4 Cheap Dividend Growth Stocks

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

We all know the secret to successful investing is buying low and selling high. But what does that mean, exactly – do we simply buy companies growing their top lines aggressively in today’s low-growth world?

There are dangers in this approach, which put you at risk for drastic losses. Take, for example, people who bought Twitter (TWTR) when its revenues were doubling, sure that they were getting a piece of the next big thing:

Big Losses for Twitter Enthusiasts


Smart, cautious investors avoid these dramatic losses by buying high quality, established companies when their earnings are cheap. Even better, they buy stocks that pay dividends – and raise them consistently.… Read more

4 Dividend Growers With Heavy Insider Buying

Brett Owens, Chief Investment Strategist
Updated: August 31, 2016

Legendary investor Peter Lynch was fond of saying that corporate insiders may sell their shares for a variety of reasons (estate planning, divorce, sending the kids to college). But there’s only one reason they buy – because they think the price is going up.

Insiders at dividend growers have one more reason, however – they obviously believe their payout is going up, too.

Which means when we’re looking for the next dividend accelerator and its 100% upside, we should consider insiders’ favorite payouts. Here are five candidates with big dividend growth and heavy insider buying:

Western Refining (WNR) CEO Jeff Stevens just picked up 100,000 shares last week for a cool $2.3 million.… Read more

3 Dividends Up To 10.3% For The Coming Retirement Crisis

Brett Owens, Chief Investment Strategist
Updated: August 30, 2016

Utility stocks have had a great year, but it isn’t too late to get into this sector at a reasonable valuation and lock in a 7% yield. Of course, you could always just buy the Utilities SPDR ETF (XLU) and wait for the rising tide to drive this indexing fund higher.

But there are two big problems with this approach. First, the ETF is up over 15% year-to-date thanks to the run-up in utilities:

Too Great a Year for Utilities?


The other problem: this fund yields just 3.2%. Now that isn’t bad compared to the S&P 500, but that’s less than 1 percentage point above the more stable and lower risk SPDR S&P Dividend ETF (SDY):

Low Dividends Not Compensating for Risk


If we’re going to get into utilities after they’ve run up 15%, we’re going to have to be more selective to get a better yield and less risk.… Read more

5 Risky Dividends to Dump From Your Portfolio Now

Brett Owens, Chief Investment Strategist
Updated: August 29, 2016

Today I want to tell you about a deadly retirement-planning mistake millions of Americans are making right now—and five stocks you need to weed out of your portfolio yesterday.

More on those in a moment. First, the miscalculation, which comes down to a single figure: 7%.

That’s the average annualized return most people expect from their stock portfolios over the long haul, and with good reason: it’s just below the 7.9% the S&P 500 returned every year, on average, from 1985 to 2015.

But even with a timeframe that long, you need to remember a disclaimer you’ll find in just about every mutual fund prospectus: “past performance does not guarantee future results.”… Read more

2 REITs With Attractive Yields and Growing Payouts

Brett Owens, Chief Investment Strategist
Updated: August 26, 2016

In a world where you need to hold a U.S. Treasury for 10 years to get a measly 1.5%, real estate investment trusts (REITs) have become an incredibly attractive income-yielding alternative. So attractive, in fact, that the SPDR Dow Jones REIT ETF (RWR) has soared over 12% in the last year:

REITs Rally


That also means the ETF’s dividend yield has fallen, and it now pays less than 4%. On top of that, RWR’s dividend is uneven because of the complexity of its constituents’ payouts, making this income stream an unreliable one. Dividends were $1.03 in March and 78 cents in June, and the dividend usually bounces around from quarter to quarter.… Read more

2 Popular Dividends In Serious Danger And 3 To Buy Instead

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

Is it time to buy the higher yields that industrial stocks pay, or are their dividends and profits in cyclical trouble?

I’m talking about companies that make big physical products. Their yields of 3% and even 4% or more are 50% to 100% better than the broader market. Many of these stocks are paying at their most generous rates since the financial crisis.

I like buying stocks when their yields are near the high end of their historical averages. It’s an easy, effective contrarian income strategy. And most industrials fit the bill today.

But that flies in the face of another maxim – don’t buy industrials at the top of the business cycle.… Read more

2 Warren Buffett Favorites to Sell Now – and 1 to Buy

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

This time, Warren Buffett actually IS losing his touch.

Historically, of course, there are few better examples to follow. If you’d invested in the Oracle of Omaha’s holding company, Berkshire Hathaway (BRK.A), 30 years ago, for example, you’d be sitting on a 3,000% gain today, compared to “only” a 953% total return for the S&P 500:


But even Buffett makes the odd bad call, and I think he’s done just that by buying—and holding on to—the two stocks below. Ironically, they’re both moves the Street seems to be giving him the benefit of the doubt on—for now.

Further on, we’ll look at a canny pick the Oracle’s right to hold on to, even though the rest of the “smart money” has thrown in the towel.… Read more

Danger In Junk Bonds – Sell These Funds Today

Brett Owens, Chief Investment Strategist
Updated: August 19, 2016

More companies are going bankrupt now than any time since the Global Financial Crisis. This is a big problem for everyone, but nowhere is the pain more acute than in the high yield bond universe.

More defaults mean more non-payments on bonds and lower prices for those bonds, causing a junk bond portfolio to fall in both value and income. For anyone who holds corporate bonds or corporate bond funds, it’s time to pay attention.

Usually the market anticipates these trends and discounts bonds before the defaults spike. This happened in 2015. Investors sold junk bonds by the truck full, and a lack of liquidity was a broad market-wide issue.… Read more

Dividend Cut Alert! Three 12% Payouts In Big Danger

Brett Owens, Chief Investment Strategist
Updated: August 18, 2016

Double-digit yields are seductive – but like sirens coaxing Odysseus’s men from the deep, they can also lead the unwary to disaster. And with more reliable dividend payers yielding less and less in this red-hot stock market, the call from those sirens is getting louder and louder. Here’s why you should plug your ears and stay the course.

One particularly popular dividend payer, Prospect Capital Corporation (PSEC), has many red flags. Currently yielding 12%, it beckons investors to come and get $10 per month for every $1,000 invested. The fact that it’s a monthly payer makes it look even more attractive, and that’s helped the stock perform well for 2016:

A Rare Bull Run for PSEC


But you should stay away.… Read more

This is How I Invest My Retirement Money

Brett Owens, Chief Investment Strategist
Updated: August 17, 2016

Vanguard just closed its most popular dividend fund to new money. If you’re not already in, I’m afraid you’re out of luck.

But I’ve got a backdoor way to duplicate – and even best – its winning income strategy. We’ll talk specifics in a minute, including stocks to buy now. But first, let’s discuss this dividend investing strategy to appreciate why it works so well in all market environments.

In a world with no shortage of financial worries, the Vanguard Dividend Growth Fund (VDIGX) is the surest long-term bet you can make with a single click of the mouse. It’s a dividend strategy that I plow 100% of my 401(K) contributions into (as I have to choose from a set list of funds – but at least I have one that always wins over time.)… Read more