I know I don’t have to tell you it’s a minefield out there for income investors.

Ten-year Treasuries yield a pathetic 1.5%, and dividend-growth stocks have been on a tear. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL), which holds shares of companies that have hiked their payouts annually for 25 years or more, has soared 12% year-to-date, more than doubling the S&P 500’s gain:

That’s left many Dividend Aristocrats overvalued and ripe for a fall. Worse, it’s driven their dividend yields to historic lows.

Just take a look at food distributor Sysco (SYY), which yields 2.4% today, barely above the S&P 500 average and near lows not seen in nine years:

To get that meager yield, investors are buying a stock with a trailing-twelve-month price-to-earnings (P/E) ratio of 37, way above its five-year average of 23!… Read more

The market is on fire right now, which is great if you’re fully invested. But if you have cash on the sidelines, you might be worried about jumping in. And with good reason–with the S&P 500 reaching nosebleed valuations, “safe” indexing is going to expose you to potential losses.

There’s an alternative, and it’s particularly compelling because it also nets a high income stream while you wait for your holdings to go up in value. I’m talking about yields of 8% with strong upside in the form of capital gains potential to boot.

These big payouts are paid by funds that are undervalued for one simple reason: ignorance.… Read more

Dividend stocks are a “no brainer” compared to Treasuries says Bob Doll, the chief equity strategist for Nuveen Asset Management. He told Bloomberg Radio that with dividends outpacing yields on government bonds, it’s an easy decision in favor of equities.

But which high yield stocks should be bought, and which are already overbought?

Anything that pays is hot. Yields on most utility stocks, for example, are at their lowest levels this decade with popular payers such as Southern Company (SO), Duke Energy (DUK) and Dominion Resources (D) dishing investors between 3.4% and 4% – well below their historical payouts.

Utility Yields Driven Down by Dividend-Hungry Investors

With respect to the 10-Year Bill’s sad 1.6% yield, these dividends look great.… Read more

The market keeps reaching record highs and many analysts worry equities are overvalued in a post-Brexit, stagnant global economy. But that isn’t stopping irrational exuberance from causing overvalued stocks to climb ever higher.

We are at risk of rapidly declining stock prices when the market comes to its senses. And in the world of high yield investments, there is an additional risk: dividend cuts would cause those stocks to fall even further. This is especially worrying risk right now, as many high yield stocks have been pushed higher even though their metrics indicate a dividend cut could come soon.

The stocks facing this risk the most are some business development corporations (BDCs), which are legally required to pay out 90% of their income or more.… Read more

Today I’ve got good news and bad news for you—and four stocks with dividends destined to double soon.

First, the good news: S&P 500 companies are sending out more dividend cash than ever before. According to FactSet, dividends per share (DPS) are at an all-time high, hitting $43.90 in the 12 months ending in April, up 7.5% from the previous 12-month period.

The bad news? The party’s ending … or at least winding down. That’s because stalling earnings growth is forcing companies to dig deeper into their profits to keep the dividend parade rolling.

Dividends and Earnings: On a Collision Course

Right now, a record 44 S&P 500 companies have payout ratios above 100%—so they’re paying out more in dividends than they earn, something they clearly can’t keep up indefinitely.… Read more

Want a diversified portfolio of uncorrelated assets with a big 8% yield? It’s possible, even in today’s overpriced market.

We can easily use just three funds to get a combined yield of 8%. That’s right—just three funds and we can turn $100,000 into a durable portfolio yielding over $660 in monthly income. These funds are in vastly different asset classes, and the dividends from one of them are even tax-free.

So what’s in this big income portfolio? First, we have the Alerian MLP ETF (AMLP), which is still down from a year ago but has capital gains upside potential thanks to changes in how the market understands weak oil prices (more on this in a bit).… Read more

There’s an alleged bubble in “low vol” stocks that is quickly extending to dividend-payers. Here’s how to play it.

Since the start of the year, the iShares Edge MSCI Minimum Volatility USA ETF (USMV) has taken in more than $5 billion, placing it first among inflows for stock-focused ETFs. The fund holds stocks that don’t move much, such as General Mills (GIS), AT&T (T) and Johnson & Johnson (JNJ).

Low vol was the rage for the first-half of 2016. Investors, wary of a stock market crash, sought refuge in these staples. USMV pays a modest 2.2%, but until last month there was hope that rising rates would breathe life into fixed income for those who needed actual yield.… Read more

The market is soaring to record highs, making all stocks too expensive to buy, right? Wrong. While exuberance is in the air, there are still a few overlooked gems paying dividends nearly 4% with strong growth potential.

We can easily build a portfolio of four stocks with overall strong revenue growth, growing dividends and a 3.9% average portfolio yield. That yield will only grow in the coming years thanks to each company’s moat, making this a durable portfolio for an IRA or for investors eyeing retirement in the next decade or beyond.

So what’s in it? We’ve got four names: AbbVie (ABBV), Brookfield Property Partners (BPY), Toronto-Dominion Bank (TD) and Western Union Company (WU) – names that have on average gone up just 2.4% in the last year, with none of them at 52-week highs (although some are close).… Read more

Feel like you missed out on the Brexit bargain hunt?

If so, you’re not alone. You had to be quick to snap up cheap dividend growth stocks when the S&P 500 plunged 5.7% in the two days following the vote, because five trading days later, it had largely recouped that ground.

So now it’s back to slim pickings for income investors. With the S&P 500 hitting new highs seemingly every day, valuations are stretched and dividend yields are down, as you can see from this snapshot of the trailing-twelve-month yield on the SPDR S&P 500 ETF (SPY):

But don’t worry. No matter how richly valued the market is, there are always strong dividend growers that aren’t getting a fair shake from investors.… Read more

Real estate investment trusts, or REITs, have been on a tear. For instance, Lexington Realty Trust (LXP) is up a shocking 32% year-to-date, and it also happens to be a stock we recommended a few weeks ago. Many more REITs are up double-digits over the past year, making income-hungry investors wary of buying at too high of a price.

This is especially true for indexing the sector, as Vanguard’s REIT Index Fund (VNQ) is up 16.9% in the last year versus the S&P 500’s modest 3.6% gain. This is great for people who bought at the bottom, but anyone looking to get into REITs now needs to be wary about blindly buying companies that comprise a broader index.… Read more