Author Archive: Brett Owens

As dividend yields and interest rates dropped in recent decades, income investors looked for ways to generate cash flow from stocks. Selling (“writing”) covered calls is one strategy that has gained attention.

It is certainly a conservative options strategy that most income investors think they should do. The math is compelling.

Here’s how it works. We would buy a dividend stock like Exxon Mobil (XOM) for its $0.87 per share quarterly payout (a 6% yield). Then we would write a covered call with a “strike” price just above the stock’s current level.

For example, XOM trades below $60 as I write.… Read more

Nice to see our friends over at Barron’s finally catching up to us on the big dividends sitting right under our noses in oil and gas!

It’s almost like the magazine’s writers are sharing a subscription to our Contrarian Income Report service, because the six stocks they cited in an article they ran last week are almost all picks in our portfolio—specifically our “crash ‘n rally” energy bucket.

(It’s not the first time’s Barron’s has shadowed us. In April, they put out a strategy for retiring on dividends, a subject we literally wrote the book on two years ago.)… Read more

The small-cap universe is offering investors one of the most elusive prizes of 2021:

A bargain.

As I recently wrote, Wall Street’s gaze has been fixated on the nearly uninterrupted yearlong rally in large-cap stocks—so much so that they appear to have ignored a full-blown correction in the small-cap Russell 2000.

Your average investor will be jazzed at the prospect of snapping up growth on the cheap, or at least cheaper. The blue-chip indices are overbought by just about every calculable metric, so even a relative bargain is a sight for sore eyes.

But craftier investors like you and I that don’t judge smaller books by their covers know that, if we know just where to look, we can get more than mere growth out of the market’s more diminutive picks.… Read more

If you’re waiting for a pullback to put money to work, look no further than small caps.

Early last week, the S&P stopped the bleeding on a harrowing multi-day 2.9% decline. By midweek, “big cap” investors had recouped more than half of their losses.

Was that it? My guess is yes, that was a wrap on the market’s mini-drama for another month or two.

Our intrepid Federal Reserve continues to print a whole lot of cash, which serves to backstop any pullback. The Fed is still buying $120 billion in bonds per month, which adds up to “real money” after a while—nearly $1.5 trillion annually!… Read more

Stocks are floating higher daily, and that’s prompted a lot of readers to ask me when they should sell a dividend stock and take profits—and when they should let it run.

You’re probably sitting on some nice capital gains these days, too, thanks to the COVID rebound rally, and have asked yourself the same question.

Today I’m going to give you three indicators I always use when making buy/sell decisions for my Hidden Yields dividend-growth advisory. It’s a simple setup that lets a too-often-ignored factor—dividend growth—dictate our next moves.

Buy (and Hang on!) When Dividends Outrun Share Prices

If you’re a regular reader of my columns on Contrarian Outlook, what I’m about to say won’t surprise you: dividend growth is the No.… Read more

These dividends are about to break free from their regulatory shackles. Once the cuffs are off, we’re going to see payout hikes up to 100%.

Even the dividend growth “laggards” in this group are due for 11% and 17% hikes. As these payouts pop, their stock prices may certainly follow.

Here’s why.

For the past decade, income investors have overlooked the big banks. The Great Recession burned a hole in the brain of every retiree who lived to tell about it.

The U.S. Treasury bailed out America’s financial sector with the Troubled Asset Relief Program, which disbursed roughly $427 billion to buy toxic assets from (and even equity in) U.S.… Read more

The market looks like it’s about to fall apart. Which means we contrarians will step in, and smartly bank more dividend for our dollar.

Some of us park our dry powder in cash. Others stash in conservative bond funds to juice a bit more yield out of our savings. Let’s talk about these bonds because this is an ideal time to say goodbye to them (for a while!)

As dividend investors, we are naturally allergic to cash. After all, why leave money in dollars earning nothing when we can move it to a stock or fund yielding something?

As I write our Contrarian Income Report portfolio yields 6.3%.… Read more

It’s mid-2021, and stock prices are up, dividend yields are down, and you’re probably wondering what the heck to buy for a decent income stream as we thunder toward 2022.

It’s a head-snapping reversal from where we were a year ago, which makes now the perfect time to step back and plot our next dividend moves.

So let’s piece together our game plan for the rest of the year—and into 2022—by ranking five popular (and not so popular!) investments known for income from worst to first. You’ll find many individual tickers to put on your list here, too—including one yielding a healthy 6.8% today.… Read more

Preferred stocks are the little-known answer to the dividend question:

How do I juice meaningful 5% to 6% yields from my favorite blue-chip stocks?

“Common” blue chips stocks usually don’t pay 5% to 6%. Heck, the S&P 500’s current yield, at just 1.3%, is its lowest in decades.

But we can consider the exact same 505 companies in the popular index—names like JPMorgan Chase (JPM), Broadcom (AVGO) and NextEra Energy (NEE)—and find yields from 4.2% to 6.9%.

If we’re talking about a million dollar retirement portfolio, this is the difference between $13,000 in annual dividend income and $42,000. Or, better yet, $69,000 per year with my top recommendation.… Read more

Collecting dividends is fun. Doubling our money is even better.

From time to time, Mr. and Ms. Market will present us with a deal that includes payouts plus price upside. I’m talking about 50% to 100% returns from secure dividend payers.

These “dividend doubles” require a catalyst. Some event that, if it unfolds, would launch profits—and the firm’s stock price!

Higher interest rates are a compelling “catalyst bet” today. The 10-year Treasury yield tripled between August and April. We noted a few months back that the rate move was due for a breather, and that’s exactly what has unfolded with the benchmark rate briefly edging below 1.3% last week:

Time to “Buy the Dip” in Interest Rates?… Read more