These dividends are about to break free from their regulatory shackles. Once the cuffs are off, we’re going to see payout hikes up to 100%.

Even the dividend growth “laggards” in this group are due for 11% and 17% hikes. As these payouts pop, their stock prices may certainly follow.

Here’s why.

For the past decade, income investors have overlooked the big banks. The Great Recession burned a hole in the brain of every retiree who lived to tell about it.

The U.S. Treasury bailed out America’s financial sector with the Troubled Asset Relief Program, which disbursed roughly $427 billion to buy toxic assets from (and even equity in) U.S.… Read more

Hands up if you’ve heard of the Strategy Shares Nasdaq 7Handl Index ETF (HNDL). 

Right. I thought not. And I can’t blame you for overlooking this one. It’s a relatively obscure ETF, with a bit over $700 million invested across a number of assets (just what those assets are I’ll get to in a minute).

Nonetheless, HNDL is worth discussing today because it highlights a couple things we need to look out for when picking high-yield funds for our portfolios.

First up, the yield and the strategy: HNDL pays a 6.9% dividend today and promises diversification, both of which sound great.… Read more

The market looks like it’s about to fall apart. Which means we contrarians will step in, and smartly bank more dividend for our dollar.

Some of us park our dry powder in cash. Others stash in conservative bond funds to juice a bit more yield out of our savings. Let’s talk about these bonds because this is an ideal time to say goodbye to them (for a while!)

As dividend investors, we are naturally allergic to cash. After all, why leave money in dollars earning nothing when we can move it to a stock or fund yielding something?

As I write our Contrarian Income Report portfolio yields 6.3%.… Read more

It’s mid-2021, and stock prices are up, dividend yields are down, and you’re probably wondering what the heck to buy for a decent income stream as we thunder toward 2022.

It’s a head-snapping reversal from where we were a year ago, which makes now the perfect time to step back and plot our next dividend moves.

So let’s piece together our game plan for the rest of the year—and into 2022—by ranking five popular (and not so popular!) investments known for income from worst to first. You’ll find many individual tickers to put on your list here, too—including one yielding a healthy 6.8% today.… Read more

One of the so-called “rules” of income investing is that you can get a high dividend or a sustainable dividend from a stock or fund—but not both.

And to be fair, that is true of some investments. But there are plenty of exceptions, too, chief among them an asset class that sports a little-known “trick” that gives us blockbuster 9% dividends that are more than sustainable over the long run.

The CEF Secret

That asset class would be closed-end funds (CEFs), and the “trick” ties into the fund’s discount to net asset value (NAV, or the value of the investments in the fund’s portfolio).… Read more

Preferred stocks are the little-known answer to the dividend question:

How do I juice meaningful 5% to 6% yields from my favorite blue-chip stocks?

“Common” blue chips stocks usually don’t pay 5% to 6%. Heck, the S&P 500’s current yield, at just 1.3%, is its lowest in decades.

But we can consider the exact same 505 companies in the popular index—names like JPMorgan Chase (JPM), Broadcom (AVGO) and NextEra Energy (NEE)—and find yields from 4.2% to 6.9%.

If we’re talking about a million dollar retirement portfolio, this is the difference between $13,000 in annual dividend income and $42,000. Or, better yet, $69,000 per year with my top recommendation.… Read more

As I write this, the 14 funds in our CEF Insider portfolio yield a tidy 6.7%, on average. And while that’s down from the 7.5% average (and above) we’ve seen in the past, there’s a good reason: big price gains! (Because prices and yields move in opposite directions, of course.)

And recently, we’ve locked in some of those big returns with timely sales. In our June 2021 CEF Insider issue, for example, we sold the PGIM High Yield Bond Fund (ISD), which we bought in late 2019 (a lifetime ago!) when it was trading at a 10.3% discount to net asset value (NAV).… Read more

Collecting dividends is fun. Doubling our money is even better.

From time to time, Mr. and Ms. Market will present us with a deal that includes payouts plus price upside. I’m talking about 50% to 100% returns from secure dividend payers.

These “dividend doubles” require a catalyst. Some event that, if it unfolds, would launch profits—and the firm’s stock price!

Higher interest rates are a compelling “catalyst bet” today. The 10-year Treasury yield tripled between August and April. We noted a few months back that the rate move was due for a breather, and that’s exactly what has unfolded with the benchmark rate briefly edging below 1.3% last week:

Time to “Buy the Dip” in Interest Rates?… Read more

Let’s give ourselves a double shot of dividend and share-price growth by diving into a group of stocks I guarantee your friends are missing out on.

I’m talking about financial firms—particularly those that buy back their shares. We want to get into these stocks now because Fed Chair Jay Powell just took the shackles off lenders when it comes to buybacks and dividends, after the nation’s 23 biggest banks aced their “stress tests.” (Prior to June 30, the amount a bank could put toward dividends and buybacks couldn’t be more than the average of its last four quarters of earnings.)

Repurchasers Roar Back

This means we’re lined up for a surge in bank-stock buybacks—and we love repurchases because they cut the number of shares outstanding, juicing earnings per share (EPS).… Read more

Let’s break out of today’s zero-rate wasteland and help ourselves to huge, safe payouts yielding all the way up to 8.3%. And these massive payouts are tax-free too!

And, no, we won’t be hiring a team of CPAs to pull this off—nothing so expensive and impractical. Instead, we’re going to set ourselves up with a closed-end fund (CEF) that holds municipal bonds, or “munis.” And thanks to their tax-free nature, if you’re in the top tax bracket, a muni bond paying, say, a 4% dividend could be worth 7% or more to you.

I’ll give you a specific CEF that’s worth putting on your list now in a second (its 5% stated yield could be worth an outsized 8.3% to you, if you’re in the top tax bracket).… Read more