Author Archive: Brett Owens

Today I’m going to show you a two-part dividend-growth strategy that actually made money for one group of investors in the disastrous year that was 2008.

Before we get into the specifics on this technique and an example stock, I want to level with you: I do believe that stocks are likely to head lower in the coming weeks.

That said, if we look one year out from today, I like our chances. But we’re going to give ourselves an added level of security by purchasing stocks with these two traits:

1. Strong—and better yet accelerating—dividend growth, because a rising payout is the No.

Ten percent dividends are no joke.

We’re talking $50,000 in annual payout income on $500K. Or $100,000 in yearly dividends on a million dollars.

This is serious cash flow. And best of all, we’re talking yields—which means, if we buy right, we can sit tight, collect these payouts and keep our nest egg intact.

Generous yields give us a big advantage over vanilla investors, who fawn over traditional blue chips (paying 2% to 3%). That’s not enough. It’s easy math.

Let’s reference the million-dollar portfolio again. If we invest in the “broader market,” the S&P 500 yields 1.5%. It’s proxy, the SPDR S&P 500 ETF Trust (SPY), pays a meager $15,000 in annual income.… Read more

Let’s book these 104% profits today.

We’ll sell this winner and then consider a 9.3% dividend that could really soar in 2023. It couldn’t be any cheaper, either—this high-quality fund is trading at a 17% discount to fair value!

But wait, there’s more in the bargain bin. I’ll also share a 5.9% payer that is, likewise, trading for just 83 cents on the dollar—also 17% off!

More on these incredibly cheap dividends in a moment. First, the winner.

Remember when we “pounded the table” on Exxon Mobil (XOM) in April 2021? We were right. The then-6.1% payer was too cheap!… Read more

We dividend investors know that 2023’s going to throw us some curveballs. So let’s talk about a simple strategy that helps us buy more shares of our favorite stocks during pullbacks.

Because the truth is, the Fed is still hiking, inflation is well north of 2% and the economy is humming along. That last point is a headache for Fed officials as they need to “cool” the economy to get inflation down. That’s code for inducing a recession.

A New Spin on a Classic Strategy

This uncertainty is why I’m counseling caution when it comes to buying stocks these days. But if you are tiptoeing into this market, only do so if:

• You have a long time horizon and …
  

• You do so gradually, using our “modified” dollar-cost averaging (DCA) approach.

A dividend hike is the ultimate sign of dividend safety. It’s also the surest, safest way to “get rich soon-ish” in stocks.

Find me stocks that are raising their dividends quickly and regularly, and I’ll show you some stocks that are doubling every few years.

What drives the dividend? Well, the likelihood that a company is going to raise its dividend (or cut it) is directly related to its payout ratio, or the percentage of its profits that it is dishing out to shareholders as dividends.

As a rule of thumb, a payout ratio below 50% is a sign of dividend safety.… Read more

Shall we turn 2023 into a bounce back year for our retirement portfolios?

How about we shoot for, say, 23% total returns?

The surest way to do it is by employing a technique I call the dividend magnet. It’s safe. Reliable. And works beautifully on the back side of a bear market.

A few weeks back I gave a guest lecture for a finance class at California State University, Sacramento. One of the students, to put it lightly, was excited to make money in stocks.

His hand went up from the back of the classroom. (Nobody sits in the front rows.… Read more

Everywhere you look, there’s a subscription service begging for your attention: from Netflix (NFLX) to cable TV … and even a Hot Sauce of the Month Club.

Pretty well everyone has at least one, and many folks have several. One study showed that 7% of American households have six or more services for video alone!

There’s a reason why companies charge recurring revenues, of course. It’s a great business model to hit up our credit cards monthly.

But great businesses don’t always translate to rewarding stocks. We contrarian dividend seekers tend to steer clear of the streamers because:

1. They pay no dividends!

We are heading into the most telegraphed recession in American history. Federal Reserve Chair Jay Powell said it himself last month:

“As rates go higher, it’s hard to see a soft landing.”

Gee Jay, no kidding. Your Fed is squeezing us directly into a slowdown with these short-term rate hikes and balance sheet drawdowns.

Now I’m not saying it’s the wrong move, Jay. You printed a lot of money in 2020—so much that we fell way behind the inflation curve in 2021. Economic indicators and price numbers are still running hot.

So I’m not surprised to see your feet on the breaks for most of the year.… Read more

Last week in these pages we sang the praises of bond god Jeffrey Gundlach. His DoubleLine Income Solutions Fund (DSL) looked poised to pop:

DSL investors have three ways to win here. First, the fund pays an electric 11.5% yield. Next, its NAV is likely to rise as both short and long rates decline. And finally, the fund trades today at a 4% discount, which means we are getting paid to ride shotgun with Gundlach.

DSL: 3 Ways to Win (Last Week’s View)

We also discussed that DSL dishes its dividend monthly. Which is almost 1% every 30 days! Unheard of.… Read more

China’s over-the-top COVID lockdowns are setting up a surprising “all-American” dividend opportunity for us contrarians.

The pushback, which President Xi (shockingly) didn’t see coming, has shuttered plants left and right. Last Monday alone, Honda, Yamaha and Volkswagen closed factories in China, as did Nissan, Mazda and Mitsubishi.

And Apple (AAPL) has likely lost out on six million high-margin iPhone 14 Pros as protests shut down a factory in Zhengzhou run by key supplier Foxconn. The stock responded instantly:

Apple: Still a Little Too Multinational for Wall Street

How, you may wonder, is all this bad news setting up a dividend opportunity for us?… Read more