The Best, and Worst, Dividends in Big Oil

Brett Owens, Chief Investment Strategist
Updated: February 5, 2016

At first glance this looks like a terrible time to buy energy stocks. Oil prices are at historic lows, demand has pulled back, inventories are climbing, and global manipulators like OPEC and Iran are doing little to help.

But contrarian investing is successful because we invest against the herd and simple “first-level” notions. I warned you to stay away from big oil when the goo was trading 50% higher, and I hope you listened. But oil prices will eventually find a bottom – and it’s almost time to get our big oil shopping list ready.

The S&P 500 pays just 2.3%, but the firms I’m talking about pay from 3.9% all the way up to 8.7%.…
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5 REITs To Buy Now And Hold Forever

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

Now that everyone’s a bit fearful, it’s time for us contrarians to get greedy for yield.

Recently, we discussed three great dividend stocks to buy now and hold forever. These top-notch businesses are going to grow their earnings steadily in the years and decades ahead. And they’re selling at discount prices for the moment, thanks to China’s roulette wheel of a market (which has zero bearing on these companies long-term).

My only problem with these firms? Even at bargain prices, the highest payers only dish 3.1% annually.

Real Estate Investment Trusts (REITs) provide an answer to the yield dilemma. By definition, they send most of their earnings back to investors in the form of dividends.…
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2 High Yield Stocks to Buy and 2 to Dump Immediately

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

If the market’s winter of discontent has a silver lining, it’s this: dividend yields have lurched skyward, while value measures such as price-to-earnings ratios have sunk.

Translation: now’s the time to snap up top-notch dividend-payers at fire sale prices.

But there’s a common mistake you must avoid at times like this: simply seeking out stocks with high yields and low P/E’s and thinking your job is done. That’s because many of these companies are “yield traps”: their earnings and cash flow can’t back up their hefty payouts.

When the inevitable dividend cut comes—dragging the share price down with it—these investors will be left holding a very empty bag.…
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Ackman’s Looking At This All Wrong

Brett Owens, Chief Investment Strategist
Updated: February 2, 2016

Top-20 hedge fund Pershing Square Capital Management just announced heavy losses last year, and a tough start to 2016. The fund is currently down a little over 11 percent YTD in 2016, after losing 20.5 percent in 2015.

The problem, CEO Bill Ackman explains: “We believe that our continued negative outperformance in the first few weeks of the year relates primarily to forced selling of our holdings by investors whose stakes overlap with our own.”

I’m guessing that’s his way of admitting his market timing hasn’t been the best of late. And his short-term focus is hurting the timing of at least one company he’s currently involved with.…
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The Easiest Way To Time The Market

Brett Owens, Chief Investment Strategist
Updated: January 27, 2016

January’s financial dumpster fire torched nearly every portfolio on the planet. Easy to say, “buy the dip” but harder to do effectively. Most portfolios underperform the stock market at large because investors sell low, only to buy higher later!

Except for DRIP investors, that is. They scale up their stock purchases during pullbacks, and scale down their buying during run-ups. That’s how wealthy people invest… they buy more when prices are low.

If you’re not familiar with a DRIP, I’ll explain what they are, and show you how to set one up in a minute. And if you know DRIPs, I’ll show you a new technique you can use to maximize your performance.…
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3 Dividend Stocks To Buy Now And Hold Forever

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

With the S&P 500 down nearly 7% in the last three weeks alone, you can’t be blamed for wanting to throw up your hands and sell all your stocks.

But that’s the worst thing you could do, especially if you have a long time horizon and you mainly hold dividend-paying US companies. In fact, if you’re in this camp, you can largely ignore the market’s daily gyrations. And really, you should take advantage of them.

The numbers tell the tale: according to Ned Davis Research, dividend-paying stocks returned an average of 9.3% a year from 1972 through 2014, compared to 2.6% for non-dividend payers—and they did so with less volatility.…
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Four Big Dividends Living on Borrowed Time

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

This week oil crashed below $30 a barrel, the broader domestic indexes continued to pull back, and economies around the world – namely China’s – are growing riskier. There might be what some consider panic in the streets… but this isn’t entirely a buying opportunity.

After all, there are lots of dividend traps, falling knives and paper payout tigers ready to obliterate your value buying. It pays to be cautious and careful right now. Especially for asset-price dependent firms.

Over the past few weeks I’ve been digging into some of the worst dividend payers whose shaky business earnings are putting their payouts at risk.…
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The Worst High Yield Investment Today

Brett Owens, Chief Investment Strategist
Updated: January 20, 2016

There’s a new bond king in town – and he’s warning investors about a high yield darling that’s really a backdoor energy trap.

Barron’s swapped out Bill Gross for Doubleline Capital founder Jeffrey Gundlach in its 2016 Roundtable. The publication says that Gross decided to resign his post. Whatever the case, it’s a good trade as Gundlach has had better calls and performance for years. Long live the new bond king!

His magistrate is currently warning investors about unexpected “collateral damage” from $30 oil. His warnings will sound familiar to regular readers, as we’ve already called out big oil as a big dividend trap, and picked on MLPs with unsustainable payouts.…
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This Stock Will Boost Its Dividend 4 Times in 2016

Brett Owens, Chief Investment Strategist
Updated: January 19, 2016

Call it China’s revenge—and the sequel to last summer’s horror show is no less terrifying than the original. Just ask the thousands of panicked investors who are, yet again, madly tossing their stocks over the side.

But time and again, history has shown you’re far better off buying into hysterical markets like these than selling. But where should you look for safety AND upside?

I recommend the good old US of A. By doing so, you’ll instantly dodge two big headaches: the grinding emerging market slowdown and the surging greenback, which is pummeling any profits American companies earn overseas these days.…
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3 Double-Digit Dividends Set To Fall Hard

Brett Owens, Chief Investment Strategist
Updated: January 15, 2016

Oil’s hitting 12-year lows as we speak – and that’s crushing a favorite vehicle of many income investors. If you’re not yet out, get out.

Reason being, it could easily get even worse for the goo. In fact, it probably will. A surge in either the U.S. Dollar or a depreciation of the Chinese yuan of just 15% could send crude in the $20 range. So could a continued liquidation of massive hedge fund bullish bets – they’re still long nearly 50,000 futures contracts. Yikes.

In 2015 alone the Alerian MLP Index lost 31%. Oppenheimer’s senior oil and gas analyst Fadel Gheit suggested that half of U.S.
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