Author Archive: Brett Owens

Private equity (PE) is a rich guy and gal favorite. PE firms find deals and deliver outsized dividends.

They don’t like dealing with common folk. So, PE shops typically set a minimum of a few hundred thousand dollars or so to invest.

But we contrarians have a better way! By tapping BDCs—or business development companies—we can toss as little as $20 into a PE payer.

Better yet, we can secure yields between 8.5% and 13.1%. We’ll discuss three examples today. Including one that is trading below book value!

If you’ve never heard of business development companies (BDCs), you’re not alone. There are only a few dozen publicly traded BDCs, and even the largest one would be a minnow in the S&P 500.… Read more

Worried about a recession? Two thoughts:

1. I don’t blame you.
2. Consider this recession-resistant REIT (real estate investment trust), poised to rally on an economic slump.

Why rally? Well, interest rates and REITs tend to seesaw. When rates rise, REITs fall. At least that’s the conventional wisdom.

In recessions, interest rates fall. Normally bullish for REITs—consider them a  “second-level” bet on a bond bounce.

REITs, after all, are the bond proxies of the stock world. Investors buy them for their yields. That’s why we like them here at Contrarian Outlook.

It’s part of the REIT special sauce. As long as they dish most of their profits (90%+) as dividends, they pay no corporate taxes.… Read more

There are plenty of stocks out there, right now, with payouts growing fast—heck, some of them give shareholders a “raise” every three months.

You won’t find these “Dividend Accelerators” among the big names of the Dow.

Many are real estate investment trusts (REITs)—“landlords” of everything from apartments to warehouses. And they’re not just dividend-growth machines; most throw off higher current yields than the typical S&P stock, too.

And I mean much higher: right now, the REIT benchmark Vanguard Real Estate ETF (VNQ) yields 4.1%. The typical S&P 500 name? A sorry 1.6%.

You can thank the Feds for that: they give REITs a pass on corporate taxes as long as they pay 90% of their income as dividends.… Read more

We contrarians, we’re not ashamed to admit, make our big money dumpster diving for discarded dividends.

When vanilla investors toss trash, it is often our treasure!

I have a hunch this is unfolding in the natural gas market. Prices literally can’t go much lower, which means that eventually they must go higher. Check out this chart—prices are down by 80% in one year!

Nat Gas is Dirt Cheap 

“Natty” prices have fallen from roughly $9 per million British thermal units (MMBtus) to a little more than $2, flattened by unseasonably warm weather and months of dogged supply surplus. Reuters reported in February that “depletion so far this heating season has been around half the seasonal average for the last 10 years.”… Read more

As we head towards the most telegraphed recession in recent memory, US Treasuries are receiving a lot of attention. And rightfully so.

In recessions, interest rates go down. This boosts bond prices (which trade opposite rates).

But not all bonds are created equal—especially during recessions. Slowdowns tend to make the safest bonds the most attractive.

After all, it can be a slippery slope from slowdown to meltdown, so many investors prefer the safety of Treasuries. In 2008, for example, the S&P 500 sank 38% but US Treasuries rallied sharply. The iShares 20+ Year Treasury Bond ETF (TLT) delivered a 28% gain for the year:

In 2008, T-Bonds Did Great 

I don’t think we’re in for a repeat of ’08, but this “buy Treasuries before a recession” trade has worked superbly since we called it in November.… Read more

Worried the economy is teetering on the brink? I don’t blame you.

Rather than running for the hills, let’s focus on recession-resistant dividend stocks. Big payout growers. We’re talking 25% to 56% dividend growth (yes, that’s no typo).

The safest dividend is the one growing the fastest. Take UnitedHealth Group (UNH), the largest health insurance carrier in the US. Its business is beautifully recession resistant. As a result, UNH is one of the most consistent growth stocks out there. Mark it down for 10%+ gains, per year, every year.

Gains in what? Every metric that matters. UNH’s sales soared 13% year-over-year.… Read more

We’re all about the dividends here at Contrarian Outlook. Often we take it for granted that we’re not looking to lose 17% in just a few weeks while we collect income!

BAC Reaches (and Reaches!) for a Bottom …

The share-price chart for Bank of America (BAC) may appeal to dividend dumpster divers. And heck, it may work, as BAC stands to gain as more people pull their savings from regional banks and plunk them into “too big to fail.”

Why deal with this nonsense? This is exactly why we’re fading “cardiac” price charts like BAC’s and shifting toward the smooth and steady growth of dividends:

… While We Climb the “Dividend Staircase”

That’s more like it!… Read more

Looking to profit from oil-powered dividends? Look no further than this discounted payer dishing 9.6%.

Oil prices had plunged in recent months on recession fears. However, there’s still no recession. Oops. One point for the energy bulls.

Meanwhile, OPEC said enough “cheap” oil. On Sunday the cartel announced production cuts. Oil prices popped.

Will OPEC’s move prompt the Federal Reserve to raise rates even higher to cool demand for oil? I don’t think so because the Fed has a problem. It broke the banks! Higher rates could do more damage.

High oil is painful, but a banking crisis is worse.… Read more

I hate to see folks trying to time this banking mess with regular stocks like JPMorgan Chase & Co. (JPM). Especially when they can easily swap their big-bank stocks for “preferred” dividends yielding 8% and up!

That’s a far sight better than the magic trick mainstream investors are attempting, as they try to dodge into big banks like JPM at just the right moment.

JPM Looks for a Bottom

Worse, JPM only yields 3% today. And you and I both know that markets can thrash around for weeks looking for a bottom.

That’s why, instead of squinting at price charts, we’re calmly picking up some sweet “backdoor” dividends from these very same banks, but with a yield that’s 173% bigger.… Read more

It doesn’t get any better than monthly dividends. Getting paid every 30 days aligns nicely with our monthly bill schedule.

Today we’ll discuss three monthly dividend stocks yielding 5.4% to 14.6% per year. Yes, that’s right, 14.6% per year!

Worth it? We’ll discuss that shortly. First, an ode to the monthly payment.

Below I’d like to invite you to choose your own retirement adventure. These are the same dividend payments except the top set is paid only quarterly.

The bottom, meanwhile, is paid monthly.

Same total payments but a much smoother retirement ride with the monthlies.

Where do we find monthly dividend payers?… Read more