How I Plan to Grow My Money 2X (with 50% more dividends)

Brett Owens, Chief Investment Strategist
Updated: October 22, 2019

I know you’ve got cash lying around you’d love to double. Heck, even the most buttoned-down investor wouldn’t turn down a quick 2X gain.

So let’s go ahead and double your stake—and do it safely, too.

Before you ask, no, this isn’t some wild pot-stock speculation: my 2X money plan only works on companies paying—and growing—their dividends. Like the stock I’ll show you shortly, which ballooned its payout 50% in less than three years.

The 2X growth plan we’ll dive into shortly hinges on three strategies I rarely reveal in public (but they won’t come as a surprise to my Contrarian Income Report and Hidden Yields members).

Let’s get started with the first part of our plan: it involves short-selling stocks, but not the way you think. We’re going to “play” short-selling gamblers for low-risk upside and fast payout growth.

Step 1: Follow This Ignored Indicator 

The key to the first part of our strategy is short interest—or the percentage of a stock’s float that have been sold short and not yet “covered”—in other words “borrowed” by traders betting against a rise in its price.

Short interest is one of my favorite ways to “time” stock buys.

Before we go further, let’s back up and talk a bit about short selling. It involves selling a stock you’ve borrowed, with a commitment to buy it back later, hopefully at a lower price. Your profit lies in the difference between the selling price and the price at which you have to buy the shares back.

It’s a dangerous move because it can expose you to unlimited losses (as there’s no limit on how high a stock can rise, while your “regular” buys can only go to zero).

But don’t worry—we’re not going to “short” stocks ourselves. We’re going to cash in on short sellers’ greed!

Here’s how: if a stock attracts a lot of short interest and the price rises, the “shorts” scramble to buy and cover their positions. That can create a feedback loop, where the rising price triggers short covering, driving up the price, triggering more short covering, and so on.

These “squeezes” can be legendary, like the one that sent Volkswagen soaring 82% in a single day in 2008.

Here’s where we make our move.

A good rule is that short sellers tend to be the most wrong at the extremes, so we’ll look for short interest that’s much higher than usual, then take a “long” position—that is, we’ll simply buy the stock in question.

Step 2: Add a Dividend “Afterburner” 

That’s not all, though: we’ll give ourselves more upside by purchasing stocks with high short interest and fast dividend growth. That’s because, as I wrote on September 17, a rising dividend is a “magnet” on a company’s share price, pulling it higher as it grows.

NexStar Media Group (NXST), a stock I’ve recommended in my Hidden Yields dividend-growth advisory, demonstrates this one-two punch. It’s great
“bait” for our short sellers because it’s one of the biggest local-TV operators in America … and most folks think local TV is dead!

But, as I wrote on September 10, investors have ignored rising revenue from NexStar’s 114 local websites and 202 local apps, plus the cash it gets from rebroadcasting—what other broadcasters pay for the local content NexStar creates.

More on NexStar’s payout hikes shortly. First, back to our short-selling pessimists:

Short Interest Rises, NexStar Stalls

As you can see above, from January 2016 until mid November of that year, short interest in NexStar spiked to an all-time high, boxing in the stock’s price. But if you’d bought on November 15 of that year, when short interest peaked, you’d have skipped that lag—and bagged an outsized 60% price gain in just under three years!

Shorts Check Out, NexStar Takes Off

And that’s just price gains! Never mind that NexStar boosted its dividend 50% since then. Add in the surging payout and your return jumps to 69%.

As I mentioned earlier, that stunning dividend growth provided another advantage, combining with collapsing short interest to propel the shares higher with each passing hike:

NexStar’s Dividend Magnet Switches On

The pattern is unmistakable!

So the next time you see a stock with high short interest and a soaring dividend, you know it’s time to buy. (Or you can let me do the legwork for you—I’ll show you how in a second.)

Now let’s move on to …

Step 3: Check in When Wall Street Checks Out

You can catch another big windfall by paying close attention to analyst ratings—but not the way most people think.

Remember, everyone loves to follow the herd, and analysts are often the lead lemmings. That’s why, when most folks research a stock, they look for those with a lot of buy ratings from Wall Street—if they look at these ratings at all.

But they’ve got it backwards! Because if every analyst already has a buy rating on a company, there’s no hope of upgrades, which can send shares stair-stepping higher.

That’s what happened with Crown Castle International (CCI), a dominant real estate investment trust (REIT) with 40,000 cell towers and 75,000 route miles of fiber-optic cable across the US.

Crown yields 3.3% today, and the dividend has jumped 37% in the last five years. As you can see below, the REIT’s shares soared 26% from March 2015 until late August 2017, as the number of analysts recommending it nearly doubled, from six to 11.

Bullish Analysts Drive a Double-Digit Gain

Fast-forward to today, and the number of Wall Street hotshots with a “buy” on Crown has dropped to seven. That’s ridiculous when you consider that:

  • Crown pays out a low (for a REIT) 82% of funds from operations (FFO—the REIT equivalent of earnings per share) as dividends, giving it plenty of power to “charge” its dividend “magnet.”
  • Adjusted FFO is soaring, up 12% in the third quarter. Site-rental revenue—or the cash telecoms are forking over to rent Crown’s towers—jumped 6% year-over-year.
  • The Federal Reserve is cutting rates, a big plus for the entire REIT sector.
  • The company’s cell towers and fiber-optic lines are (and will continue to be) in high demand as telecom carriers move 5G networks.

Add in the coming rush of buy recommendations (inevitable, in my opinion), and the stock is set to gap higher—and soon.

These 7 Stocks Will DOUBLE Your Money in 5 Years (or less!)

This is the perfect time to mention my 7 very best dividend-growth picks for your portfolio. They’ve all been unfairly snubbed by Wall Street (and pretty well everyone else!).

That’s great news for us, because these 7 buys are set to hand out life-changing gains as their payouts surge and their powerful “dividend magnets” quickly change investors’ minds—driving up these companies’ share prices, too!

I can’t wait to tell you about these 7 off-the-radar buys, whose payouts are growing so fast that I fully expect them double an investment made today by 2024—and likely a lot sooner.  

And because these gains will be driven by these 7 stocks’ surging payouts, you can expect a huge slice of that win to come your way in cash!

Imagine turning a retirement “pot” of $250,000 into $500,000, or $500,000 into $1 million. That’s the kind of return I’m talking about here.

These 7 dividend wonders are ridiculously cheap now—and they’re growing payouts at an accelerating pace.

Don’t miss your chance to buy these 7 “hidden” dividend plays before their dividends (and share prices) gap higher. Click here and I’ll give you everything I have on each one: names, tickers, buy-under prices and the double-digit dividend (and share-price) growth you can expect.