A Three-Fund Portfolio For 8% Dividends

Brett Owens, Chief Investment Strategist
Updated: July 21, 2016

Want a diversified portfolio of uncorrelated assets with a big 8% yield? It’s possible, even in today’s overpriced market.

We can easily use just three funds to get a combined yield of 8%. That’s right—just three funds and we can turn $100,000 into a durable portfolio yielding over $660 in monthly income. These funds are in vastly different asset classes, and the dividends from one of them are even tax-free.

So what’s in this big income portfolio? First, we have the Alerian MLP ETF (AMLP), which is still down from a year ago but has capital gains upside potential thanks to changes in how the market understands weak oil prices (more on this in a bit).… Read more

Your Playbook For The New “Dividend Bubble”

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

There’s an alleged bubble in “low vol” stocks that is quickly extending to dividend-payers. Here’s how to play it.

Since the start of the year, the iShares Edge MSCI Minimum Volatility USA ETF (USMV) has taken in more than $5 billion, placing it first among inflows for stock-focused ETFs. The fund holds stocks that don’t move much, such as General Mills (GIS), AT&T (T) and Johnson & Johnson (JNJ).

Low vol was the rage for the first-half of 2016. Investors, wary of a stock market crash, sought refuge in these staples. USMV pays a modest 2.2%, but until last month there was hope that rising rates would breathe life into fixed income for those who needed actual yield.… Read more

A Four-Stock 4% Dividend Growth Portfolio

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

The market is soaring to record highs, making all stocks too expensive to buy, right? Wrong. While exuberance is in the air, there are still a few overlooked gems paying dividends nearly 4% with strong growth potential.

We can easily build a portfolio of four stocks with overall strong revenue growth, growing dividends and a 3.9% average portfolio yield. That yield will only grow in the coming years thanks to each company’s moat, making this a durable portfolio for an IRA or for investors eyeing retirement in the next decade or beyond.

So what’s in it? We’ve got four names: AbbVie (ABBV), Brookfield Property Partners (BPY)Toronto-Dominion Bank (TD) and Western Union Company (WU) – names that have on average gone up just 2.4%Read more

4 Ridiculously Cheap Dividend Stocks to Buy Now – and 1 to Sell

Brett Owens, Chief Investment Strategist
Updated: July 18, 2016

Feel like you missed out on the Brexit bargain hunt?

If so, you’re not alone. You had to be quick to snap up cheap dividend growth stocks when the S&P 500 plunged 5.7% in the two days following the vote, because five trading days later, it had largely recouped that ground.

So now it’s back to slim pickings for income investors. With the S&P 500 hitting new highs seemingly every day, valuations are stretched and dividend yields are down, as you can see from this snapshot of the trailing-twelve-month yield on the SPDR S&P 500 ETF (SPY):

SPY-2016-Dividend-Yield

But don’t worry. No matter how richly valued the market is, there are always strong dividend growers that aren’t getting a fair shake from investors.… Read more

3 Oversold REITs Yielding 6% or More

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

Real estate investment trusts, or REITs, have been on a tear. For instance, Lexington Realty Trust (LXP) is up a shocking 32% year-to-date, and it also happens to be a stock we recommended a few weeks ago. Many more REITs are up double-digits over the past year, making income-hungry investors wary of buying at too high of a price.

This is especially true for indexing the sector, as Vanguard’s REIT Index Fund (VNQ) is up 16.9% in the last year versus the S&P 500’s modest 3.6% gain. This is great for people who bought at the bottom, but anyone looking to get into REITs now needs to be wary about blindly buying companies that comprise a broader index.… Read more

How To Buy “Accelerating” Dividends for 100% Upside

Brett Owens, Chief Investment Strategist
Updated: July 13, 2016

If you think dividend stocks are about to soar, wait until you see what happens with the select subset that is actually accelerating its payouts.

Low rates for longer means net present value calculations look great for stocks that pay meaningful yields. And those that are boosting their dividends at an increasing rate are basically breaking Wall Street’s spreadsheets.

Take CoreSite (COR), a developer and landlord for data centers that we first discussed in March. The company had recently increased its payout by 26%, an acceleration over last year’s “mere” 20% boost:

COR-Div-Growth

Investors who bought CoreSite the day it declared the latest increase are sitting on 54.9%… Read more

These 4 Stocks Can Save You From the Next Market Crash

Brett Owens, Chief Investment Strategist
Updated: July 11, 2016

Is the next market brushfire right around the corner? And are investors in denial about it?

If recent moves in the CBOE Volatility Index (VIX) are any indication, the answer to both questions could be yes.

The market’s so-called “fear indicator” plunged 40% in the week following the Brexit vote—its largest-ever drop—as options traders bet the worst is behind us. The VIX has moved back up only slightly since.

VIX-Brexit-Chart

But don’t break out the bubbly yet. Because if anything, this sudden outbreak of investor contentment—and the disappointment that’s sure to follow—sets the stage for more, not less, volatility to come.

The yield on the 10-year Treasury is the canary in the coal mine.… Read more

Miss the Brexit Bounce? 3 Stocks With 50% More Upside

Brett Owens, Chief Investment Strategist
Updated: July 9, 2016

Did you miss the Brexit bounce? Sure, much of the easy money has been made – but not all of it.

Stocks headquartered in the U.K continue to languish. Some deservedly so, but there are a few fantastic companies trading at big discounts to their usual market prices.

As we saw last week, fortune favors the bold (and the quick). Here are three stocks in three sectors set to rally strongly from Brexit weakness for the bold investor.

British Banks Are Cheap

The Royal Bank of Scotland (RBS) is no stranger to wild swings, even though it happens to be the fourth largest U.K.… Read more

2 High Yield Utility Stocks to Buy and 2 to Sell Now

Brett Owens, Chief Investment Strategist
Updated: July 8, 2016

Utilities are on fire. As boring as they may be, stocks in this sector have been climbing higher and higher in 2016, thanks to one major trend: investors are desperate for yield, but they don’t want risk.

With many high yielding assets coming with high risk, investors are looking for safety, and utilities are seen as a safe alternative. As U.S. Treasuries hit historical lows and corporate bond yields slide further, utilities become a huge attraction.

It’s no wonder, then, that the Utilities Select Sector SPDR Fund (XLU) is up 20% over the past year, with virtually all of those gains coming in the last six months.… Read more

Get a Private Equity Edge with 13.7% Yields

Brett Owens, Chief Investment Strategist
Updated: July 7, 2016

Contrary to popular belief, you don’t have to be a multi-millionaire to invest in private equity. In fact, if you have as little as $10 available in a brokerage account, you can do it.

This is especially important nowadays, because the stock market just isn’t cutting it anymore. Let’s face it: 2016 has not been that great for stocks. As we pass the halfway mark for the year, the S&P 500 is up 3%, meaning you’re looking at a 6% gain by the end of the year if the trend continues. For sure, that’s better than Treasuries, but it’s still not that great on a risk-adjusted basis.… Read more