Articles

7 Big Dividends Insiders Are Buying

Brett Owens, Chief Investment Strategist
Updated: March 30, 2016

Legendary investor Peter Lynch was fond of saying that corporate insiders may sell their company’s shares for a variety of reasons. But there’s only one reason they buy – and that’s because they think the price is going up.

Anyone at the director-level or above in Corporate America is considered an “insider” – and it’s perfectly legal for them to buy their own company’s stock. That’s a good sign in general, and especially for the stocks that we’re interested in. It means the executive buyer is bullish on dividend growth, and as we’ve discussed before, payout growth is what ultimately sends stock prices higher.…
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The 2 Best Dividend Stocks For Your Retirement Portfolio

Brett Owens, Chief Investment Strategist
Updated: March 28, 2016

Investors, spooked by the massacre of 2008 and the market’s latest gyrations, are making the same mistake again. They’re running scared into so-called “safe” fixed-income investments like CDs and treasuries—and ignoring stocks altogether.

A recent survey by Franklin Templeton found that 37% of long-term investors thought they’d be just fine leaving stocks out of their retirement portfolios. For investors in their 20s and 30s, that number jumps to 56%.

That’s a big mistake—unless these folks are incredibly wealthy, they’re not going to be able to enjoy retirement in financial comfort. If your nest egg doesn’t have a big allocation to equities, read on and I’ll break down the best dividend stocks for you to consider today.…
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Beat Wall Street With These 6 Dividend Payers

Brett Owens, Chief Investment Strategist
Updated: March 25, 2016

As we approach tax time, many investors open their brokerages statements for the first time in a year. Those that “outsourced” their investing decisions to fund managers are often disappointed. On the whole, these vehicles tend to underperform the broader market.

Of course there are exceptions. For example, the Vanguard High Dividend Yield ETF (VYM) has outperformed the S&P 500 over the past five years (83.4% cumulatively versus 81.6%). It pays a 3.4% yield today, which is certainly better than the S&P’s paltry 2.1% payout.

But VYM can leave you holding an unexpected tax bill this time of year. Even if you didn’t sell your shares of the fund in 2015, its realized gains can be passed onto you.…
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A New Dividend ETF With 585% Upside

Brett Owens, Chief Investment Strategist
Updated: March 23, 2016

A few months back, I ranked my five favorite dividend ETFs – and shared my top pick to buy and hold forever. Since then, three new ETFs have launched that address the main problem I had with the strategies I reviewed the first time around.

The result? A 585% return over a 15-year period!

I’ll share the specifics and tickers – and my discussion with their portfolio manager – in a minute. But first, let me give you some background on dividend ETFs so you’ll appreciate why these new strategies are superior.

Sadly, Most Dividend ETFs are Dogs

Dividend-focused strategies should outperform the market over the long haul.…
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3 Vice Stocks With High Dividends And 20% Upside

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

Vice pays if you’re an investor. You’ll earn higher yields and returns investing in booze, tobacco, firearms, and gambling than you will in feel-good stories like clean energy.

“First-level” investors tend to avoid these types of stocks. As a result, they’re often cheap.

For example, you may think smoking is a fading habit. But even today, one in six Americans still smoke. Despite the warning labels, the public campaigns, and a concerted effort to ban smoking in most public places, some folks still just want a cigarette.

And since smokers are going to keep smoking, we should consider the perennial dividend growers who profit from the sustainability of cigarettes.…
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These 3 Dividends Could Grow Forever

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

Billionaire investor George Soros said it best: “Good investing is boring.”

Two great examples: dividend reinvestment plans (DRIPs)—an automatic way of building wealth that most investors ignore—and the S&P 500 Dividend Aristocrats.

Let’s take the second one first. Many of the 50 companies on the Dividend Aristocrats list peddle everyday staples like tape, telephone service and over-the-counter drugs—products that are about as humdrum as you’ll find.

These are household names like Colgate-Palmolive (CL), Kimberley-Clark (KMB), and Clorox (CLX). (I’ll give you the names of my three favorite Dividend Aristocrats in a minute.)

But these companies have a big edge over the flashy wearable tech and biotech stocks investors usually go gaga for: they pay steady dividends.…
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The 3 Best Dividend-Paying Telecom Stocks To Buy Now

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

Looking for high, safe income? If you’re like many investors, you probably look to electric utilities first.

But I think telecom stocks are a better bet right now. I’ll give you my top three in a minute. First, let me explain why.

The allure of utilities is obvious: you have to buy power whether the economy is soaring or tanking. Utilities also give you “China insurance,” because they’re almost entirely focused on the US.

But here’s the problem: after last year’s panic over rising interest rates sent utilities plunging, they’re back in vogue. Since January 1, the Utilities Select Sector SPDR Fund (XLU) has jumped 11.2%, while the S&P 500 is down 1.1%.…
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6 Cheap Dividend Growth Stocks

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

Growth at a reasonable price, or GARP, is an investing strategy that blends value and growth investing. Instead of just buying a stock that’s cheap, or one that’s growing earnings fast, we look for stocks that appear decently priced with respect to year-over-year growth.

For example, a company growing 15% annually with a price-to-earnings (P/E) ratio of 15 or less would be considered cheap by GARP standards. Since the “E” is growing at 15% per year, the P/E next year will either decline towards 13, or the stock price will rise in tandem with earnings.

It sounds like a foolproof investing formula.…
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5 Big Dividend Investing Mistakes (and How to Avoid Them)

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

Dividend stocks are a great way to build long-term wealth. But how do you pick the right ones—and steer clear of companies whose payouts are headed off a cliff?

You can start by avoiding the five classic blunders below. If you’ve made any of them, don’t worry. We all have. But keeping them in mind will help you stay off the rocks and boost your future returns.

  1. Focusing on High Yields—and Nothing Else

For many investors, buying dividend stocks is a simple matter of seeking out a high yield—above 6%, say—and hitting the buy button.

That’s the worst thing you can do, because many stocks paying out at those levels are nothing more than “yield traps”: their profits and cash flow simply can’t back up their hefty payouts.…
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4 High Yield REITs Paying Up To 11%

Brett Owens, Chief Investment Strategist
Updated: March 11, 2016

The S&P 500 may yield just 2.2% today – but if you smartly invest in stocks that specialize in profitable niches, you can collect 6-11% yields right now. With double-digit price upside to boot!

Real Estate Investment Trusts (REITs) are some of my favorite vehicles for specialization and yield. REITs must have 75% of their assets in actual real estate and earn 75% of their income from those assets. These dividend machines are legally required to pass along at least 90% of their earnings to shareholders.

This is actually the best time to buy REITs this decade. The Vanguard REIT Index ETF (VNQ) pays 3.9% today – just about its highest since 2009.…
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