3 Dividend Stocks Ready to Boost Payouts Twice in 2016

Brett Owens, Chief Investment Strategist
Updated: October 27, 2015

With the S&P 500 yielding a measly 2.1%, where’s an income investor supposed to look these days?

I’ll tell you where. A place where the dividends flow like maple syrup, and the companies raise their payouts not once but twice a year. I’m talking about a little place called Canada.

Investors loved the Looney and everything else Canadian when crude oil was trading hands for triple-digits. It wasn’t too long ago (January 2013) that the Canadian dollar was more valuable than its U.S. counterpart. It’s shed 25% against the greenback since.

Canadian stocks peaked 18 months later than its currency (about this time last year). They’re down 15% since. Our neighbors to the north have a commodity-driven economy, and resource prices – most notably that of oil – are usually the leading indicator when it comes to asset valuations. …
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Big Oil Remains a Big Dividend Trap

Brett Owens, Chief Investment Strategist
Updated: October 27, 2015

This time last year, crude oil was selling for more than $90 per barrel. Today it’s half that, and yield hunters are excitedly sorting through the spill in oil stocks. Stalwarts like Chevron (CVX), Exxon Mobil (XOM), and BP plc (BP) are paying 5.6%, 4%, and 7.8% respectively. At first glance, these look like great deals from reliable dividend payers. Unfortunately, these “yield bargains” are likely to cost you a few times more than you’ll earn in payouts.

No matter how well these companies run themselves, the actual price of oil is outside of their control. And when the goo is in freefall, their stock prices get drilled. Exxon fared the least worst of the three over the past year, shedding “just” 27%. BP dropped 33% and Chevron, which some incorrectly believe is insulated from falling oil prices thanks to the diversity of its operations, fell 40% over the same time period. …
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This 6.5% REIT Is On Sale

Brett Owens, Chief Investment Strategist
Updated: October 27, 2015

Most individual investors get scared when stock prices plummet. Most individual investors also underperform the market itself consistently. This is no coincidence.

Market drops are a great opportunity to put new capital to work – especially if you’re an income investor. When you purchase shares for cheap, you’re also getting more dividend per dollar you invest. This boosts your portfolio’s overall yield. And you can actually turbocharge this strategy, too, simply by avoiding a single pitfall.

Income Investors Have Only One Thing To Fear

If you buy a stock for the dividend, is there any reason why you should care if its price goes down or up? Hopefully you won’t need to spend the capital within five years– otherwise you should have purchased a shorter-term vehicle that guarantees return of principal, like a CD. …
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Why Kimberly-Clark is a Washed Up Dividend Aristocrat

Brett Owens, Chief Investment Strategist
Updated: October 27, 2015

Consistently growing sales of diapers, paper towels, and tissues have padded the pockets of Kimberly-Clark (KMB) shareholders since the company went public in 1928. KMB has paid a dividend for 81 years in a row, and raised it for 43 straight years and counting. But this streak is in danger if the company can’t peddle more paper products soon.

In 2014, KMB paid out 70% of its free cash flow (FCF) – 86% of its earnings – in dividends. And while its FCF lingers near 2010 levels, the company has increased its dividend by 18% since then. As management “keeps the streak alive” it’s taking on debt to fund shareholder rewards – ever increasing dividends and share buybacks. Since 2010 it’s spent 63% of its FCF on dividends: …
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