Articles

5 Trump-Proof Pharma Dividends Up To 5.3%

Brett Owens, Chief Investment Strategist
Updated: January 15, 2017
Pills

Donald Trump needed just 20 minutes to knock $24.6 billion in value from the nine biggest Big Pharma companies. That was the statistic bandied about recently when the president-elect, at a much-anticipated press conference, declared that pharmaceuticals are “getting away with murder.”

That’s ironic, because investors targeting the sure-fire dividends of Big Pharma stocks might be able to get away with theft.

Trump hasn’t yet entered the Oval Office, but he’s already showing an uncanny knack for creating quick stock dips with just a sentence or two. For instance, in mid-December, he criticized the high spend for Lockheed Martin’s (LMT) F-35 jets, knocking LMT shares down by a few percent. But Lockheed almost completely recovered between then and Jan. 10, and those who bought in at the post-tweet lows are actually up 4%. …
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2 Unloved Buys for 4.2%+ Yields and Double-Digit Upside

Michael Foster, Senior Analyst
Updated: January 13, 2017

Inflation hasn’t been a problem for a long time. In fact, central banks around the world have been fighting deflation, as low growth, pessimistic expectations and slumping oil prices kept prices in check since the 2008/09 crash.

That’s changing, and more people—from economists to everyday consumers—see inflation heating up. That makes now a great time to buy into an asset class few investors pay attention to. I’ll explain why, and name two of my favorites, in a moment.

First, back to inflation: according to the New York Federal Reserve, consumers now expect prices to swell by 2.8%—the highest reading since the middle of 2015. No real surprise there, when you consider that the consumer price index is rising at its fastest pace in over a year:


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2 Big 8% Dividends to Buy (and 1 to Sell)

Brett Owens, Chief Investment Strategist
Updated: January 12, 2017

Not every high yield asset is in danger as rates rise. While some stocks paying 3% may feel the Fed’s pressure, there’s a higher subset paying 8% that should do just fine.

If you’re looking for dividends you can actually retire on, you should familiarize yourself with business development companies (BDCs). They tend to pay big yields because they are required by law to dish most of their profits back to their investors as dividends.

BDCs themselves are investment companies that provide funding to small- and mid-size companies (which typically have a difficult time acquiring funding from larger financiers). BDCs were brought to life in 1980 by Congress to spur U.S. business growth, and as such, they have certain requirements, such as investing at least 70% of their assets in American companies that are worth less than $250 million. …
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How To Make 12% Annually (Forever) From Stocks

Brett Owens, Chief Investment Strategist
Updated: January 11, 2017

“Efficient market” proponents are wrong – you can bank returns of 10%, 12% or more from stocks regularly.

But you need to ignore common Wall Street “wisdom” and follow a simple 3-step formula that I’ll outline for you in a moment.

Most individual investors don’t make anything close to 10% per year because they practice “buy and hope” investing. They pick up shares and root for them to appreciate in price. With no specific plan outlining how they are going to profit from their stocks, they are doomed.

Even “tangible” fundamental drivers like higher sales or profits are no guarantee that you will profit. Ever been frustrated when one of your stocks trended lower after a good earnings report? If so, you may have complained…


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5 Funds That Crush the S&P 500 and Pay 9.3% Dividends

Michael Foster, Senior Analyst
Updated: January 10, 2017

I’m sure you’ve heard that you can’t beat the market. It’s the prevailing wisdom—and it’s why passive index funds are more popular than ever.

But by that logic, picking stocks is pointless. And actively managed funds? You’ll find no joy there, either, because most managers underperform … and charge you outrageous fees for doing so.

That pretty much leaves us with one option: stick all our cash in a low-fee passive fund like the Vanguard Total Stock Market ETF (VTI) and call it a day, right?

Wrong.

The truth is, there are literally hundreds of funds out there that have been outperforming the market for a long time. Today, I’m going to show you five of them.

And before you ask, no, they aren’t all from one sector. …
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3 “Dogs of the Dow” Paying Up to 4.3%

Brett Owens, Chief Investment Strategist
Updated: January 10, 2017
Sad-Dog - Smaller

The “Dogs of the Dow” are back. And this year, the biggest dogs are not just generous yielders –  they’re cash cows with price upside to boot.

For the uninitiated, the Dogs of the Dow strategy is simply buying the 10 Dow Jones stocks with the highest yields, typically at the beginning of a given year. The basic premise is that, when it comes to blue-chip stocks, high relative yields are the best sign of value. They simply highlight firms at the weakest part of their business cycles.

Blue chip names are rarely cheap, which is why we only want to buy them when their businesses are in the tank. As sales and profits recover (as they almost-always do), we enjoy outsized price gains along with our dividends. …
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5 Cheap Dividend Stocks to Grow Your Retirement Portfolio

Brett Owens, Chief Investment Strategist
Updated: January 9, 2017

By now, I bet you’re sick of “Best Stocks for 2017” articles.

That makes two of us.

So today, we’re going to take the long view, starting with a strategy you can use to steadily bulk up your nest egg—even if you’re 10 years or less out from retiring—and trigger a reliable income stream once you do.

Then I’m going to reveal 5 of my favorite dividend-growth retirement stocks to buy now.

“Wait a minute,” you’re may be thinking. “Aren’t dividend payers going to get crushed as interest rates rise?”

2 Keys to Beating Rising Rates

I have two answers to that.

First, as I mentioned in a column earlier this week, this year’s rate hysteria looks a lot like last year’s, when Janet Yellen said she’d raise rates four times in 2016. …
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Buy This 8.5% Yielder Now and Hold It Forever

Michael Foster, Senior Analyst
Updated: January 6, 2017

If you want to diversify, get high-quality dividend growth and avoid risky speculation, the SPDR S&P Dividend ETF (SDY) may seem like a no-brainer.

But buying this fund would be a big mistake.

Today I’m going to show you why … and help you avoid a couple other seemingly obvious moves that could steer you into big trouble in 2017. Further on, I’ll reveal a terrific fund to buy now and tuck away for two decades or more.

First, back to SDY, which has handily beaten the S&P 500 over the past decade:

A Long-Term Outperformer

SDY-10yr-Total-Return-Chart

At the same time, more dividends have been paid out, and SDY’s payout is now larger than the broader market’s:


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5 Diversified Vanguard Funds Paying 4% or More

Brett Owens, Chief Investment Strategist
Updated: January 5, 2017

Vanguard’s offerings don’t usually attract much attention from income investors. But they should – and I’m going to analyze five of the firm’s highest yield (and low cost) offerings shortly.

Three of them are compelling portfolio conveniences, while two have lagged their competitors in disappointing un-Vanguard-like manners.

While Vanguard provides a few actively managed funds, for the most part, it sticks to basic index funds and straightforward smart-beta funds in both the equity and bond arenas. The firm doesn’t delve much into the kinds of riskier strategies that tend to result in higher yields, nor does it deal in exchange-traded notes or leveraged funds that would allow it to gin up extra income.

In fact, of Vanguard’s 70 ETFs, a mere five boast yields of more than 4% currently. …
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The Best 7%+ Dividends for 2017

Brett Owens, Chief Investment Strategist
Updated: January 4, 2017

What will 2017 hold for income investors?

Let’s sort through the current hysteria regarding interest rates, Trump and inflation. Thanks to some first-level insanity, there are once again pockets of value that pay meaningful dividends of 6%, 7% or better.

And many have some price upside to boot! Why?

Because Rate Hikes Will Probably Disappoint

This time last year, the Fed was promising four rate hikes over the next twelve months. The “smart money” crowd (via Fed Funds futures prices) was betting on two. And both parties were too aggressive as we saw just one rate hike in 2016.

Today we have Yellen & Co promising three hikes in 2017, while the futures markets say just two:

The Smart Money Bets 2 Hikes in 2017


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