Author Archive: Brett Owens

The Wall Street Journal Reports:

Gee, thanks. I have something to add, WSJ friends.

IT’S A BANKING CRISIS. DON’T BUY DIVIDEND ETFs AT ALL!

In a rising market, fine. I can hold my nose. Though, you know, even a popular ticker like Schwab US Dividend Equity ETF (SCHD) is a lazy option that’ll cost you.

SCHD owns 104 dividend stocks and PepsiCo (PEP) is its top holding. PEP pays a piddly 2.6% but its yearly dividend growth is decent—not great but not AT&T (T) awful, either.… Read more

Let’s dive into two simple indicators that can tell us when a dividend stock is set to lurch higher. Once we’re through, I’m certain you’ll wonder why you never thought of them before.

Last time we tried them, in my Contrarian Income Report advisory, they delivered a quick 90% return (more on that below). And we’ve got another nice setup to put them to work again.

Short Selling Is Back in the News—But We Take a Different Approach

First up, short selling—a phrase that strikes fear into most dividend investors’ hearts, for a couple of (good!) reasons. The main one being that selling short (or selling a stock you’ve borrowed in hopes of buying it back later at a lower price) can expose you to infinite losses, for a simple reason: share prices can theoretically rise without limit.… Read more

The best thing about a multi-year bear market? The bargains.

Today we’ll talk dividend deals. Big payers. Stocks yielding up to 10.3% and trading for as little as three-times free cash flow (FCF).

That’s right—3X FCF!

Profits are Fake, Cash Flow is Real

Wall Street accountants can “adjust” just about every number in a 10-Q. “Adjusted earnings.” “Adjusted EBITDA.” Heck, I’ve even seen “adjusted revenues.” But it’s next to impossible to “adjust” cash. Cash flow is, well, cash flow.

Also, cash is ultimately what pays us. Dividends aren’t paid out of sales, or even paper earnings, but out of real cash.… Read more

Hey kid, want some candy?

Don’t worry about the wrapper. It, um, came like that.

No? No candy for you? You’re sure?

OK fine. Maybe you’re not hungry, but how about this 31% dividend?

Don’t worry. The stock made its last dividend payment of $0.27 just fine.

No? No 31% yield for you? You’re sure?

OK fine. And, honestly, smart move. I would imagine that January dividend payment is the last one we ever see from First Republic Bank (FRC).

Fundamentally, FRC (and other banks, for this matter) are flawed, perhaps fatally so. They are not paying competitive rates.… Read more

We’ve got a once-in-5-year buy window open to us in one of the highest-yielding investments out there.

And (for once) we can thank the Fed for these cheap 8%+ payouts!

I’m talking about closed-end funds (CEFs), a corner of the market where rich 8%+ yields (and monthly payouts) are the norm.

These (too) often-ignored funds are set to spike because the last time Powell & Co. acted like they are now, CEFs’ prices soared—and they handed their lucky investors big price gains to go along with their huge dividends.

If 2023 Is 2019 Redux, CEFs Will Explode Higher

To see what I’m getting at here, think back to late 2018.… Read more

Select bank stocks may be cheap, but why settle for 2% to 3% yields?

Let’s really bang on the bargain bin and for dividends between 8.3% and 9.4%. These yields are available thanks to the current banking fears.

Fortunately, these payouts are more secure than vanilla investors appreciate. Hence, the dividend deal.

A Better Way to Play Banks

I wrote a few weeks ago about how mainstream investors are trying to time a bottom in banks.

Fair enough. Banks are extremely cheap right now by a well-known measure of long-term value: CAPE (cyclically adjusted price-to-earnings), which is the price divided not by the past year of earnings, but the past 10 years.… Read more

We’re heading towards the most telegraphed recession of all time. At least in recent memory.

So should we sell everything? Not exactly. Granted, recessions are usually bad for stocks. Vanilla investors who own nothing-but-ETFs are in a tough spot.

But since you’re reading this, I assume:

1. You pick stocks better than a robotic ETF.
2. You’re not scared of a stinkin’ recession. You’re here looking for high-yield exceptions to the “sell everything” rule.

I appreciate that about you, my fellow contrarian. If I thought rules applied to me, I would have made it past age 26 in Corporate America! This is why we get along so well.… Read more

I’m not going to lie to you: this market is headed for a fall. And if you’re caught holding the wrong dividend payers, you could be in for some serious losses indeed.

How serious? Well, the worst of the four stocks we’re going to delve into below—Cracker Barrel Old Country Store (CBRL)—plunged 26% last year, much further than the S&P 500. If you hold this one, or the other dangerous dividend we’ll discuss below, it’s time to cut your losses and get out now.

Cracker Barrel Plunged in ’22—a Sign of Things to Come?

But we’re not only going to sell today—we’re going on offense, too.… Read more

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