Articles

4 Cheap Dividend Growers With 20% Upside in 2017

Brett Owens, Chief Investment Strategist
Updated: December 26, 2016

Looking for cheap stocks throwing off double-digit dividend hikes in 2017?

Bad news: it’s getting tougher to dig up these hallowed companies—and easier to fall victim to a dividend cut.

Consider the S&P 500, the be-all-and-end-all for most people when it comes to stock picking.

According to FactSet, 44 of the index’s constituents had payout ratios (or the percentage of earnings headed out the door as dividends) that were above 100% in Q3. That’s nearly 9% of the index, the second-highest total in a decade.

Not good.

Payout-Ratios-Too-High

Meantime, the S&P 500’s average payout ratio hit 40.2% during the quarter, the highest level in seven years.…
Read more

2 Beaten-Down Funds to Buy for 9.4% Dividends – and 3 to Avoid

Michael Foster, Investment Strategist
Updated: December 23, 2016

2016 has been a crazy year—so it’s no surprise closed-end funds (CEFs) have been offering crazy returns.

As we’ll see in a moment, the best fund is up over 50%, which crushes just about every unleveraged ETF and mutual fund out there. Plus, that fund pays a whopping 7.6% yield—which is pretty typical for CEFs. If you bought in when it was at its 52-week low, you would have been getting an unbelievable 14.7% yield throughout 2016, while also seeing your portfolio’s market value go up and up.

This is the power of getting into the right CEF at the right time, and it shouldn’t be ignored.…
Read more

3 Stocks With Big “Moats” Paying 5%

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

It’s actually easy to find dividend stocks that yield more than 5%. No, really. You can go to a screener like the one at FinViz.com and actually search for dividend stocks that yield more than 5%. As of right now, about 450 stocks hit that bar.

But that’s merely a list – a list that more closely resembles a minefield.

Buried in that list of high-yield dividend stocks is a horde of time bombs. These are stocks that threaten your hard-earned nest egg in any number of ways.

Some of these big yields are simply a result of big stock losses, which in turn are a reflection of deteriorating financials that could lead to payout cuts or suspensions in the future.…
Read more

8 Rules for 8% Income Investing in CEFs

Brett Owens, Chief Investment Strategist
Updated: December 21, 2016

The 10-year’s yield up to 2.6%? Big deal – you and I still aren’t retiring off it!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $26,000 on a million bucks in capital, or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Unfortunately this rising rate environment has income seekers scared of CEFs. Many of our Contrarian Income Report subscribers are writing in to ask if they should bail on our high paying vehicles.…
Read more

How to Buy Buffett’s Best Stocks at a 19% Discount

Michael Foster, Investment Strategist
Updated: December 20, 2016

Warren Buffett’s done it again.

Don’t look now, but year-to-date, Berkshire Hathaway (BRK.A, BRK.B) stock is up 25% and is actually outperforming the incredible 20% a year, on average, it’s returned since 1964.

A Chart Any Investor Would Love

How-to-Buy-Buffetts-Best-Stocks

In a moment, I’ll show you an overlooked investment that lets you duplicate the moves of the world’s smartest investor—and you won’t have to buy a single share of Berkshire Hathaway to do it.

In fact, you’ll be able to pick up Berkshire and the companies it invests in for 19% less than you’d pay on the open market!

A Banking Boost

Berkshire’s year-to-date gain has come, in part, thanks to the financial industry’s recovery post-election.…
Read more

4 Stocks Insiders Are Loading Up On – and You Should Too

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

If you’re cutting back on stocks because interest rates are rising, you’re making a mistake.

But don’t just take my word for it (after all, I am a dyed-in-the-wool dividend-stock fan). Ask Ned Davis Research, which released its latest research on the relationship between stocks and rates about a year ago.

The finding? When the Fed moved slowly on rate hikes, stocks dropped immediately after each announcement … but went on to gain 10.8%, on average, in the next 12 months.

And as I’ve mentioned before, when Ned Davis’s researchers took a longer view—from January 1972 through December 2014, a period that saw far faster rate hikes than we’ll likely see this time around—they found that dividend growers outshine any other kind of stock, and not by a little.…
Read more

How to Buy the Best Dividend Stocks at a 16% Discount

Michael Foster, Investment Strategist
Updated: December 16, 2016

Few people know it, but you don’t have to buy a stock for the price you see on Yahoo Finance.

The truth is, you can buy some of the best large cap dividend payers for cheaper: and I don’t mean a little cheaper. I’m talking a 16% discount.

How?

Through a closed-end fund (CEF) that’s trading at a ridiculously high discount to its net asset value (NAV). That’s despite a strong track record, low expenses and an attractive 4.4% dividend yield.

Let’s break each of those things down one at a time, starting with the name of this unheralded investment.

It’s called Tri-Continental Corporation (TY), and it holds some of America’s safest and highest-quality stocks.…
Read more

A Diversified 3-Click Portfolio That Pays 11.1%

Brett Owens, Chief Investment Strategist
Updated: December 15, 2016

Why is it so difficult to find good yield these days?

For the past half-decade or so, income ETFs and exchange-traded notes (ETNs) have exploded, to the point where ETFdb.com now lists some 130-plus dividend-focused equity products, 300-plus bond products and a host of other income plays on preferred stocks, alternative assets and more.

But ETFs that offer substantial yield? Well, that can get tricky. Less than a quarter of ETFs dedicated to dividend stocks yield more than 6%, and just a handful of bond funds do. In fact, of the roughly 2,000 ETFs that ETFdb.com tracks, just 75 yield more than 6% … and many of those are extremely risky leveraged products more suited to quick traders than investors who want to just sit back and collect a decent paycheck

Still, yield hunters have a few options to choose from.…
Read more

A “Trump Windfall” Will Lift These Dividends 100%

Brett Owens, Chief Investment Strategist
Updated: December 14, 2016

The investment mantra “Don’t fight the Fed” may soon be replaced by a timelier one.

Don’t fight Trump Tower!

The S&P 500 has returned 4.3% in the month since the election. But certain sectors (such as banks and energy) have climbed even higher, faster. While others (such as REITs) initially languished.

Some of these moves are due to correct. But we also have a set of spectacular dividend growers selling for their cheapest prices this decade. Let’s sort through these Trump trades to find the remaining pockets of value for yield and price upside.

Banks: Below Book No Longer

As recently as spring, some of the best banks on the planet were selling for less than their book value.…
Read more

A “No-Brainer” Buy for a 6.9% Yield and Double-Digit Upside

Michael Foster, Investment Strategist
Updated: December 13, 2016

It’s as close to a sure thing as you can get: interest rates are headed higher.

The futures market tells the tale. Right now, it pegs the odds of a hike at the Federal Reserve’s December 14 meeting at near 100%:

Everyone Agrees: Rates to Rise

An-Ignored-Investment-With-a-6-9-Yield

What’s more, futures markets expect interest rates to go up again in 2017. So if you invest in bonds in a market like this, you need to consider how you can protect yourself from higher rates.

I’ll show you a one-buy option that will do just that—and hand you a nice 6.9% yield in the process—in just a moment.…
Read more