Author Archive: Brett Owens

Today we’re going to bulk up our dividends—and position ourselves for some nice gains—with a group of stocks that pay us four ways as interest rates head skyward:

1. By paying a dividend;
2. By growing their dividend;
3. By repurchasing shares, and;
4. Through the pure profits they “bank” (hint!) as rates rise.

Let’s take that fourth point first, because as you likely know, the 10-year Treasury rate—which drives rates on everything from mortgages to car loans—is en fuego, having surged from 0.9% to more than 1.5% in less than two months.

Granted, a 1.5% Treasury rate would be considered low pre-pandemic. But now it has us choking on our morning coffee!… Read more

Anyone up for a 10.2% payout? One that is powered by profits that should actually rise alongside interest rates?

If so, I’ve got a three-letter acronym for us:

B-D-C.

Business development companies provide debt, equity and other financing to small and midsized companies, effectively acting as banks because banks often don’t want to take on that level of risk. And because they’re primarily investing in companies that aren’t on public markets, BDCs serve as de facto private equity investments—but ones that retail investors like us can get in on!

BDC structures are similar to real estate investment trusts (REITs). Both were created by Congress—REITs in 1960, BDCs in 1980.… Read more

On Sunday night, our old friend exclaimed to my wife and me: “How have you all been??”

It’d been, well, almost a year since we’d been to her bar. We had plenty to catch up on with our drink-slinging pal as we sipped and snacked. Back on the home front, our babysitter had recently resurfaced and appeared to have bedtime under control. It was nice to have a throwback evening, the type we all took for granted just 12 months ago.

In the interim, many income investors have, likewise, taken low long-term rates for granted. Not we contrarians, of course.… Read more

Stocks or bonds? Why choose when:

1. Stocks pay just 1.5%
2. Bonds pay just 1.3%, yet
3. There are little-known hybrid instruments yielding up to 7.9%!

These vehicles aren’t risky. They just happen to be favorites of Wall Street insiders who don’t want income investors like us crowding their favorite trades.

Unfortunately for them, we are not going to apologize for this article in advance. It’s time for us to discuss how to take the 1.5% yield from the S&P 500, the 1.3% yield from 10-year Treasuries—throw each in the trash—and instead type in the “convertible bond” tickers we’re not supposed to know about.… Read more

The S&P 500 is still levitating, and if you’re like me, you’re starting to feel like this bull run is on borrowed time.

It’s understandable. The economy is just now stumbling to its feet, yet interest rates are already creeping higher. I think you’ll agree that we need higher borrowing costs like we need a hole in the head!

Treasury Rates Bust Through the 1% Barrier

Sure, 1.2% is a historically low number, but bear in mind 1% is an important psychological barrier, and we’re already well beyond that—and once rates broke through it, you can see how quickly they took off.… Read more

High-yield bonds have never paid less. Which is too bad, because let’s be honest—dividends are the reason we income investors wade in “junk bond” waters in the first place.

Fortunately, by being selective rather than lamestream, we can double our existing high-yield bond dividends. Nothing fancy, either. We sell the unselective ETFs and buy the ones with proven bond investors at the helm.

Before starting, let me make one huge point. It is true that almost all actively managed equity mutual funds aren’t worth the management fees investors pay. But some actively-managed bond funds most definitely are worth it.

The ETFs we would be selling are the two most popular high-yield bond ETFs.… Read more

Today we’re going to discuss the secret to double-digit annual returns every year, forever, with secure dividend stocks.

It’s simple but not easy. Here’s the hint. We must seek out hefty recurring payouts from stocks with dependable recurring revenue!

It’s one of the oldest business models there is, and it’s hands-down the best setup for us dividend investors: customers pay every week, month, year or whatever, giving a company predictable—and ideally growing—profits.

They then send those profits our way as predictable—and growing—payouts! Plus, many of these firms buy back their own shares too. Which, in turn, makes each share we own more valuable on a “per share” basis.… Read more

If we learned anything from 2020, it was the value of a few extra rolls of toilet paper. A close second? The reminder about the value of a reliable dividend.

This lesson has been taught over and over. The dot-com bubble. The Great Recession. The “COVID crash.” And sure enough, first-level investors don’t learn a thing—they chase one fat yield after another into the ground.

We next-level income investors know better. It’s important to consider the business engine under the hood. When we find cash flow machines like the eight dividend payers we’re about to discuss, we’re talking about decades of payments.… Read more

Another hand went up. I pointed for the next question.

When you consider dividend investments, Brett, what is more important in your opinion:

• The current yield and value of the stock itself, or

• The “engine” that is driving the business and the profits?

“Great question,” I replied. “The business engine. Always consider where the cash flow is coming from, first.”

In other words, if the business is humming, the dividends will be there. And as the payout keeps chugging along, so will the stock price. A dividend will protect the stock from downside and, with growth, provide a sweet kicker of upside.… Read more

You and I both know there’s a problem with the sugar high the stock market’s been on. Does it mean we should dump some of our beloved dividend stocks and try to buy them back at lower prices?

We’ll talk income strategies and market timing in a minute. First, let’s talk about these concerning behaviors exhibited by America’s odd couple, Mr. and Mrs. Market.

First up, we know a correction is coming. When a group of folks on a Reddit message board can drive one stock—GameStop (GME)—up 1,700%+ in a month, you know the market has become a bit unhinged.… Read more