it’s accelerating. Today we’re going to grab our share in the form of big dividends (up to 8.1%) and upside, too.

Latest Payroll Report Tells a New (Yet Familiar) Story

The latest evidence that “growth without hiring” is the real deal? The September ADP payrolls report, which showed that companies cut 32,000 positions. The August numbers were also revised to 3,000 losses, not the 54,000 gains originally reported.

With numbers like those, you’d expect the US to be in recession, or close to it.… Read more

Wall Street left these 8.5% to 16.6% yields for dead. But their next dividend raises may show that these patients have a pulse—and send these prices higher before year-end.

Even better, three of these companies are quarterly dividend hikers. These are companies that have a track record of at least a few years of improving their payouts not once a year, but once a quarter.

What are the red flags to look for when these companies make their next announcements?

Hess Midstream LP (HESM)
Distribution Yield: 8.5%
2024 Increase: 10.9% (across four hikes)
Projected Q4 Distribution Announcement: Late October

Hess Midstream LP (HESM) is a master limited partnership (MLP) that owns, operates and develops a number of midstream energy assets, primarily located in the Williston Basin area of North Dakota.… Read more

In most US industries, banks help businesses finance their buildings. The lenders also provide working lines of capital for the operations to grow.

Cannabis is different. It is tricky for operators to find money due to federal roadblocks.

At the national level, cannabis is still illegal. However, 40 states have legalized the drug in some fashion. Uncle Sam mostly looks the other way and lets states regulate their own markets—except when it comes to banking and taxes.

Banks cannot lend to cannabis operators. So, good luck financing that building.

Also, there is a tax code relic of the 1980s war on drugs (“Just Say No!”)… Read more

We contrarians live for the “one-off” shots at extra income (or gains!) our favorite dividend plays throw our way.

One of these “special situations” just landed in our lap: A shot at buying a megatrend-powered 7.6% dividend that’s rarely cheap. And we’re picking it up for a song.

It’s a long-time holding of our Contrarian Income Report advisory, and it’s sitting right in the tracks of the surging AI buildout. In fact, it may be the last “cheap” AI play on the board! This one’s dropped from trading for more than its portfolio is worth to a lot less.

A 7.6% Dividend Bargain We Haven’t Seen Since 2020 

As you can see, this fund dropped from trading 6% above its net asset value (NAV, or the per-share value of its portfolio) to 7.1% below, as of this writing.… Read more

The Fed has finally cut rates, and if the “dot plot” is any indication, it won’t be the last. This is fuel for real estate investment trusts (REITs)—they thrive when borrowing costs fall and their fat dividends shine next to shrinking bond yields.

Today we can lock in payouts between 6% and 13% from landlords set to surge as Powell’s long-awaited pivot plays out.

Why do REITs rally as rates fall? These stocks act as “bond proxies” that move alongside bonds and opposite rates. Here is a major REIT ETF plotted against the 10-year Treasury yield. As you can see, when the important rate zigs, the REIT benchmark zags:

REITs Zig When Rates Zag

Rate cuts don’t always hit the 10-year overnight.… Read more

When DoubleLine CIO Jeffrey Gundlach speaks, we yield hounds listen.

Right now, the “Bond God” has gold on the brain. We’re dialed in, because his latest utterances are pointing the way to a sweet 7.4%-paying “gold-dividend twofer” for us.

I’m talking about a play for price upside in the near term, followed by big monthly dividends (yes, 7.4%, and maybe more) when the “discount trigger” we’ll talk about in a sec kicks in.

The Bond God Calls ’Em Like He Sees ’Em

The Bond God is a dyed-in-the-wool contrarian who holds a special place in our hearts because, well, he’s often right.… Read more

Artificial intelligence is supposed to be graceful, just code humming in the cloud. Yet it’s anything but lightweight. AI is an energy hog.

Every time a chatbot like ChatGPT spits out an answer, it pulls from enormous racks of servers running in data centers. Those servers draw electricity on the scale of small cities.

Over the past few years, AI has been a tech story. With increasing adoption, however, it is about to evolve into a power story.

AI can’t happen without natural gas. Renewables are growing for sure but most new data centers are still tied to gas-fired plants.… Read more

Most Wall Street “suits” are allergic to dividend cuts. These spreadsheet jockeys sooooo lack imagination. They prefer linear trends—up and to the right.

Dividend growers model nicely. Payout “resets” (cuts!) do not. So, there is often a knee-jerk reaction from analysts to sell every divvie slash they see.

Same goes for most individual income investors. These vanilla beans sold BlackRock Health Sciences Term Trust (BMEZ) late last week when BlackRock sliced the dividends for three of its popular funds.

The weaker hands sold. Big payouts remain. As contrarians, we’re intrigued.

Dividend cuts, ironically, often mark the start of opportunity. Here’s what the knee-jerk sellers miss:

• Even after the trim, BMEZ still yields 9.2%.