Your Instant 5-Stock Dividend-Growth Portfolio

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

Looking for an easy way to boost your portfolio’s long-term returns? Here’s one: buy and hold top-quality dividend stocks—especially those that raise their payouts every single year.

Analysis from Ned Davis Research backs that up: from 1974 through 2014, non-dividend-payers eked out just a 2.6% average annual return. That’s barely enough to stay ahead of inflation!

Dividend-payers returned 7.7%, which isn’t bad—but why settle for that when you could’ve held stocks that regularly hike their payouts and pocketed a tidy 10.1% a year, on average?

5 Growing Payouts That Go Great Together

Here’s a five-stock portfolio packed with some of my favorite dividend growers now. Each one hails from a different sector: technology, utilities, railroads, finance and telecom. (I’ll also give you a bonus healthcare pick a little further on. …
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3 High Yield Stocks at Big Discounts to Book

Brett Owens, Chief Investment Strategist
Updated: April 1, 2016

The Federal Reserve’s slowing approach to rate hikes is a big positive for firms that practice financial wizardry. Fed Chair Janet Yellen told The Economic Club of New York earlier this week that she considered it “appropriate for the Committee to proceed cautiously in adjusting policy.”

Translation – they’re going to keep moving slowly. Inflation isn’t yet in the picture, and until it is, the Fed can keep rates low for longer than most think. And that’s bullish for business development companies, or BDCs.

BDCs invest mostly in privately-held small to middle market companies ($10 million to $1 billion in revenues). They operate similar to private equity companies, and by rule, they’re required to pay out at least 90% of their income to shareholders.

Rising interest rates had the potential to stop the BDC party. …
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7 Big Dividends Insiders Are Buying

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

Legendary investor Peter Lynch was fond of saying that corporate insiders may sell their company’s shares for a variety of reasons. But there’s only one reason they buy – and that’s because they think the price is going up.

Anyone at the director-level or above in Corporate America is considered an “insider” – and it’s perfectly legal for them to buy their own company’s stock. That’s a good sign in general, and especially for the stocks that we’re interested in. It means the executive buyer is bullish on dividend growth, and as we’ve discussed before, payout growth is what ultimately sends stock prices higher.

Executive teams from two of our Contrarian Income Report companies are, right now, using personal money to buy up their own cheap stocks and big dividends. …
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The 2 Best Dividend Stocks For Your Retirement Portfolio

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

Investors, spooked by the massacre of 2008 and the market’s latest gyrations, are making the same mistake again. They’re running scared into so-called “safe” fixed-income investments like CDs and treasuries—and ignoring stocks altogether.

A recent survey by Franklin Templeton found that 37% of long-term investors thought they’d be just fine leaving stocks out of their retirement portfolios. For investors in their 20s and 30s, that number jumps to 56%.

That’s a big mistake—unless these folks are incredibly wealthy, they’re not going to be able to enjoy retirement in financial comfort. If your nest egg doesn’t have a big allocation to equities, read on and I’ll break down the best dividend stocks for you to consider today.

Because You Need to Beat Inflation

Sure, fixed-income investments …
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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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