Thoughtful reader Terry K. asks for my favorite utility dividend—specifically why I prefer NextEra Energy Partners (NEP) to Clearway Energy (CWEN):

Would like your thoughts on CWEN vs. NEP. I’ve looked at both and based on numbers CWEN looks to be the better option.

 

It has just raised its dividend.

 

Plus, it is better liked by other analysts.

Analyst ratings are a wonderful contrarian indicator. Thank you for writing in; I bet many of our fellow contrarians are asking the same thing! This is a great opportunity for all of us because it has been too long since we have lauded buying dividends that analysts dislike.… Read more

Our favorite high-yield bonds just hit a critical buying level. It’s time to make our move, and we’re going to give ourselves an edge by “cherry-picking” 10%+ yielding picks from the top bond minds on the planet.

And we’re going to pay nothing to do so!

The Titans of the Bond World Give Us Their Best Picks—for Free

I hate to hear people say the bond world is boring. If you’ve read about it, you know it’s packed with wild characters who’ve racked up massive fortunes.

You can’t talk about bonds without mentioning Bill Gross, the so-called “Bond King,” who basically invented the idea of trading bonds in the ’70s.… Read more

Let’s face it: yields on Treasuries and “regular” stocks are still pathetic! We need much bigger payouts (I’m talking yields of 7%+ here) to fund our lifestyles in these inflation-weary times.

Trouble is, most of us have been conditioned by the media and Wall Street to believe that all yields that big are dangerous. Nothing could be further from the truth!

Case in point: my favorite high-yield vehicles, closed-end funds (CEFs), which hold all the assets most folks own, like blue chip stocks, corporate bonds and real estate investment trusts (REITs). Except when we buy these assets through CEFs, we get much higher yields than we would if we bought “direct.”… Read more

To retire on dividends, we have just two requirements. They are simple, though perhaps not exactly easy:

1. Earn safe, meaningful yields. Five percent is our floor, thirteen is our stretch goal. We’ll discuss five stocks in this dividend range shortly.
2. Keep our principal intact. To do this we’ll focus on “low beta” stocks—shares that move less than the broader market.

Beta says how much (or how little!) an investment moves compared to some benchmark. With stocks, beta is usually going to measure movement against the S&P 500.

Here’s an example. Let’s say a stock has a beta of 0.50.… Read more

Don’t let the debt-ceiling fracas (or whatever doomsday scenario the media is obsessing over on any given day) distract you: this economy is better than it’s been in years—even if that hasn’t (yet) shown up in the stock market.

This disconnect between what the media is preaching and the facts on the ground is more than a fact—it’s an opportunity for us contrarian dividend investors. And we’re going to exploit it with our favorite investments: bargain-priced (and high-yielding!) closed-end funds (CEFs).

Thanks to all the irrational gloom out there, many CEFs still trade at attractive discounts. As the public comes around (and the data we’ll look at next shows they are), CEFs are likely to rise, both because of their low valuations and gains in the broader market.… Read more

We were only a minute into our home-from-school commute. But I wasn’t going to last seven more.

“Hey!” I asserted in my dad voice. “If I hear any more whining about the air conditioning, it’s going off. And we’re rolling down the windows. And…”

I paused for effect and soaked in the temporary silence.

“We’ll drive home like it’s the 1980s.”

Two small gasps emerged from the back seat. My threat appeared to hit home.

My kids know from household folklore that car rides in the ‘80s were no joke. Seat belts were present, but not required. Smoking in the driver’s seat was common.… Read more

There’s a $600-billion river of cash flowing straight out of Corporate America—and straight into some dividend investors’ pockets. Today we’re going to grab our share.

Companies don’t make much of the cash outlays we’re going to talk about. You might catch a line or two about them in an earnings release, but that’s it. That’s because they’re trying to stay below the radar of the Biden Administration, which is starting to tax these payouts, and has even threatened to quadruple the slice they’re taking now.

As for us, we’re not really focused on these cash payouts themselves (though we’ll happily take our share!).… Read more

Few folks realize it, but there’s a great place to invest our money to profit from “DC drama” like the debt-ceiling fiasco. It’s literally hiding in plain sight.

I’m talking, oddly enough, about government debt! But not federal-government debt. Instead we’re going to bypass DC and go with municipal bonds, which are issued by sleepier (in a good way!) state and local governments to pay for infrastructure projects.

Because here’s what most folks don’t realize: “munis” do great when political shenanigans abound in DC. To see what I mean, think back to 2011, another period when a Republican House and a Democratic president scrapped over the debt ceiling.… Read more

The stock market is coming off another sugar high, but REITs (real estate investment trusts) are still cheap. That’s great news to us income investors, who look past the piddly paying blue chips on the S&P 500. We prefer REITs because they pay, and we appreciate a deal when we see one:

REITs Remain Near Their Bear-Market Lows

REITs are on the mat because the Federal Reserve has relentlessly hiked rates. Good. Those of us who want to retire on dividends alone love how wide REITs’ yield spread over basic stocks has become.

Even a vanilla fund like Vanguard Real Estate ETF (VNQ) is a better income source than “America’s ticker”—VNQ yields 4.1% while SPDR S&P 500 ETF only pays 1.6%.… Read more

There’s a lot of rhetoric flying around about the debt ceiling these days, and it’s set up a very nice opportunity for us to buy a 7%-yielding closed-end fund (CEF) we always have on our watch list.

That would be the Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX). 

A good way to think of QQQX is like a NASDAQ index fund but with higher dividends and a smart way to turn volatility into extra dividend cash. I say QQQX is like a NASDAQ index fund because its holdings mirror those of the Invesco QQQ Trust (QQQ), including all the big-cap techs we all know well:

Source: Nuveen

QQQX, like QQQ, tracks the NASDAQ 100, so it’s no surprise that you’ll see great tech firms in its portfolio.… Read more