1 Big Dividend To Buy And 5 To Sell Now

Brett Owens, Chief Investment Strategist
Updated: February 12, 2016

Business development companies (or BDCs) have been hit hard over the past few quarters. Those with large energy investments have seen their stock prices plunge along with oil.

But this is a love-hate story for investors. Even as these stocks have grown more speculative, these issues have garnered even more attention for their fat dividends. Many BDCs now have yields north of 10%.

Unfortunately, first-level investors tend to flock to the riskiest BDCs, because they have the highest stated yields.

Like many contrarians, I’m an income investor who’s always on the lookout for a good value stock. I love buying stocks of unloved companies at a bargain.… Read more

3 Big Dividends To Buy Before The Market Rally

Brett Owens, Chief Investment Strategist
Updated: February 10, 2016

Stocks are about to rally – just ask the rare bettor who took the Broncos on Sunday.

While Sunday’s Super Bowl was a one-sided affair, the betting that preceded kickoff set records in sports books. More than 80% of the money and bets helped push the Carolina Panthers from 3.5-point to 6-point favorites. It’s the public’s favorite game to bet on, and they piled cash on the team that they just saw cruise to two blowout wins in a row.

Closer to kickoff, the “smart money” came in on Denver. The professionals waited through the initial wagering, and then bought value where they saw it.… Read more

The Best “Pick and Shovel” Play for the E-Commerce Boom

Brett Owens, Chief Investment Strategist
Updated: February 8, 2016

If you think you’re too late to profit from e-commerce bonanza, think again.

Because even though the first web-based purchase was made more than 20 years ago, online shopping is still growing at a breathtaking pace, with a 15% expansion in 2015 alone.

But despite that fast growth, web-based purchases only made up 7.4% of total US retail sales in the third quarter, according to the Census Bureau, so the trend has plenty of room to run yet.

Of Picks, Shovels and Clicks

When most people think of e-commerce, the first name that leaps to mind is Amazon.com (AMZN). There’s good reason for that: according to Macquarie Research, the retail giant accounted for more than half of all e-commerce growth last year.… Read more

The Best, and Worst, Dividends in Big Oil

Brett Owens, Chief Investment Strategist
Updated: February 5, 2016

At first glance this looks like a terrible time to buy energy stocks. Oil prices are at historic lows, demand has pulled back, inventories are climbing, and global manipulators like OPEC and Iran are doing little to help.

But contrarian investing is successful because we invest against the herd and simple “first-level” notions. I warned you to stay away from big oil when the goo was trading 50% higher, and I hope you listened. But oil prices will eventually find a bottom – and it’s almost time to get our big oil shopping list ready.

The S&P 500 pays just 2.3%, but the firms I’m talking about pay from 3.9% all the way up to 8.7%.… Read more

5 REITs To Buy Now And Hold Forever

Brett Owens, Chief Investment Strategist
Updated: March 24, 2016

Now that everyone’s a bit fearful, it’s time for us contrarians to get greedy for yield.

Recently, we discussed three great dividend stocks to buy now and hold forever. These top-notch businesses are going to grow their earnings steadily in the years and decades ahead. And they’re selling at discount prices for the moment, thanks to China’s roulette wheel of a market (which has zero bearing on these companies long-term).

My only problem with these firms? Even at bargain prices, the highest payers only dish 3.1% annually.

Real Estate Investment Trusts (REITs) provide an answer to the yield dilemma. By definition, they send most of their earnings back to investors in the form of dividends.… Read more

2 High Yield Stocks to Buy and 2 to Dump Immediately

Brett Owens, Chief Investment Strategist
Updated: February 1, 2016

If the market’s winter of discontent has a silver lining, it’s this: dividend yields have lurched skyward, while value measures such as price-to-earnings ratios have sunk.

Translation: now’s the time to snap up top-notch dividend-payers at fire sale prices.

But there’s a common mistake you must avoid at times like this: simply seeking out stocks with high yields and low P/E’s and thinking your job is done. That’s because many of these companies are “yield traps”: their earnings and cash flow can’t back up their hefty payouts.

When the inevitable dividend cut comes—dragging the share price down with it—these investors will be left holding a very empty bag.… Read more

Ackman’s Looking At This All Wrong

Brett Owens, Chief Investment Strategist
Updated: February 2, 2016

Top-20 hedge fund Pershing Square Capital Management just announced heavy losses last year, and a tough start to 2016. The fund is currently down a little over 11 percent YTD in 2016, after losing 20.5 percent in 2015.

The problem, CEO Bill Ackman explains: “We believe that our continued negative outperformance in the first few weeks of the year relates primarily to forced selling of our holdings by investors whose stakes overlap with our own.”

I’m guessing that’s his way of admitting his market timing hasn’t been the best of late. And his short-term focus is hurting the timing of at least one company he’s currently involved with.… Read more

The Easiest Way To Time The Market

Brett Owens, Chief Investment Strategist
Updated: August 9, 2017

January’s financial dumpster fire torched nearly every portfolio on the planet. Easy to say, “buy the dip” but harder to do effectively. Most portfolios underperform the stock market at large because investors sell low, only to buy higher later!

Except for DRIP investors, that is. They scale up their stock purchases during pullbacks, and scale down their buying during run-ups. That’s how wealthy people invest… they buy more when prices are low.

If you’re not familiar with a DRIP, I’ll explain what they are, and show you how to set one up in a minute. And if you know DRIPs, I’ll show you a new technique you can use to maximize your performance.… Read more

3 Dividend Stocks To Buy Now And Hold Forever

Brett Owens, Chief Investment Strategist
Updated: August 10, 2017

With the S&P 500 down nearly 7% in the last three weeks alone, you can’t be blamed for wanting to throw up your hands and sell all your stocks.

But that’s the worst thing you could do, especially if you have a long time horizon and you mainly hold dividend-paying US companies. In fact, if you’re in this camp, you can largely ignore the market’s daily gyrations. And really, you should take advantage of them.

The numbers tell the tale: according to Ned Davis Research, dividend-paying stocks returned an average of 9.3% a year from 1972 through 2014, compared to 2.6% for non-dividend payers—and they did so with less volatility.… Read more

Four Big Dividends Living on Borrowed Time

Brett Owens, Chief Investment Strategist
Updated: January 22, 2016

This week oil crashed below $30 a barrel, the broader domestic indexes continued to pull back, and economies around the world – namely China’s – are growing riskier. There might be what some consider panic in the streets… but this isn’t entirely a buying opportunity.

After all, there are lots of dividend traps, falling knives and paper payout tigers ready to obliterate your value buying. It pays to be cautious and careful right now. Especially for asset-price dependent firms.

Over the past few weeks I’ve been digging into some of the worst dividend payers whose shaky business earnings are putting their payouts at risk.… Read more