3 Dividend Growers Cashing in on the Mobile Payment Boom

Brett Owens, Chief Investment Strategist
Updated: February 22, 2016

It’s a one-two punch I love to see in a stock: a growing dividend and a rock-solid commitment to research and development.

These companies serve up a profitable combo: immediate cash in your pocket and potential for huge gains—and even bigger dividend payouts—as they churn out the next wave of must-have products.

I bring this up because right now, S&P 500 companies are spending big on both R&D and dividends.

Here are the latest numbers from FactSet: in the 12 months ended September 30, 2015, S&P 500 firms poured $257.8 billion into R&D, a 10-year high. At the same time, they doled out $410.8 billion in dividend payments, also the highest total in at least a decade.… Read more

3 Energy Dividends About To Be Slashed

Brett Owens, Chief Investment Strategist
Updated: February 19, 2016

Oil prices picked up this week on the promise that Saudi Arabia and Russia would coordinate a cut in production. But surprise, surprise – there’s already speculation that they’re both going to cheat.

That’s going to keep oil prices low – and it’s going to threaten the dividends of many producers, both here and abroad. For some reason, many energy management teams believe that this inventory glut and price devaluation cannot last. Apparently they forgot what prices looked like pre-2005:


As long as money managers are making bullish bets on oil, the price is going to stay low or head lower.… Read more

5 Dividends Set To Double (Again)

Brett Owens, Chief Investment Strategist
Updated: February 17, 2016

It’s easy to beat the stock market – just buy stocks in companies that pay dividends, and boost their payouts every year.

While dividends help you “cash out” of your investment over time, the annual raises are what really make you money. Let me explain…

Even after a 15% pullback, the S&P 500 yields just 2.3% today. Which means if you buy an index fund today, and you never saw a dividend increase, it’d take you more than 40 years to get your initial investment back in cash.

Fortunately companies with growing earnings often do pass their higher profits along to shareholders.… Read more

From Worst to First: Ranking the REIT ETFs

Brett Owens, Chief Investment Strategist
Updated: March 24, 2016

Slowly but surely, investors are once again prioritizing dividends.

After suffering a full-on panic attack over the Fed’s interest rate hike last year—and ditching high-yielding investments like real estate investment trusts (REITs) in the process—they’re having a change of heart.

You can see it in the performance of the Vanguard REIT Index Fund (VNQ), an ETF we’ll examine in more detail below: so far in 2016, VNQ has returned 2% versus just 0.5% for the S&P 500.

Call it a late realization that the rate “liftoff” is mostly a non-event for REITs. Because even if the Fed follows through on its plan to raise rates this year (a big “if” in light of the wavering global economy and cowed US inflation), you’ll still be waiting a very long time for safer vehicles like Treasuries to play in the same league as REITs throwing off yields of 6% or more.… Read more

1 Big Dividend To Buy And 5 To Sell Now

Brett Owens, Chief Investment Strategist
Updated: February 12, 2016

Business development companies (or BDCs) have been hit hard over the past few quarters. Those with large energy investments have seen their stock prices plunge along with oil.

But this is a love-hate story for investors. Even as these stocks have grown more speculative, these issues have garnered even more attention for their fat dividends. Many BDCs now have yields north of 10%.

Unfortunately, first-level investors tend to flock to the riskiest BDCs, because they have the highest stated yields.

Like many contrarians, I’m an income investor who’s always on the lookout for a good value stock. I love buying stocks of unloved companies at a bargain.… Read more

3 Big Dividends To Buy Before The Market Rally

Brett Owens, Chief Investment Strategist
Updated: February 10, 2016

Stocks are about to rally – just ask the rare bettor who took the Broncos on Sunday.

While Sunday’s Super Bowl was a one-sided affair, the betting that preceded kickoff set records in sports books. More than 80% of the money and bets helped push the Carolina Panthers from 3.5-point to 6-point favorites. It’s the public’s favorite game to bet on, and they piled cash on the team that they just saw cruise to two blowout wins in a row.

Closer to kickoff, the “smart money” came in on Denver. The professionals waited through the initial wagering, and then bought value where they saw it.… Read more

The Best “Pick and Shovel” Play for the E-Commerce Boom

Brett Owens, Chief Investment Strategist
Updated: February 8, 2016

If you think you’re too late to profit from e-commerce bonanza, think again.

Because even though the first web-based purchase was made more than 20 years ago, online shopping is still growing at a breathtaking pace, with a 15% expansion in 2015 alone.

But despite that fast growth, web-based purchases only made up 7.4% of total US retail sales in the third quarter, according to the Census Bureau, so the trend has plenty of room to run yet.

Of Picks, Shovels and Clicks

When most people think of e-commerce, the first name that leaps to mind is (AMZN). There’s good reason for that: according to Macquarie Research, the retail giant accounted for more than half of all e-commerce growth last year.… Read more

The Best, and Worst, Dividends in Big Oil

Brett Owens, Chief Investment Strategist
Updated: February 5, 2016

At first glance this looks like a terrible time to buy energy stocks. Oil prices are at historic lows, demand has pulled back, inventories are climbing, and global manipulators like OPEC and Iran are doing little to help.

But contrarian investing is successful because we invest against the herd and simple “first-level” notions. I warned you to stay away from big oil when the goo was trading 50% higher, and I hope you listened. But oil prices will eventually find a bottom – and it’s almost time to get our big oil shopping list ready.

The S&P 500 pays just 2.3%, but the firms I’m talking about pay from 3.9% all the way up to 8.7%.… Read more

5 REITs To Buy Now And Hold Forever

Brett Owens, Chief Investment Strategist
Updated: March 24, 2016

Now that everyone’s a bit fearful, it’s time for us contrarians to get greedy for yield.

Recently, we discussed three great dividend stocks to buy now and hold forever. These top-notch businesses are going to grow their earnings steadily in the years and decades ahead. And they’re selling at discount prices for the moment, thanks to China’s roulette wheel of a market (which has zero bearing on these companies long-term).

My only problem with these firms? Even at bargain prices, the highest payers only dish 3.1% annually.

Real Estate Investment Trusts (REITs) provide an answer to the yield dilemma. By definition, they send most of their earnings back to investors in the form of dividends.… Read more

2 High Yield Stocks to Buy and 2 to Dump Immediately

Brett Owens, Chief Investment Strategist
Updated: February 1, 2016

If the market’s winter of discontent has a silver lining, it’s this: dividend yields have lurched skyward, while value measures such as price-to-earnings ratios have sunk.

Translation: now’s the time to snap up top-notch dividend-payers at fire sale prices.

But there’s a common mistake you must avoid at times like this: simply seeking out stocks with high yields and low P/E’s and thinking your job is done. That’s because many of these companies are “yield traps”: their earnings and cash flow can’t back up their hefty payouts.

When the inevitable dividend cut comes—dragging the share price down with it—these investors will be left holding a very empty bag.… Read more