With the market at nosebleed valuations, where can we look for value and yield?

Let’s turn to our favorite three-letter acronym. C-E-Fs.

As usual we have a handful of closed-end funds (CEFs) getting no love from Wall Street. This is perfect for us as we’re talking about dividends up to 14% and discounts between 10% and 15%.

In other words, these fat payers are trading for 85 to 90 cents on the dollar. Let’s discuss.

Gabelli Dividend & Income Trust (GDV)
Distribution Rate: 5.8%
Discount to NAV: 15.0%

We begin with Gabelli Dividend & Income Trust (GDV), a top-rate closed-end fund whose management team includes legendary value investor Mario Gabelli.… Read more

Closed-end funds (CEFs)—our favorite 8%+ yielding investments—have a new (and popular!) fan. And he’s making a big move I see sending CEF prices higher.

Bill Ackman Discovers What We’ve Known for Years

I’m talking about Bill Ackman, one of the best-known activist investors out there. You’ve probably seen the head of Pershing Square Capital Management, a hedge fund with $18.3 billion in assets, in the media. He’s a regular commentator.

Ackman has scored some big wins in his career, such as his 2005 investment in The Wendy’s Co. (WEN). But he’s probably better known for his dramatic misses, like his losing bid to change the board of directors at Target Corp.… Read more

I have a pop payout quiz for you, my contrarian friend. Can you tell me how much dividend income you earned last week?

And if so, can you tell me how much you earned each day?

These details are now available in Income Calendar, the dividend tracking tool that we created in-house here at Contrarian Outlook. IC’s ability to project divvies down to the day tells us that:

• We collected $1,844.75 last Monday.
• Another $264.80 in divvies followed on Wednesday.
• And our holiday week was capped off with $340.55 in income on Friday.

The tool took my newsletter portfolio as input—with tickers and sample share counts—and did the rest of the work.… Read more

Railroad stocks are set to roll and we’re going to climb aboard with two stocks—including one that’s hiked payouts by 50% in five years—we’ll delve into in a sec.

What’s driving this opportunity? Our usual contrarian mix of overlooked growth and stocks that have been tossed overboard, of course!

Since the days of the Wild West, railroads have been the backbone of the US economy, so when economic growth gets out of sync with railroad stocks’ prices—as is happening right now—we need to take notice.

As I write this, the US economy is still in growth mode and shoppers are still spending.… Read more

Hedge funds have a big problem: They can’t beat the market anymore.

If you read the press, you’ll see a lot of concern over this. If hedge funds aren’t cutting staff, they’re struggling to find talent to try to boost their returns. Moreover, the industry mostly keeps shuffling people within its ranks, undercutting the stability needed to make outperformance last.

So it’s kind of strange that hedge funds are managing more money than ever. The industry was managing $1 trillion in the mid-2000s, a milestone at the time. But now hedge funds are managing more than $4 trillion globally. And they’re still growing.… Read more

Five growth companies are about to hike their dividends. Let’s front run these payout moves.

Many vanilla income investors miss these stocks because their current yields are modest. These armchair analysts are missing a critical point. These stock prices climb with each and every hike thanks to a phenomenon known as the “dividend magnet.”

Consider tech giant Microsoft (MSFT). Sure, Microsoft’s 18-year-old payout isn’t exactly old compared to fellow Dow components like Coca-Cola (KO) and Procter & Gamble (PG), which have been writing dividend checks since the 1800s, but it’s awfully long in the tooth for a member of the technology sector.… Read more

I spend a lot of time parsing the latest economic data before recommending funds in our monthly CEF Insider service. And while the business press almost always leads with fear when it comes to the economy, the real numbers tell us something else entirely.

Case in point: The three little-discussed economic stats we’re going to dissect today. Taken together, they tell us that now is a great time to buy stocks.

But to make the most of the shifts they foretell in the economy, 8%+ yielding closed-end funds (CEFs) are a far better pickup.

Here are the three factors I’m talking about (in order of importance):

1. American incomes are still growing.

My six-year-old hooper was having an outstanding YMCA practice. She was leading the drills, encouraging her teammates and almost dribbling between her legs. So close.

And then, the very next minute, she was throwing a fit in the corner. Her tantrum would last the remainder of practice. She missed the end of the time-honored “kids versus coaches” game which the kids (as always) dominated.

One of the coaches (her father, and your income strategist) was not thrilled with her pouting but also not totally surprised. Parenting a soon-to-be-first grader is a rollercoaster. Best to enjoy the good moments and get through (or mentally block out!)… Read more

If you’ve been reading my columns for a while, you’re probably sick of hearing about the “Dividend Magnet.” (I’m starting to think I should put it on my license plate. Too bad the California DMV has a seven-character limit!)

Well, we got another quick Dividend Magnet win last week, when my latest pick for our Hidden Yields service, FedEx Corp. (FDX), shot up 17% five days (including a weekend) after our buy call.

An Immediate Dividend Magnet Win

To be honest, we Hidden Yield-ers are used to seeing gains on stocks that grow their dividends fast, like FDX, which hiked its payout 112% in the last five years.… Read more

There are three very clear signs the stock-market bull will keep stampeding. Let’s dive into them, then talk about two discounted funds set to ride those gains (and pay us rich dividends up to 11.4% in the process).

Bullish Signal #1: The US Worker is Strong

There’s a lot of pessimism about the US economy out there, even though it’s doing well. We’ve discussed why this is before—it’s ultimately due to the media getting more pessimistic—but this chart proves the point.

Since the Federal Reserve started tracking workers’ average weekly earnings in 2006, they’ve risen at a steady rate of about 2.6% annualized from then to 2020.… Read more