Beat Wall Street With These 6 Dividend Payers

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

As we approach tax time, many investors open their brokerages statements for the first time in a year. Those that “outsourced” their investing decisions to fund managers are often disappointed. On the whole, these vehicles tend to underperform the broader market.

Of course there are exceptions. For example, the Vanguard High Dividend Yield ETF (VYM) has outperformed the S&P 500 over the past five years (83.4% cumulatively versus 81.6%). It pays a 3.4% yield today, which is certainly better than the S&P’s paltry 2.1% payout.

But VYM can leave you holding an unexpected tax bill this time of year. Even if you didn’t sell your shares of the fund in 2015, its realized gains can be passed onto you. The IRS doesn’t care if you yourself sold shares in the fund – it watches to see if the portfolio managers sold their holdings for profits during the year. …
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A New Dividend ETF With 585% Upside

Brett Owens, Chief Investment Strategist
Updated: March 23, 2016

A few months back, I ranked my five favorite dividend ETFs – and shared my top pick to buy and hold forever. Since then, three new ETFs have launched that address the main problem I had with the strategies I reviewed the first time around.

The result? A 585% return over a 15-year period!

I’ll share the specifics and tickers – and my discussion with their portfolio manager – in a minute. But first, let me give you some background on dividend ETFs so you’ll appreciate why these new strategies are superior.

Sadly, Most Dividend ETFs are Dogs

Dividend-focused strategies should outperform the market over the long haul. I showed you why last week, with a simple investing formula that nets 10% annual returns …
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3 Vice Stocks With High Dividends And 20% Upside

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

Vice pays if you’re an investor. You’ll earn higher yields and returns investing in booze, tobacco, firearms, and gambling than you will in feel-good stories like clean energy.

“First-level” investors tend to avoid these types of stocks. As a result, they’re often cheap.

For example, you may think smoking is a fading habit. But even today, one in six Americans still smoke. Despite the warning labels, the public campaigns, and a concerted effort to ban smoking in most public places, some folks still just want a cigarette.

And since smokers are going to keep smoking, we should consider the perennial dividend growers who profit from the sustainability of cigarettes. Here are my three favorites…

Three Rising Dividend Yields From Cigarettes

Philip Morris International Inc. (PM) sells a range of tobacco, nicotine and cigarettes globally. …
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These 3 Dividends Could Grow Forever

Brett Owens, Chief Investment Strategist
Updated: March 21, 2016

Billionaire investor George Soros said it best: “Good investing is boring.”

Two great examples: dividend reinvestment plans (DRIPs)—an automatic way of building wealth that most investors ignore—and the S&P 500 Dividend Aristocrats.

Let’s take the second one first. Many of the 50 companies on the Dividend Aristocrats list peddle everyday staples like tape, telephone service and over-the-counter drugs—products that are about as humdrum as you’ll find.

These are household names like Colgate-Palmolive (CL), Kimberley-Clark (KMB), and Clorox (CLX). (I’ll give you the names of my three favorite Dividend Aristocrats in a minute.)

But these companies have a big edge over the flashy wearable tech and biotech stocks investors usually go gaga for: they pay steady dividends. Not only that, they’ve all hiked their payouts for 25 straight years. …
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The 3 Best Dividend-Paying Telecom Stocks To Buy Now

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

Looking for high, safe income? If you’re like many investors, you probably look to electric utilities first.

But I think telecom stocks are a better bet right now. I’ll give you my top three in a minute. First, let me explain why.

The allure of utilities is obvious: you have to buy power whether the economy is soaring or tanking. Utilities also give you “China insurance,” because they’re almost entirely focused on the US.

But here’s the problem: after last year’s panic over rising interest rates sent utilities plunging, they’re back in vogue. Since January 1, the Utilities Select Sector SPDR Fund (XLU) has jumped 11.2%, while the S&P 500 is down 1.1%.

That rise has driven up utilities’ P/E ratios and chipped away at their dividend yields. …
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6 Cheap Dividend Growth Stocks

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

Growth at a reasonable price, or GARP, is an investing strategy that blends value and growth investing. Instead of just buying a stock that’s cheap, or one that’s growing earnings fast, we look for stocks that appear decently priced with respect to year-over-year growth.

For example, a company growing 15% annually with a price-to-earnings (P/E) ratio of 15 or less would be considered cheap by GARP standards. Since the “E” is growing at 15% per year, the P/E next year will either decline towards 13, or the stock price will rise in tandem with earnings.

It sounds like a foolproof investing formula. Problem is, everyone knows it is. Which is why there are exactly ZERO stocks in the universe that have a P/E below 15, and earnings growth above 15%, according to YCharts. …
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5 Big Dividend Investing Mistakes (and How to Avoid Them)

Brett Owens, Chief Investment Strategist
Updated: March 14, 2016

Dividend stocks are a great way to build long-term wealth. But how do you pick the right ones—and steer clear of companies whose payouts are headed off a cliff?

You can start by avoiding the five classic blunders below. If you’ve made any of them, don’t worry. We all have. But keeping them in mind will help you stay off the rocks and boost your future returns.

  1. Focusing on High Yields—and Nothing Else

For many investors, buying dividend stocks is a simple matter of seeking out a high yield—above 6%, say—and hitting the buy button.

That’s the worst thing you can do, because many stocks paying out at those levels are nothing more than “yield traps”: their profits and cash flow simply can’t back up their hefty payouts. …
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4 High Yield REITs Paying Up To 11%

Brett Owens, Chief Investment Strategist
Updated: March 11, 2016

The S&P 500 may yield just 2.2% today – but if you smartly invest in stocks that specialize in profitable niches, you can collect 6-11% yields right now. With double-digit price upside to boot!

Real Estate Investment Trusts (REITs) are some of my favorite vehicles for specialization and yield. REITs must have 75% of their assets in actual real estate and earn 75% of their income from those assets. These dividend machines are legally required to pass along at least 90% of their earnings to shareholders.

This is actually the best time to buy REITs this decade. The Vanguard REIT Index ETF (VNQ) pays 3.9% today – just about its highest since 2009. You’ll bank easy double-digit gains buying high quality REITs when their yields are high. …
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3 Healthcare Dividends With 200% Upside

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

Worried about President Trump? The Fed? China’s economy?

All of the above?

If so, here’s some simple advice – ignore it all, and invest only in “sure things.” You see, no matter what American voters, Janet Yellen, or Xi Jinping decide to do later this year, there’s one sure economic bet in the U.S…

The country will be a lot older in the future than it is right now – thanks to 10,000 Baby Boomers turning 65 every day. Remember how this generation drove the U.S. economy since their infancy in the 1950s?

  • Post-WWII makers of baby products recorded record profits thanks to their wares flying off the shelves.

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These 2 Stocks Could Boost Their Dividends Twice In 2016

Brett Owens, Chief Investment Strategist
Updated: March 7, 2016

Looking for an easy way to boost your portfolio’s yield by 30% and watch your dividends rise more than once a year? I’ve got one for you. And it’ll help you pick up some valuable international exposure, to boot.

All you have to do is look north, to Canada, where there are plenty of top-flight dividend stocks on sale now, like the two I’ll name a little further on.

I know that when most US investors think of Canada, they think of oil and gas—not exactly the best place to be right now. (And these days, some of us may be looking to our northern neighbor as a refuge if Donald Trump wins the presidency.)

But here’s what you may not know: the energy sector, important as it is, only accounts for 10% of Canada’s GDP. …
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