The market consistently rewards faster earnings growth in stocks, even with more income-oriented names. Higher profits can lead to higher future dividends, which in turn helps investors build wealth, even as inflation is rising.

I’ve found two companies with hefty dividends that more than doubled earnings per share in the latest quarter. However, chasing the highest growth from one quarter to the next doesn’t always pay, if those profits aren’t passed down to investors as dividends on a consistent basis.

Earnings Growth Could Stem Tide of Dividend Cuts

Ellington Financial LLC (EFC) is a specialty finance company with over $7 billion in assets that invests in everything from mortgage backed securities, to collateralized loan obligations and distressed corporate debt.… Read more

A little over two months ago, in an article for Contrarian Outlook, I spotlighted a nice short-term buying opportunity in the PIMCO Global StocksPlus & Income Fund (PGP).

PGP, with its 9.4% current dividend yield, is one of the most popular PIMCO funds, but it is one with a checkered past. And by checkered, I mean this:

Not for the Faint of Heart!

With up and down swings of 20% and more in a matter of months, PGP is a really volatile fund. And note those big dips in mid-2016 and mid-2017. There’s only one reason why huge drops like those appear for a closed-end fund (CEF) like PGP: dividend cuts.… Read more

The stock market is way up – and ironically, that’s terrible news for us dividend investors. Yields haven’t been this low in decades! The S&P 500 pays a measly 1.8% today. If you have a million-dollar portfolio, that’s a lousy $18,000 per year in income. Pathetic.

Most people invest their money in index funds like those that mimic the S&P 500. We can do better – four-times better, to be specific – and raise our dividend income by 400% simply by selling these mainstream plays and buying bigger payouts that are better values.

Specifically we’re going to discuss stocks, bonds and funds that pay 7.3% to 8% instead of the broader market’s lame 1.8%.… Read more

You’ve no doubt seen tons of articles splashed across the Web (over)hyping the hottest investing trends to jump on now. But which promising technologies can we actually tap for payouts and dividends (preferably today)?

The “mainstream” list is endless: cryptocurrencies, marijuana stocks—even gene editing (where the white coats actually alter DNA to wipe out diseases like cystic fibrosis).

I hope you’re not taking the bait, because gambling on shaky themes like these can put a huge dent in your nest egg. Check out the stomach-churning ride pot stock Aurora Cannabis (ACBFF) has been on this year:

Aurora’s Bad Trip

That nasty fall even includes a 19% gain last week after Constellation Brands (STZ) invested $5 billion in Canopy Growth (CGC), the biggest marijuana stock by market cap.… Read more

Pity the poor landlord, stuck with a boatload of hassles: late rent payments, missed payments, tenants who disappear, tenants who trash the place before they leave.

The list of risks with owning rental property goes on and on! All just to (hopefully) collect a rent check at the end of the month.

But there’s a much easier way to rake in steady income from real estate without the hassle of dealing with tenants and other risks of owning property outright.

The best part?

You’ll get an 8% return on your money in cash every single year. And we’re going to do it straight from our brokerage accounts, just as if we’re buying shares of a company like Apple (AAPL)—but without the pathetic 1.4% dividend Tim Cook’s firm pays.… Read more

How much money do you need to retire on dividends alone?

This is a better question to ask than the typical “magic number” formula that most “first-level” thinking firms tout. Let’s review why their approach is fatally flawed, so that we can derive a more reliable method of our own based in actual reality (and funded by actual dividend payments.)

Fidelity Says What?

“You should aim to have 10 times your final salary in savings.”

Buy why? I suppose they are claiming that, if you earned $100,000 in your final year working, that you’ll want to earn this much in income every year for the rest of your life.… Read more

Individual investors tend to gravitate toward stocks trading under $10 for multiple reasons. For one, it can psychologically feel more powerful to buy 100 shares of a company trading for $8 than just eight shares of a $100 name.

While both investments are just as likely to generate attractive returns over time, low-dollar stocks have historically proven to be more volatile. In other words, they can offer active traders more bang for their buck in the short term.

Volatility works both ways, which is why I’ve highlighted two stocks that appear to be trading under $10 for a reason and might not be able to sustain their current dividends.… Read more

If you noticed American stocks selling off last week and you’re confused as to why, it’s because of an obscure corner of financial markets that might become one of the biggest stories of 2018: the Turkish lira.

Turkey’s Money Implodes

Where a dollar would get you less than four lira at the start of the year, it now gets you more than six lira—in other words, Turkey’s currency has lost nearly half of its value in 2018 alone!

This is something some investors need to fear a lot. And today I’m going to show you how to avoid being on the losing end of this crisis (including 11 funds you need to sell or avoid now, before they get crushed).… Read more

Moe Ansari, host of the popular Market Wrap radio show and podcast, asked me on air:

“Brett, how do you find dividend paying stocks that will double your money?”

He was intrigued enough by my analysis to ask me on his show, but I knew he was a bit skeptical as well. And that’s perfectly normal – even experienced investors and money managers like Moe think of dividend payers in terms of their current yields only.

Price appreciation potential often gets ignored, and the thought of achieving 100%+ profits from a safe dividend payer sounds absurd. But smart investors bank their payouts while their stocks double in price.… Read more

First-level investors are at it again, crowing that now is a great time to give the vaunted Dividend Aristocrats another look.

(You’ve probably heard of these darlings of the income world: they’re the 53 stocks that have hiked their dividends for 25 straight years or more.)

Desperate for a Deal

So why is now supposedly a great time to buy these payout poster boys?

Because according to a recent Barron’s article, the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), the passive fund that holds all 53 of these stocks, is trading at 18.1 times forecast earnings for this fiscal year. That’s below the average of 18.8 over the last three years.… Read more