5 Dividends That Will Disappear in 5 Years

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A high dividend yield can be the ultimate retirement holding. Or it can be a trap.

Today, I’m going to show you five stocks with mouth-watering yields of between 6% and 23% that are tomorrow’s dividend disasters. If you own shares in any of these firms, sell them now.

Don’t “ride these stocks down” like RadioShack shareholders did when the nearly century-old former electronics retailing giant that filed for bankruptcy protection in 2015.

RadioShack suspended its dividend in July 2012. The warning signs were there, but no one listened. Revenues had been in constant decline since their peak 16 years earlier, debts were mounting, ratings agencies were downgrading RadioShack’s bonds. And in April 2012, RSH reported the first of what would be many quarterly losses.


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Real estate investment trusts (REITs), when picked carefully, provide generous dividends that will fund your retirement cash flow needs by themselves.

Today I’m going to show you how REITs are literally the best buy-and-hold asset you can put your money into – and I’ll introduce you to three powerful real estate plays yielding up to 7.8% annually. These three are well positioned for decades of outperformance against the rest of the investment world.

We all know that REITs are income machines. First-quarter 2017 data shows that REITs on average yielded 4.1% — more than double the average S&P 500 stock!

But many self-annointed “REIT gurus” focus too much on income and ignore REITs’ other outstanding virtue: growth potential. You see, REITs are becoming an increasingly large cog in America’s (and the world’s) real estate machine. …
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Just because you’re a dividend investor doesn’t mean you’re fated to “grind out” income 3% and 4% at a time. With a slight change to your current (dare I say pedestrian?) strategy, you can keep your dividends and enjoy 81% to 437% price upside or more.

These types of life-changing returns are easily achievable within a few years. You just need to employ the ultimate contrarian dividend strategy – and buy select “born again” payouts.

The strategy is two-fold:

  1. Find the stocks with rock-bottom sentiment around them, and
  2. Only buy them when a cheery outlook is guaranteed.

First, Find Firms Burdened With This “Stigma”

Contrarian investing works because it capitalizes on overly-negative sentiment to find value. In the income world, this means buying when yields are abnormally …
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Real estate investment trusts (REITs) have essentially one job to do for their investors – pay reliable dividends. Many do, but when firms find their payouts in jeopardy things get ugly in a hurry. Which is why you need to avoid, or sell, the five ticking time bombs we’re going to discuss today.

Dividend cuts don’t just “happen.” When a REIT slashes or suspends its dividend, it’s rarely a surprise – and rarely an isolated incident.

Let’s consider Armour Residential REIT (ARR) – here’s five years of dividend cuts and misery:

Sure, the current yield for Armour always looks good at 10% or higher. Problem is, its payout can’t be trusted. And neither can these five unsustainable dividends. …
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Today I’m going to show you, hands-down, the easiest way to add rental real estate to your portfolio.

Don’t worry—you won’t have to leave your computer! Instead of hitting the streets to buy a four-plex or apartment building to rent out, we’re going to purchase a recession-proof real estate income stream straight from your online brokerage account.

And believe it or not, thanks to a current market anomaly, we can snag better deals online right now than we can in person. I’ll explain the details in a moment—including 2 stocks with yields that double what your average stock pays, and double-digit payout growth, too!

First, let me give you the lay of the residential real estate landscape.

A Bait-and-Switch Market

As I write, apartment vacancy rates across the US are tight—sitting at 6. …
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In my last article, I showed you funds that pay 6.4%+ yields and give you “crash insurance” in case of a market meltdown. The great thing about these funds is that they also offer tremendous upside in steady or up markets.

If that sounds like the best of both worlds, it’s because it is.

Instead of just buying the S&P 500 in an index fund, for example, you can choose the Nuveen S&P 500 Dynamic Overwrite Total Return Fund (SPXX). It tracks the index, provides extra downside protection and pays out a much higher dividend than index funds, too.

This isn’t the only fund that does this trick. There are dozens more.

In fact, if you’re nervous about the market and want as much safety as you can get while still staying invested, there’s one fund that’s an even better choice than SPXX: …
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Whenever a pundit says they’re going to show you some high-yield dividend picks, we all know what’s coming. Telecoms like Verizon (VZ) and AT&T (T). Maybe a utility or two, like Southern Company (SO). Sure, they’re big, they’re safe … but even when they’re down, they’re still wildly crowded trades.

So let’s explore five dividend stocks with bulletproof yields up to 7.1%. Their payouts are high because their stock prices are low – thanks to these firms’ undercover status.

I love “hidden” dividends so much that I’ve dedicated one of my premium services – Hidden Yields – to them. That’s because there’s far more value to be wrung out of lesser-known gems thanks to their lack of analyst cheerlea … ahem, coverage, and relatively small media interest. …
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I want to let you in on a shocking secret about Vanguard: they’re great active investors.

That’s right. The people almost everyone looks to for low-fee index funds are, in fact, top-flight stock pickers.

Take the actively managed Vanguard Windsor Fund Investor Shares (VWNDX): since inception way back in 1958, it’s returned an annualized 11.4%, despite being long only large cap value stocks (and avoiding more volatile small caps entirely).

Compare that to the passive Vanguard Total Stock Market Fund (VTSAX). Despite the index fund’s lower fees (which first-level investors love and Vanguard touts as a key to superior returns), VWNDX has crushed VTSAX since the latter’s launch in the early 2000s:

Index Investors Get What They Pay For

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I wouldn’t buy any old dividend payer right now, with most stock prices on the high side. But, believe it or not, there are a few quality dividend growers that are still pretty cheap.

This time last year, we discussed four fast dividend growers selling below book value. It’s almost hard to believe now that the four-pack of banks we highlighted then were selling for as cheap as 70 cents on the dollar.

But that’s how you make money with stocks – by buying good names when nobody else wants them. And since my column last April, this group gained an average of 53%:

Easy Contrarian Gains Averaging 53%!

Book value was an accurate valuation metric for these banks because most of their assets and liabilities are marked to market. …
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A few days ago, I showed you exactly why now is the time to be greedy—not fearful—when it comes to stocks.

And now, buried deep in the latest gross domestic product (GDP) report is a tiny data point that proves I’m right. It’s the clearest signal in years that now is the time to buy.

I’ll show you 7 funds perfectly positioned to take advantage while handing you safe dividend yields up to 9.3% in just a moment. First, let’s talk about that under-the-radar signal I mentioned.

The report’s headline number showed that fourth-quarter GDP rose 2.1%, slightly above economists’ expectations of 2% growth.

That’s great. But the real exciting news was in the data attached to the press release: corporate profits are up. Way up. …
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About Author

Brett

Hi, I’m Brett Owens – and I’m a financial junkie. My “problem” started incollege, when I got a little dose of the stock market – man, was I hooked…in no time, I was reading the Wall Street Journal religously.

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