Author Archive: Brett Owens

Fed chair Jay Powell is our kind of income investor. He’s allocated up to $750 billion to buy individual corporate bonds. Perhaps Jay is sick of being told what to do, because he (like us!) is clearly on a mission to help his central bank retire comfortably on dividends.

He realizes that US Treasuries don’t have the oomph he needs. As I write, the 10-year bond pays less than 0.7%. If Jay had tossed his $750 “billies” into T-Bonds, they wouldn’t even net him a “lame” $5 billion annually.

Instead, our man hired investment firm BlackRock to buy ETFs like the iShares iBoxx High Yield Corporate Bond ETF (HYG).… Read more

It really is possible to find stocks that grow your money 15%+ a year forever—even in the middle of a pandemic.

Better still, these “unicorns” are a cinch to find. We only need to look for one thing: a dividend that’s growing—and ideally accelerating.

I know that sounds like a tall order, with S&P 500 payouts plunging $42.5 billion in the second quarter. But that figure masks the fact that many companies are still hiking their payouts—and will continue to, even if this crisis drags on longer than we expect.

Dividend Growth = Share-Price Growth

Of course, it’s not good enough to simply pick a few stocks with fast payout growth and call it a day.… Read more

Lockdowns have been tough on real estate investment trusts (REITs). When April 1 hit, the rent stopped getting paid across the world. That’s of course bad for landlords and, in turn, REITs and their investors.

Now it hasn’t been all bad since then. Sure, old school retail and shopping malls are done—but we knew that already.

Check this out—it’s the rent collected by the REIT sector for April, May and June. All of our newly completed “shutdown” and “re-opening” and “just kidding, we’re closing again” months. Would you believe that apartment landlords collected 97.5% of their typical rents in June?

(Source: Nareit)

Yes you read that right.… Read more

Almost One-Third of NYC Restaurants Missed June Rent, Survey Finds

Scan the business headlines (and let’s be honest, who actually reads anymore?) and we’ll see ominous headlines like this. Makes us wonder who would want to be a landlord in this economy?

It’s not just NYC. Here in California, most restaurants are, once again, not allowed to offer indoor dining. Epidemiology arguments aside, our beat here is money, and how many restaurants are supposed to make money right now I do not know.

If they’re not making money, who knows if they’re paying the rent. Taking that a step further, we might also question who wants to own any real estate investment trusts (REITs)?… Read more

In normal times, real estate investment trusts (REITs) are a great way to cut your portfolio’s volatility—and double the income you’d get from regular stocks.

Of course there’s nothing typical about 2020, but this “new normal” actually presents an especially excellent opportunity to buy select REITs on the cheap. I’m talking about cash cows with rent flows that were not disrupted by shutdowns.

Cheap stocks with higher-than-usual yields and bulletproof cash flows? Read on and we’ll sign up for this deal together.

REITs, remember, are “no drama” pass-through investments: they collect the rent on their properties, take out enough to keep their buildings in good working order, then pass (almost all of) the remaining cash to you as dividends.… Read more

Smart, innovative retail dividends are going to hold a special place in the hearts of many income investors when this pandemic is through. I recently mused about my springtime e-tailing adventures out of Puerto Backyarda. While I got my mister to stay cool, many opportunistic dividend buyers are going to enjoy hot payouts that double or better in the years ahead.

Stores such as Best Buy (BBY) and Home Depot (HD) have kept people slapping away on their keyboards and occupied with home projects. Even more importantly, retailers like Walmart (WMT), Amazon.com (AMZN) and Kroger (KR) not only supplied Americans with the basics, but they also kept cranking out services and strategies to keep people safer as they gathered up what they needed.… Read more

As our quarantine headquarters migrated from the cozy accommodations of Los Living Room in March to the spaciousness of Puerto Backyarda in April, life got a bit more manageable.

Then, in May, it got hot. Really hot.

“Want the hose?” I offered. “It doesn’t feel like it’s 103 if you get your feet wet.”

My Puerto guest, a friend who’d stopped over for an afternoon beer (actually, three 100 calorie “light hazy ales”) was not amused that we were stuck outside. The poor guy was wearing pants, and quite frankly, he didn’t stand a chance.

It goes without saying that he has not yet returned.… Read more

With the epic “relief rally” finally on fumes, it’s time to consider jettisoning any dividends that (let’s be honest) should have been sold in February. Stock prices are quite disconnected from their underlying fundamentals, and the four firms we’re going to discuss today have particularly poor prospects.

Sure, these yields appear generous. But these days, we can lose this much in a few bad trading sessions.

(Low payout ratios—the percentage of cash flow being paid as dividends—are usually preferable. A negative ratio is not! More on this wreck shortly.)

As you know, I don’t provide personal financial advice. That said, if I owned any of these shares, I’d sell ’em!… Read more

With pandemic cases once again in full focus, the market is (once again) trading like its assets. Everything’s up big one day, everything’s down big the next.

We rational, contrarian-minded income investors however know that the stock market is indeed a “market of stocks.” It doesn’t make sense for everything to trade “as one.” We should look to buy the underappreciated, underowned dividends on these dips.

I’m tracking a number of undiscovered dividend growth stories in the underfollowed small-cap space. Most investors don’t consider income from small caps. These companies don’t attract the eyeballs that mega-cap tech firms and well-known consumer brands do, so analysts and the media typically avoid the small-cap space, even in good years.… Read more

Money printing is back in a big way, and we’ve been on the beat all month long. Two weeks ago, your income writer mentioned the other “I” word, inflation, and watched our customer service email box fill up.

Readers, rightfully so, were concerned that Fed Chair Jay Powell has been not-so-subtly orchestrating the largest money creation effort of all time. JP created more than $2.5 trillion since March, and in doing so, made all previous quantitative easing (QE) efforts look like amateur hour:

“Now That’s How You QE!” – Chairman JP

Lat week, your dividend analyst further stirred the pot by mentioning the other “D” word, deflation.… Read more