Author Archive: Brett Owens

Most income investors limit themselves to mere “common” dividends. But there’s no need for us to settle for 2% blue-chip yields when we can bank 6%+ payouts from the same companies.

Let’s use Bank of America (BAC) as our example. The stock should keep sailing as the 10-year Treasury rate grinds higher.

Common shares of BAC yield just 1.8% today. (This is what we receive when we type in “BAC” and hit the “Buy” button.) That’s not much. Fortunately, we can look past common dividends for higher yields without sacrificing safety.

Companies also can issue what’s referred to as “preferred stock.”… Read more

The 10-year Treasury is storming past 1.6% yet again. Look out, high yield!

I kid because I love (income). And one-point-six just doesn’t do it for me. Plus, remember, this bounty does not escape the tax man. Any interest income we earn from Treasuries—no matter how sad—is subject to federal and state taxes.

So, if we’re multiplying a nest egg (let’s use $500K) by 1.6%, we must remember that the final answer is probably not $8,000 in annual income. Because if we’re raking in income from any other sources, we should lop off a chunk of this for taxes.

Interest Received is the official IRS tax term, for my fellow tax wonks.… Read more

Goldman Sachs says the Fed will start cutting its bond purchases next month—and that sets up some of our favorite dividend-payers for a quick 61% profit surge. (I’ll reveal the tickers we need to reap this “taper bonanza” in a moment.)

Wait. Why are we taking Goldman’s word here?

Because “Government Sachs” has the deepest DC connections of any bank: former Treasury Secretaries Henry Paulson and Steven Mnuchin are Goldman grads, among many other government bigwigs. When it comes to what’s happening at the Fed, I’d take Goldman’s opinion over that of Jay Powell himself!

A Boon for Dividend Investors

To get at how we’ll flip the taper into big dividends, let’s connect it to a figure we all watch closely: the yield on the 10-year Treasury note.… Read more

Many financial advisors doubt that we can retire comfortably on a million dollars, let alone $500K.

Let me outline our compelling dividend counterpoint—a five-stock portfolio with an average yield of 12.3%.

This generates more than $60,000 in annual income on a $500K portfolio, or a sweet $123,000 in dividends on that million-dollar nest egg. And, most importantly, this “retire on dividends” strategy leaves the principal untouched.

Contrary to popular opinion, we have a pool of dividend candidates. Let’s start with the 879 dividend-paying stocks that yield more than 3% and work our way up the chain:

Believe It Or Not, 50 US Stocks Yield 10%+

Note: U.S.-listed… Read more

If I were a Federal Reserve official—and I were not currently under investigation for sketchy February 2020 trades—I’d really be tempted to “back up the truck” on key taper tantrum dividend stocks.

These obvious payout plays have already soared 56% or more year-to-date. But there’s more to come because their profits are being artificially suppressed by the Fed. (Yes, you read that right. The Fed money flood is boosting everything except for these laggards. For now.) Once this constraint is lifted—or even moderated a bit—their bottom lines are going to boom.

Today, the Fed is buying $80 billion in government bonds every month.… Read more

Investors are sitting on a shot at 100%+ dividend growth and a safe 6.9% yield—and most don’t even know it.

The route to this dividend bonanza runs through real estate investment trusts (REITs) that own apartment buildings. These landlords are raking in cash, with US rents skyrocketing by double digits in the last nine months. (We’ll discuss three specific names shortly.)

Higher cash flows translate straight into surging dividends because REITs are “pass-through” investments: they collect the rent, take out what they need to keep their tenants happy (and renewing their leases!) and send the rest our way.

This pass-through structure is no formality.… Read more

Do retirement solutions come any better than a safe 8% dividend, paid monthly?

This is what we contrarian income seekers love about the Aberdeen Asia-Pacific Income Fund (FAX). It pays 8% annually, dishes its dividend every month and, thanks to the debt situation in China, trades at a 7% discount to its net asset value (NAV)!

Last week, we pointed out a “mini-panic” buying opportunity in FAX. Its price had suffered, but you wouldn’t know it by looking at the fund’s NAV—the value of its bonds minus debt—which has barely budged over the past month:

NAV Was Steady, Pullback Was Price Only

Its price had been punished because armchair market observers fear Evergrande and the Chinese credit markets.… Read more

Let’s jump on the market’s September slide and grab ourselves a sweet “double discount” on 358 totally ignored income plays—and some sweet 6%+ dividends, too. And our new income stream will pay us monthly!

Going Where Other Dividend Investors Don’t

Our route to this big monthly payout does an end run around the misers of the S&P 500. Even though the market dove 3.5% in September, that was only enough to drive yields on the big-name stocks up by—wait for it—0.07%.

In other words, if you dropped a million bucks into an ETF like the SPDR S&P 500 ETF Trust (SPY) in early September, you’d be generating $12,300 in yearly dividends.… Read more

The surest, safest way to double our money in the stock market is to buy the dividends that are growing the fastest.

It doesn’t matter if the broader market is heading up, down or sideways. Over time, stock prices eventually follow their dividends. Show me a growing payout, and I’ll show you a stock price that has serious upside.

Looking beyond current yields for future dividends is a simple yet powerful concept. I know that you already appreciate stocks that pay. It’s why we get along so well.

We can also apply our favorite fundamental attribute—a company’s willingness and ability to put cash in our pocket—to find the safest growth stocks in the market.… Read more

The stock market goes up as well as down and, for whatever reason, it tends to swing wildly in September and October. With last Monday’s intraday price action, we saw our first 5% decline in a year.

The last time the S&P 500 fell by 5% or more was… this time last year.

Losing money isn’t fun. Then again, it is our job to make sure that paper losses stay on the page.

Historically speaking, this is a good month to go shopping. Last October, we locked in 7.3% to 10% dividends—and 51% total returns (in just 12 months!) soon followed.… Read more