My Top 3 Rules for Safe 7% Yields and 20% Upside in REITs

Michael Foster, Investment Strategist
Updated: May 16, 2017

Buying real estate investment trusts isn’t like buying other stocks; despite their high yields and big long-term returns, REITs require a bit more attention and a bit faster action than more popular dividend-payers, like blue chips and dividend-growth stocks.

But it’s more than just speed and care. To win with REITs, you need to follow three rules—and I’m going to show you those today.

These REIT rules have never been more important than they are now. Broadly, REITs are getting more valuable, but the market is getting more scared of them. This disconnect makes no sense and is partly the reason why two extremely healthy and valuable REITs—Sabra Health Care REIT (SBRA) and Care Capital Properties (CCP) recently merged.…
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2 Stocks to Buy for 100%+ Dividend Growth – and 2 to Avoid

Brett Owens, Chief Investment Strategist
Updated: May 15, 2017

Fact: When interest rates rise, you need to be in dividend-growth stocks.

Proof: They’ve handily beaten the S&P 500 in the 17 months since the Federal Reserve put the zero-interest-rate era on ice.

In just a moment, I’ll show you 2 terrific off-the-radar dividend-growth plays to snap up now—and 2 surprising blue chips you’ll want to keep well away from your nest egg.

First, take a look at how the iShares Core Dividend-Growth ETF (DGRO) has performed vs. the SPDR S&P 500 ETF (SPY) on a total-return basis since December 16, 2015, the day Janet Yellen raised rates for the first time in nine years.…
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5 Blue Chip Dividends to Sell Right Now

Brett Owens, Chief Investment Strategist
Updated: May 13, 2017

When blue chips get too popular – like the five I’m going to show you today – these “safe stocks” can actually be dangerous to continue holding in your portfolio.

The problem with blue-chip stocks? Call it the “Curse of the Dow.” The Curse says a stock that joins the Dow Jones Industrial Average will essentially hit a wall, underperforming in the ensuing months compared to how it performed before ascension. It’s not perfect, but it’s close – since 1999, 15 of 16 stocks that have joined the Dow have averaged 1% gains over the next six months, but averaged 11% gains in the six months before inclusion.…
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8 Big Dividend Increases Expected This Summer

Brett Owens, Chief Investment Strategist
Updated: May 12, 2017

Dividend growth is one of the keys to a strong retirement portfolio (and 12% annual gains forever). While any stock boasting a big stated yield is sure to grab your attention, if that dividend isn’t growing, it’s actually shrinking (as inflation eats up more and more of that income every year.)

That’s why I regularly keep my eye on dividend increases … and why I’m looking at a bundle of stocks that are very likely to up the ante on their regular payouts over the next few months.

If you’re an income investor, it’s increasingly important to focus on dividend growth because – guess what?…
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This Unloved Bond CEF Is Taking Off: Buy Now

Michael Foster, Investment Strategist
Updated: May 11, 2017

Something wonderful happened last week: one of the municipal-bond CEFs I recommended to ContrarianOutlook.com readers more than two months ago raised its dividend.

The Pioneer Municipal High-Income Advantage Trust (MAV) hiked its payout by over 5%, giving the fund a 5.3% yield.

The stock price caught a lift on the news, bringing it to a 4.3% total return in a little more than two months, outperforming the municipal-bond fund benchmark iShares National Municipal Bond Total Return Fund (MUB) and the SPDR S&P 500 ETF (SPY).

Trouncing Munis and Stocks

The hike came after a series of dividend cuts dragged down the fund’s share price over the last few years:

Falling Yields and Prices

The lower yields didn’t do much to attract new investors, so the fund’s price kept slumping along with the weaker income.…
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An 8% Yield With 25% Upside (for Contrarians Only)

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

Plenty of income investors say they are in it for the dividends. But they mistakenly fixate on erratic (and irrelevant) charts like these:

This Chart Will Cost You Money…

Instead of charts with actionable information – like these:

… While This One Will Make You Wealthy

The first chart was price-only, a source of agony for many investors. While the second was quarterly dividends, with this example representing the perfect passive income stream for any retiree.

The latter is often available at a discount because the former – the share price of Omega Healthcare (OHI) – keeps its “ticker watchers” busy.…
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Self-Storage REITs: Poised for 18% (or more) Annual Returns

Bill Stoller, REIT Analyst
Updated: May 9, 2017

From 1994 to 2014, self-storage REITs (real estate investment trusts) rewarded investors handsomely. They delivered 18% annualized returns with lower volatility (less drama) than their REIT peers.

But the past year has been brutal for shareholders of the Big 4 self-storage REITs. The storage sell-off has included sector blue-chip Public Storage (PSA), as well as Extra Space Storage (EXR) a top REIT performer for the past decade. The selling has not spared investors in CubeSmart (CUBE) or Life Storage (LSI), the re-branded Sovran Self-Storage (Uncle Bob’s).

This horrible performance over the past 12-months has come as a shock for most REIT investors who have come to expect handsome dividend increases and higher prices from these names.…
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The 9.9%+ Yields Every Retiree Must Own

Michael Foster, Investment Strategist
Updated: May 8, 2017

Let’s say you’re looking to retire and want to bring in the average American salary in your golden years.

It’s a good goal—and more than enough cash for many retirees, especially if you live outside places like, say, San Francisco, where the average one-bedroom apartment rents for $3,300 a month (!)

So how much are we talking about here?

As of March 2017, the average US worker took home $896.60, according to the Bureau of Labor Statistics. Assuming 50 working weeks a year, that’s $44,830.

Okay, so we need to get $44,830 in pre-tax passive income. Where are we going to get it?…
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3 Bargain Hotel REITs Paying up to 7%

Brett Owens, Chief Investment Strategist
Updated: May 6, 2017

The hotel industry is one of the more underappreciated income segments of the market thanks to low-yield big names like Hilton (HLT) and Choice Hotels (CHH) that operate and franchise hotels. Today, we’ll explore the dividend-rich side of hospitality via a trio of hotel REITs (real estate investment trusts) yielding up to 7% that invest in upper-echelon hotel and resort real estate.

The hotel industry is booming as America’s economic recovery continues. In 2016, hotel revenues across the board climbed more than 4% to hit nearly $200 billion – a record high. Meanwhile, STR and Tourism Economics forecast that U.S. hotels will continue chugging up the mountain over the next few years.…
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10 ETF Dividends in Serious Danger

Brett Owens, Chief Investment Strategist
Updated: May 5, 2017

Exchange-traded funds (ETFs) can be an easy “one-click way” to diversify your dividends. Instead of grinding on the viability of any single payout stream, why not build a basket of them?

But be careful – some pooled payouts are all bad and don’t even keep up with the broader market. In a minute, we’ll review ten dividend dogs masquerading around under the perceived “diversification safety” that ETFs provide.

Make no mistake, there’s a recent rush to ETFs. The 2016 U.S. Exchange Traded Funds Study by Greenwich Associates shows that institutional investors, including pension funds, are increasingly pouring their money into ETFs, from 18.9% of all ETF assets in 2015 to 21.2% last year.…
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