3 Big Money Favorites With 25% Downside

Brett Owens, Chief Investment Strategist
Updated: May 4, 2016

Most investors think it’s a good thing to be long alongside the “Big Money.” But professionals’ favorites are actually the riskiest stocks you could own. Let me explain why – and share three beloved names you should sell today.

Ten days ago, Barron’s published its latest Big Money poll, where money managers shared their top stocks for the next 12 months. Three “digital utilities” were particularly popular, and why not? All three had reasonable valuations, strong cash flows and of course healthy dividends.

Last week, two reported earnings – and both got clobbered. Here’s how they’ve performed since their Barron’s love letter:

Big Money’s Tech Darlings Get Dumped


The beauty of an earnings report – and really any “news” a company reports – is in the eye of the beholder.… Read more

Don’t Sell in May: Buy These 4 Dividend Growers Instead

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

If you “sell in May and go away” this year, you could be putting a whole year’s worth of returns at risk.

Now is the time to be adding top-notch dividend stocks to your portfolio. I’ll give you four my “second-level analysis” has uncovered in a moment.

First, here’s why “sell in May” is a flawed strategy that could cost you money.

True, stocks typically struggle in the summer months: since 1950, the Dow Jones Industrial Average has gained an average of 0.4% from May through October, according to the Stock Trader’s Almanac, compared to a 7.5% rise from November through April.… Read more

3 High-Yield Mortgage REITs To Buy, 2 To Sell Now

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

On Wall Street, there’s a familiar saying: the next crisis won’t look like the last one. If true, it means the next crisis won’t be in the mortgage market—it will be somewhere else.

There are reasons to feel confident about this hypothesis. Mortgage delinquency rates are falling significantly, according to data from the Federal Reserve. Back in the first quarter of 2010, delinquencies on single-family mortgages peaked at 11.26% – they’ve declined steadily since, and are quickly approaching 5%.


Mortgage Delinquency Rates Continue to Decline

Several analysts believe that on-time mortgage payments will continue to improve. Delinquencies are still high by historic standards – throughout most of the 1990s and in the 2000s, defaults stayed below 3%.… Read more

Buy These 3 High-Yield REITs While They’re Still Cheap

Brett Owens, Chief Investment Strategist
Updated: April 28, 2016

The buy-the-headline crowd is at it again. This time, they’re dumping real estate investment trusts (REITs) based on a small uptick in 10-year bond yields.

Earlier this week, the yield on the 10-year Treasury broke through 1.90% after moving in a range between 1.70% and 1.80% for the better part of April.

As is often the case, the jump had the opposite effect on REITs. Here’s how the Vanguard REIT Index ETF (VNQ), my favorite REIT ETF and a good proxy for the sector, has performed in the past week:


Why the decline? Investors are worried rising rates will make REITs less attractive, as yields on so-called “safe” investments like Treasuries shoot higher.… Read more

5 Despised Dividend-Payers With Easy 20% Upside

Brett Owens, Chief Investment Strategist
Updated: April 27, 2016

There are two easy ways to make sure your portfolio beats the market averages, and most professionals too. The first you already know: Buy dividend payers, preferably those that boost their payout annually. The second is just as simple…

Buy the dividend raisers that analysts hate the most.

We see it repeatedly – the highest rated stocks lag the dogs. When every analyst is already bullish, the only possible change in grade is a downgrade!

Bespoke Investment Group ran the numbers for the first quarter of 2016. The S&P was roughly flat (up 0.8%), while the biggest dividend payers rolled (soaring 10.2% collectively).… Read more

5 Big Dividends To Add To Your Watchlist

Brett Owens, Chief Investment Strategist
Updated: April 25, 2016

There’s a common misconception when it comes to dividend paying stocks. They’re conservative, lumbering, defensive assets only to be used as a portfolio-balancing act. In other words, “boring.”

But dividend payers have a terribly misunderstood reputation. True, they operate as defensive stocks – but they can also be great instruments of profit. Imagine owning a stock that not only produces solid growth but also pays you a bonus for owning it every quarter. Now picture this investment in an industry that no one else is paying attention to making these stocks deeply undervalued and under-appreciated.

Good news – there is. High-yielding dividend stocks are great value pick-ups for investors in this market.… Read more

Buy These 3 Stocks Before Their Dividends Double

Brett Owens, Chief Investment Strategist
Updated: April 25, 2016

Study after study has shown that stocks that pay dividends—and grow them every year—are the best way to beat the market. These payouts also give you “bear insurance” because they can tide you over when your investments hit a rough patch.

But just looking for companies that hike their dividends annually isn’t enough. You need strong dividend growth, too. So you’ll want to avoid stocks like AT&T (T), which has raised its quarterly dividend just $0.01 a year since 2008. Big deal!

With that in mind, I’d like to share three “anti-AT&Ts” my research has recently uncovered—undervalued gems poised to double their payouts in the next five years.… Read more

3 Sky High Dividends to Buy Ahead of Earnings

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

Certain stocks are beating the S&P while paying dividends three to seven times the market’s average. Thanks to gradual improvements in the economy and higher interest rates, these stocks have trounced the S&P 500 in 2016, and should continue to do so.

Business development corporations (BDCs) have bounced back spiritedly from their early 2016 slump, buoyed by their steady and significant payouts. The best performers of the group have outperformed by a wide margin year-to-date—specifically Main Street Capital (MAIN), Goldman Sachs BDC (GSBD), and Triangle Capital (TCAP).

Big Payers With Better Returns


GSBD is managed by Goldman Sachs (GS), and has access to daddy’s massive investment bank’s rolodex.… Read more

These Stocks Will Hike Their Dividends 20%: Buy Now

Brett Owens, Chief Investment Strategist
Updated: April 20, 2016

With valuations stretched and earnings sagging—a forecast 7.9% drop for S&P 500 companies in the first quarter—it’s getting tougher to find reliable dividend growers at bargain prices.

You won’t find much comfort in the latest research from FactSet, either: in the fourth quarter, S&P 500 dividend per share (DPS) growth came in at 9.5%. That’s still healthy, but it’s the first time that figure has dipped into single digits since 2011.


But you should take that news with a huge grain of salt, because one sector—energy—carries most of the blame. In Q4, year-over-year DPS growth plunged to 2.4% among S&P 500 energy stocks, from 11.6% in Q3.… Read more

5 Big Dividends To Sell Now (& Avoid Until 2017)

Brett Owens, Chief Investment Strategist
Updated: April 20, 2016

The goo’s new bandwagon bulls have it all wrong: OPEC isn’t driving short-term oil prices. Nor is the latest “technical breakout.” There’s one overriding factor most investors aren’t even aware of – and it’s about to send crude 30% lower quite soon.

The problem these days with moving averages, trendlines and OPEC rumors is that every money manager on the planet has the same information. Think you see something on a price chart, or an OPEC meeting transcript? Odds are somebody else already caught the same thing – and traded off it!

It may sound tough to make a buck in this patch, but in reality it’s never been easier.… Read more