Author Archive: Brett Owens

Over longer time periods, dividend stock prices tend to follow their dividends—for better or for worse.

Sometimes, the stock price gets there first. This can be a race to the sky, in the case of a rising dividend. Or a race to the basement, when a payout is about to be cut.

For example, we had been concerned about Kraft Heinz’s (KHC) dividend for years. Income investors “sniffed out” the inevitable payout cut before the lower quarterly dish became official:

Kraft’s Stock Price Tipped Off Its Dividend Cut

Investors waste no time ditching a troubled dividend when a firm has hacked its payout in the past.… Read more

We’ll talk about protecting our retirement portfolios—and finding safe dividend stocks—in a moment. But first, let’s appreciate the Ukrainian woman who offered sunflower seeds to Russian soldiers in her neighborhood.

You’re occupants.
You’re fascists.
Take these seeds and put them in your pocket
So at least sunflowers will grow when you all lie down here.

She gave the soldiers a full minute of nonstop verbal barrage. You can watch it with captions here.

Warning, her language is not safe for work—which makes the interaction all the more special. (Hat tip to Ukraine’s Twitter feed for the post. Their government has put on a master class in social media marketing over the past week.)… Read more

I’m about to reveal my very best strategy for pocketing 20%+ upside (and 7.8%+ dividends) from high-yielding closed-end funds (CEFs).

It’s a “rinse and repeat” move that can help you grab the biggest gains from these potent income investments, lock in those wins, then sidestep the pullbacks. (I’ll also show you two ridiculously cheap CEFs throwing off massive yields up to 11.4%.)

It’s the perfect time to put this strategy in play because the Ukraine mess, and the broader market dumpster fire, have set us up with some sweet deals in CEFs.

The One (and Only) Predictor of CEF Upside

Besides massive dividends, CEFs stand out because it’s easy to tell if they’re truly oversold and ready to gap higher.… Read more

The S&P 500 is about as pricey as it ever gets. It’s also in freefall as I write.

This is good news for anyone looking for a future bargain. The plunge, however, is really bad news for most retirees who don’t read this column. They tend to own nothing except “America’s ticker” via the SPDR S&P 500 Trust ETF (SPY).

At 24-times earnings (P/E ratio), SPY is expensive. After all, who has 24 years to wait to get paid back?

But the actual payback period is even worse for SPY. Most of its firms don’t pay out all of their profits as dividends.… Read more

We contrarians make our money by buying when things look bleak. We did that, and we’re up 149% on this excellent energy dividend.

But our strategy has suddenly become popular. Heck, I saw a front-page piece on Bloomberg.com outlining our “Crash ‘n Rally” energy strategy!

So, what do we do now?

We’ll talk about next steps for energy dividends in a moment. First, let’s recap how we got here so that we can decide if we want to order another quadruple-shot of Texas tea or step aside of the mainstream herd.

In April 2020, crude oil prices crashed. They actually hit negative territory, which means producers were paying people to take the goo off their hands.… Read more

With the market melting down, dividend stocks have built-in cushions. Unlike profitless tech shares, which rarely pay, our dividend payers’ yields go up when prices go down.

The result? Stronger price action for our favorite yield plays, thanks to attention from NASDAQ refugees.

But we need to be extra vigilant about dividend cuts. They, after all, provide a sickening “double whammy.” We lose our cash flow and some capital as the shares get repriced lower post-cut. And the drop can be even worse in panicked markets like today’s.

AT&T Investors Suffer Over and Over—From 1 Dividend Cut

AT&T (T) is a prime example.… Read more

The stock market doesn’t just hand out safe yields up to 11.8%, vanilla money managers will tell you. And they are mostly right—but sometimes wrong.

When these 11.8% dividends are safe to buy, it can really pay to be contrarian.

An 11.8% yield means that a million-dollar portfolio can generate $118,000 in passive income per year. That is a solid six-figure salary to start with.

It is dividends like these that make mREITs (mortgage real estate investment trusts) so attractive. We’ll highlight three today that yield between 10.3% and 11.8%. But first, a business primer.

mREITs: Big Dividend Rewards (with Risks)

Equity REITs own and maybe even operate a number of properties, be they malls, hotels, hospitals or even driving ranges.… Read more

If you own a bond fund, it’s probably down in recent months. Let’s talk about why and walk through three popular fixed-income ideas from worst to first.

We’ll start with the iShares 20+ Year Treasury Bond ETF (TLT). TLT is the knee-jerk investment that many “first-level” investors buy when they are looking for bond exposure. Unfortunately, there are two big problems with TLT:

1. It only yields 2.1%.
2. Worse yet, its 19-year duration is drubbing its total returns.

Any kid knows that 19 years is “way too long” to hold a bond when inflation is running a hot 7.5%. (Please, somebody get these TLT investors a Contrarian Income Report subscription!)… Read more

There’s a “double shot” of upside waiting for us in real estate investment trusts (REITs) right now, and some of these companies—like the 3 we’ll discuss below—are so stuffed with cash they can’t hike payouts fast enough!

REITs are among our favorite dividend plays because:

• They’re “pass through” entities—REITs own property ranging from apartments to seniors’ homes and malls. They simply collect rent checks, take out enough to keep the buildings in good shape, then hand the rest to us.

• They pay zero corporate tax, so long as they pay out 90% of their net income as dividends. This tax “hall pass” means even more dividends (and faster dividend growth!)

Nearly two years ago, our Contrarian Income Report service picked up cheap oil dividends that, at the time, yielded nearly 11.8%. With oil trading at negative prices (meaning producers were paying people to take barrels off of their hands), our purchase didn’t feel warm and fuzzy. But then again, most successful contrarian trades don’t.

We recognized that oil prices were likely in the midst of a “Crash ‘n’ Rally” pattern. This is an oil-price phenomenon that has played out several times before.

We discussed this back in 2021:

Energy prices tend to “crash ’n’ rally.” The crash is quick, while the ensuing rally lasts for years.… Read more