The convenience of a one-click ETF is tempting, but in times like these, buying one can seriously cap your upside—and cause you to leave serious dividend cash on the table, too.

I know that’s a controversial statement, with the millions of ETF fanboys and fangals out there, so let me explain why you do not want to pile into these vehicles during a bear market like this one.

I’ll start with a very popular ETF, the Vanguard High Dividend Yield ETF (VYM). True to its name, it holds the stocks that pop into most people’s minds when they think about dividends, like Johnson & Johnson (JNJ), Procter & Gamble (PG), Verizon Communications (VZ) and Pfizer (PFE).… Read more

If you have cash to deploy in this market, you’re in luck: dividend yields on some top-name stocks are scraping historic highs. And these same stocks are often so oversold they’re primed for big upside, too.

The obvious question follows: how do you find these income-and-growth plays? Let’s dive into a two-step “screen” that does just that. It starts with the lifeblood of share prices (and dividends): corporate earnings.

Unfortunately, growing profits are getting rarer these days. Look at this chart from FactSet, showing projected earnings for the just-completed first quarter, as more S&P 500 firms report:

Earnings Drop, But Look to the Left

So far, it appears that most companies will see earnings declines in the first quarter of 2020, but when we take the market apart sector by sector, we see that there are a few sectors, like consumer staples, utilities and health care, showing rising earnings—and in the case of utilities and telecoms, significant earnings gains.… Read more

In normal times, we contrarians are stuck combing the market’s backwaters—REITs, closed-end funds (CEFs) and the like—in our hunt for outsized dividends.

But, of course, these are not normal times.

This crisis has flipped the script. Now we can get the same big payouts but with much less work. In fact, we can get them from the same stocks you’ll find in any American’s portfolio! This is a once-in-a-generation opportunity, and it can’t last.

Fishing Close to Shore

The last time I saw a situation like this was in March 2009, days before the S&P 500 bottomed in the financial crisis.… Read more

It happens in every crisis: far too many people miss out on big gains (and dividends!) because they’re too focused on the last wipeout.

You can see this tragic mistake throughout history—and many folks are in danger of making it now. I don’t want you to be one of them, so let me explain where I’m going here.

The Generals Always Fight the Last War

Let’s start with the dot-com crash of 2001. After that collapse, many people feared any kind of tech stock. But those who disavowed tech missed out on a monster return. For example, the Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100, has more than doubled up the S&P 500’s gain since.… Read more

Landlords and lenders have taken it on the chin since the world shut down. And until this place is actually open for business once again, many REIT (real estate investment trust) investors are unfortunately rolling the dice on the next rent payment coming in, the next commercial mortgage payment being made.

To be fair, however, select REITs are going to be OK, and many of them are selling at bargain prices right now. In the short run, REIT prices can move together (for example, drop when the 10-year Treasury yield rises). However, as weeks turn into months and years, we usually see a great variation in the performance of REIT stocks.… Read more

When you think about the biggest returns you could get on the market today, what do you think of? Tech? Biopharma? Gold stocks?

What about utilities?

This “boring” sector is known for high-yield stocks with little volatility. The (usual) downside to that income is lackluster capital gains, with many utilities staying range bound for years.

Except when they don’t.

Today we’re going to look at two utility funds that, over time, have crushed the S&P 500: the Cohen & Steers Infrastructure Fund (UTF) and the Reaves Utility Income Fund (UTG). Over their near 20-year histories, these funds have returned an annualized 11% per year.… Read more

Today, I’m going to show you how to find fat dividend opportunities in washed-out sectors. Let’s start with retail, where the hits just keep coming. (And the result is a few sky-high yields. Too good to be true? Let’s explore.)

You know the story by now. Amazon.com (AMZN) pioneered e-commerce, taking it from an interesting tech niche to the retail-reaper it is today. The numbers tell it all, as Statista estimates retail e-commerce sales will nearly double between 2018 and 2024.

Yes, the overall retail pie is growing, but not nearly as fast as e-commerce is. In other words, e-commerce is increasingly gnawing on brick-and-mortar’s lunch.… Read more

Far too many investors ignore dividends, especially in a bull market. It’s easy to see why: with stocks racking up yearly double-digit gains, it’s tough to get worked up about a sub-2% payout (which is what most S&P 500 names pay).

But a crisis flips the script, making safe cash dividends a lot more attractive. And luckily for us, there’s one ignored corner of the market where we can grab payouts that triple what the typical stock dribbles out.

That would be in municipal bonds, or “munis,” for short. They’re a kind of debt instrument issued by local governments throughout the US.… Read more

Is the bottom in?

Or is the market merely “sniffing glue” (as one of my friendly financial advisors aptly put it to me)?

No matter where you are currently handicapping the market, we have a proven playbook for buying big payers after a crash like the one we’ve just seen. We’ll consider the winners coming out of the 2008 crash, as well as the types of stocks that have performed well in post-pandemic China. Let’s get right into it.

Post-Crash Tip #1: Think Big

I love small companies. I lasted exactly 13 months in corporate America before fleeing to the world of small business and startups.… Read more

Right now, most investors I hear from want three things in a dividend stock:

1. Low volatility.
2. A worry-free income stream to draw on during this crisis.
3. Market-beating gains in the long run.

Sounds like a pipe dream, I know. But these three things are a lot easier to get (even these days!) than most people think. The telltale sign of a stock that delivers them is something most folks overlook: the dividend.

Specifically, I’m talking about the rate of dividend growth. In fact, I’d go so far as to say that a fast-rising payout is the No. 1 driver of share prices.… Read more