2 Insurance Stocks Raising Healthy Dividends

Brett Owens, Chief Investment Strategist
Updated: December 14, 2015

Who gains the most from the Federal Reserve’s (almost certain) rate hike this week?

Banks are one lucky group: if interest rates keep rising next year—as I expect they will—they’ll reap a windfall on loan interest. (Last week, we looked at my three favorite banks to buy now.)

But there’s another group poised to gain as rates arc higher next year, and hardly anyone has mentioned them. I’m talking about insurance companies.

A Screaming Bargain

There’s a direct link between rising rates and insurers’ profits.

Insurance companies are constantly investing the premiums they collect in, among other things, government and corporate bonds, and yields on those bonds rise with the federal funds rate.… Read more

A Stock With A 6% Dividend AND 50% Upside

Brett Owens, Chief Investment Strategist
Updated: December 15, 2015

Last week, we learned that casino mogul Steve Wynn increased his stake in Wynn Resorts (WYNN) almost 10% by purchasing 1 million additional shares from Dec. 4th to 8th.

The move sent his stock up over 13% on the day. It also boosted Las Vegas Sands (LVS), MGM Resorts (MGM), and Melco Crown Entertainment (MPEL).

His purchase might be an indication that the industry isn’t as busted as many have thought.

The Casino industry has had a tough year. The industry’s golden goose –Asian gambling Mecca Macau – was seriously hurt by Chinese travel and currency restrictions from June 2014. From a peak of $45.1… Read more

3 Stocks Buffett Wishes He Could Buy

Brett Owens, Chief Investment Strategist
Updated: December 9, 2015

On Monday, we reviewed Warren Buffett’s favorite bank stocks. No surprise, they’re all large caps – Uncle Warren has to invest a lot of money for any returns to matter, after all.

His “problem” of having too much cash to deploy is not one that keeps me up at night. But Buffett did once famously say that he’d earn 50% per year investing in smaller companies if he were only managing a few million bucks. So let’s talk about the banks he’d love to buy if he could.

Most sub-behemoth banks have relatively straightforward business models – focused on banking, of all things.… Read more

3 Stocks to Buy Before Fed Raises Rates

Brett Owens, Chief Investment Strategist
Updated: December 7, 2015

You can take it to the bank: the zero-interest rate era will soon be dead.

That’s bad news if you have a hefty credit card balance, but it’s terrific if you invest in bank stocks. And now is a great time to do so.

That’s not just my opinion. Some of the country’s smartest investors—including Warren Buffett himself (see below)—share it. They’ve bulked up their bank holdings lately, and it doesn’t take a stock-market genius to connect that to a rate hike the market sees as 78% certain at the Federal Reserve’s December 16 meeting.

Let’s be honest, a one-off, quarter-point increase won’t mean much for bank profits.… Read more

Book 60% Gains in 2016 With These Black Friday Winners

Brett Owens, Chief Investment Strategist
Updated: December 4, 2015

It’s been a rollercoaster start to the holiday shopping season. What started as a muted Black Friday transitioned into one of the best Cyber Monday’s of all time as consumers eschewed early morning in-person purchases for mobile shopping.

Looking at results from the combined weekend, the National Retail Federation expects U.S. Holiday shopping to increase by 3.7%. Underperforming retailers like Sears and Kmart from Sears Holding Corp (SHLD) are going to have a tough time explaining poor results when competitors booked huge returns.

On Cyber Monday Target Corporation (TGT) had their website crash with the surge in online traffic – ahem, I mean they “metered traffic” as their spokespeople said.… Read more

Yellen To Crush Fixed Rate Bonds In 2 Weeks

Brett Owens, Chief Investment Strategist
Updated: December 2, 2015

Worried that rising rates are going to hurt some of the bonds you own? If so, you’d better move some of your fixed-rate bond money into “floating-rate” issues.

As I write to you on this first Wednesday of December, traders are handicapping a 78% probability that the Fed will boost rates in two weeks. Overall they’re projecting a half-percent increase between now and June. And renowned government insider Goldman Sachs is a bit more aggressive – it’s projecting a full percentage point of tightening.

A 0.5% – 1% move would be plenty big to pancake many bonds.

The Fed last began a new rate-raising cycle at the end of June 2004 (yes, it’s been over 11 years).… Read more

2 Dividend Stocks With 20% Upside in 2016

Brett Owens, Chief Investment Strategist
Updated: November 30, 2015

If you’re looking to make double-digit gains on your portfolio in 2016, don’t take your cues from the usual forecasters. They won’t actually tell you where to put your money anyway (as they supposedly save this inside information for their top clients).

Investment bank UBS is calling for a 1.5% gain in the S&P 500. Goldman Sachs Group (GS) sees a measly 1% rise.

But there’s always a bull market in some issues, and numerous studies have shown where to profit from them. Buy companies that pay—and preferably raise—their dividends. Even better if they also buy back their own shares.… Read more

Sell Your Mortgage REITs Now!

Brett Owens, Chief Investment Strategist
Updated: November 27, 2015

Don’t believe every contrarian you read on the internet – not all REITs have interest rate risks sufficiently priced in.

Two weeks back, I highlighted the good performance that REITs turned in during the last rising rate period from June 2004 to June 2006. The Vanguard REIT Index ETF (VNQ) hardly suffered as rates rose from 1% to 5.25%, returning 33% over the 24-month period.

Some REITs didn’t do as well, however. Mortgage REIT favorite Annaly Capital (NLY) posted a total return (dividends included) of -13.4%. If you own similar issues like Redwood Trust (RWT), Capstead Mortgage (CMO), or MFA Financial (MFA) then please pay attention.… Read more

$1.4-Trillion Of Corporate Cash From 1 ETF

Brett Owens, Chief Investment Strategist
Updated: November 23, 2015

Companies that put cash in their investors’ pockets beat the market consistently over time. And there’s one specific “payout loophole” that can be particularly profitable when done properly.

Today, firms have lots of cash to share. As of the end of the second quarter, corporate America was sitting on $1.43 trillion, up 5.5% from a year earlier.

That’s despite the fact that management is doing its best to shovel greenbacks out the door and back to investors. According to Goldman Sachs Group (GS), total spending on dividends and share buybacks will leap 7% in 2016, to just over $1 trillion.

Many first-level investors complain that CEOs should be reinvesting in their companies instead, but they’re doing fine on that front, too: Goldman sees R&D spending rising 5% next year, while capex will gain 6% (excluding the beaten-down energy sector).… Read more

3 Dividend Growers At The Top Of My Watch List

Brett Owens, Chief Investment Strategist
Updated: November 20, 2015

The holiday season won’t be so cheery according to Wall Street. Concerns over dismal holiday retail sales have taken the lift out of October’s rally and weighed on the S&P 500.

Wal-Mart (WMT), Amazon.com (AMZN) and Target (TGT) are under the microscope heading into this upcoming Black Friday. But weekly price gyrations don’t matter as much as earnings and dividend growth. We should use short-term concerns about the sector as potential buying opportunities – especially for perennial dividend growers.

So what can we expect from retailers this holiday season?

According to the October U.S. Retail Spending survey – which increased just 0.1… Read more