Author Archive: Brett Owens

If I can give you just one piece of advice as we pass the midpoint of 2023, it’s this: do not trust your dividend income to ETFs!

Instead, look to the simple “payout-powered” strategy we’ll talk about in a second. As we’ll see, it generated a tidy 83% gain for readers of my Hidden Yields service in just over two years.

Now is the perfect time to put it to work again, with corporate earnings—and dividends—likely to rise next year after slumping a forecast 16% in 2023, according to a recent report from Morgan Stanley (MS). For 2024, the bank is calling for S&P profits to soar 23%, then tack on another 10% gain in 2025.… Read more

AI is popular. Emerging market bonds, needless to say, are not.

Which is perfect for us responsible contrarians striving to retire on dividends. The more neglected an asset, the better.

But what’s the catalyst for these big yields? I’m talking dividends between 6.5% and 12.1%, by the way.

That’s easy. When the buck gets banged up, these funds soar. And that is exactly what is playing out today.

The US dollar has been en fuego for the past decade. I know, it’s hard to believe given noise from the “demise of the dollar” crowd. But these guys have lost a lot of money betting against the buck.… Read more

I’m sure you probably know this—but it is usually a really bad idea to pay 43-times sales for a stock.

Note that I did not say earnings. I said sales. Revenues. The ol’ top line. Before everything.

Scott McNealy, the co-founder of Sun Microsystems, famously told investors it was insane to pay 10-times sales for Sun’s stock. Ten!

At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends.

 

That assumes I can get that by my shareholders. That assumes I have zero cost of goods… that assumes I have zero expenses… that assumes I pay no taxes… assumes zero R&D.

If the market dumpster fire we trudged through in 2022 taught us anything, it’s that we must swing our portfolios away from this:

We’re Swapping Share-Price “Flameouts” Like This…

That’s the chart of “America’s ticker”—the SPDR S&P 500 ETF Trust (SPY)—last year. I call SPY “America’s ticker” because it’s by far the most popular way to track the S&P 500, a staple in many folks’ portfolios.

But its popularity does not translate into safety. Just holding this simple index fund last year meant taking a 20% haircut—with plenty of heart palpitations along the way! And even with this year’s rebound, the S&P 500 is still 4% below its January 2022 levels as of this writing.… Read more

This retirement portfolio pays 12.4%. Which means, on a million-dollar stake, these stocks dish $124,000 in dividend income alone.

That’s fantastic, needless to say! But are these stocks safe enough to actually retire on?

After all, we’re not looking to collect a 12.4% yield and lose it in price. Heck, we’re not interested in losing capital at all. We want the 12.4% with stocks that are at least steady.

Most common stocks would be in trouble if they paid 12.4%. But these are business development companies (BDCs), which yield so much because they have a special carve out from Uncle Sam.… Read more

Sixty percent gains, needless to say, are nice!

They can be the difference between a comfortable retirement and, well, one where we’re a bit too concerned about losses.

A million dollars is plenty to retire on dividends. But isn’t $1,600,000 even better?

With a million, an 8% yielding portfolio dishes $80,000 per year in dividends. Nice.

But that 60%-higher portfolio pays $128,200. Even nicer.

Why am I teasing 60%? Because we have the best opportunity to bank big gains—from safe dividend stocks, no less!—since the fall of 2020.

The opportunity is here thanks to a form of “quiet QE” from the Federal Reserve.… Read more

A recession or more rate hikes in late 2023? We contrarian dividend investors don’t care—we’ve zeroed in on a group of stocks that will prosper no matter what.

Three, in particular, are begging us to buy them now. We’ll talk tickers in a moment, but let me start by saying they boast four key strengths we demand when we buy any stock in my Hidden Yields dividend-growth advisory:

• A healthy yield, so we’re starting off with a strong income stream.
  

• Rising dividends primed to keep soaring—and even accelerate. That increases our income stream, the yield on our original buy and, as we’ll see below, drives share prices higher, too.

Our contrarian investing playbook is simple, but not easy.

We buy stocks that others are neglecting. At least currently! This means we secure prices when they are low and dividends when they are high.

Big tech stocks have been bid to the moon recently. But not all Nasdaq plays are expensive. The rally has been narrow, and believe it or not, we have five tech plays paying up to 6.7% available today.

This is a lot of yield in a sector that, sadly, pays less than 1% at large:

Tech Is Back to Yielding Less Than 1%

This is why the sector ranks tenth in dividend yield.… Read more

“Coach Brett, how many points do I have?”

My star player, Captain K, was dominating the basketball game. He’d steal the ball, storm down the court, and drain the shot. Then retreat into a defensive position and do it all over again.

Two points after two points after two points. I’d have lost count if I had to count. Fortunately though, we weren’t keeping score.

Most leagues these days don’t keep score when the players are only five years old. The run is more important than the result.

But my man K knew he was “killing it,” as his dad told him from the sidelines!… Read more

Few people would put the words “artificial intelligence” and “big dividends” in the same sentence—but those folks have never heard of closed-end funds (CEFs)!

These “yield machines” are perfect plays on the surging AI megatrend for three reasons:

• Big dividends: Thanks to CEFs, we can “download” big cash payouts from stocks that pay low (or no!) dividends themselves. Getting our payouts in cash, rather than paper gains, is priceless in the sometimes-volatile world of AI investing.

• Lower volatility: Speaking of volatility, as most equity CEFs invest in various sectors—not just tech—we get some extra insurance over folks who try to “cherry-pick” the AI trend themselves.