This 10% Yield is Trash (Plus 3 More Dividend Traps to Sell Now)

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The S&P 500 has just set new all-time highs, and so has the Nasdaq. It’s no coincidence that stocks are back to historically high valuations, and yields have been flattened back to historically low levels.

If you’re an income hunter, you know it’s a difficult time. I’m here to tell you that it’s a dangerous time, too.

Buy High and… Sell Higher?


Source: Multpl.com

Tight income environments like this make dividend investors “reach for yield” at their own peril. They forget that a stock’s yield is only as good as its cash flow because, after all, a dividend is nothing more than a promise from a company.… Read more

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A stock’s yield is only as good as its cash flow because, after all, a dividend is nothing more than a promise from a company.

CenturyLink (CTL) recently reminded us of this. Its promised $0.54 per share dividend exceeded its ability to pay. The firm’s payout ratio of 130% – the percentage of profits that it was paying as dividends – was an absurd overpromise that couldn’t last forever:

CenturyLink’s Payout Promise Was Always on Borrowed Time

CEO Jeffrey Storey insisted his team remained “committed to and confident in our ability to maintain the dividend.” I understood the commitment, but questioned the confidence–taking on debt to pay dividends is a losing game.… Read more

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A stock’s yield is only as good as its cash flow because, after all, a dividend is nothing more than a promise from a company.

CenturyLink (CTL) recently reminded us of this. Its promised $0.54 per share dividend exceeded its ability to pay. The firm’s payout ratio of 130% – the percentage of profits that it was paying as dividends – was an absurd overpromise that couldn’t last forever:

CenturyLink’s Payout Promise Was Always on Borrowed Time

CEO Jeffrey Storey insisted his team remained “committed to and confident in our ability to maintain the dividend.” I understood the commitment, but questioned the confidence – taking on debt to pay dividends is a losing game.… Read more

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Most dividend investors understandably love the idea of an 8% No Withdrawal Portfolio. It’s a simple yet “game changing” idea that you don’t hear much from mainstream pundits and advisors.

Find stocks that pay safe 7%, 8% or more and you can retire comfortably, living off dividend checks while your initial capital stays intact (or even appreciates).

Now this strategy is a bit more complicated than simply finding 8% yields and buying them. Granted the recent stock market pullback has benefited investors like us because we can snag more dividends for our dollar. Yields are higher overall, and that’s a good thing.… Read more

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If you want to clobber the stock market – and double your money every two or three years – then buying companies with accelerating dividends is an absolute must.

And I’ve got good news for you: there’s never been a better time to buy them.

That’s because dividend growth is on a sugar high: research firm IHS Markit recently predicted that global dividends would jump 10% this year—a new record.

What’s more, if you’re looking to grow your nest egg fast, you’re in luck, because accelerating dividends are the beating heart of my personal 3-step system for banking 12% annual returns for life.
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The stock market’s up, so yields are down. And while there are still some generous payers available, be careful – some are paper tigers that will probably suffer this year.

That’s exactly the danger that’s facing four enticing high-yielders (yielding up to 20%!) that I’ll discuss with you shortly.

Since stock prices generally follow their payouts higher, it’s important to remember the opposite also happens. When dividends get cut, shares get crushed.

I’ve warned readers about Frontier Communications (FTR) and its dangerous dividend for years now. Hopefully investors listened to me, because those that didn’t lost “two ways” – they lost their yield and they lost their capital:

The Danger of Dividend Cuts

Frontier’s 2017 dividend cut – as well as its 2018 dividend suspension – are just one cautionary tale.…
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If there’s ever been a perfect time to show you one of my best strategies for getting rich in the market, it’s now.

What can you expect? A simple way to grab an income stream that doubles in short order—and hands you double-digit share price growth, too!

When I say “simple,” I mean it. You’ll barely have to lift a finger. And it works best in selloffs like we’re seeing now.

Along the way, we’ll uncover 3 stocks (including one of the world’s leading semiconductor names) that when combined with this strategy hand us “hidden” dividend yields all the way up to 8.9%!…
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Interest rates are soaring—so dividend stocks are yesterday’s news. Right?

Yes and no.

While some double-digit paying dogs should be sold immediately, other dividend growers should be bought today for 25%+ upside in 2018.

The truth is, the 10-year Treasury yield’s recent run to 2.7%, a 13% rise since January 1, has tapped the brakes on the stock-market rally and hit high-yield plays like REITs hard.

10-Year Rises, High-Yielders Wobble

If you hold high-yielders in your portfolio, you likely know what I’m talking about.

So should you be worried? No way.

In fact, now is the time to buy. I’ll show you 2 dividend plays that should be high on your list shortly (including a bargain real estate play with a 5.5% yield and incredible dividend growth).…
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If you want to clobber the market in 2018—and beyond—then buying companies with accelerating dividends is an absolute must.

And I’ve got good news for you: there’s never been a better time to buy them.

That’s because dividend growth is on a sugar high: on January 6, research firm IHS Markit predicted that global dividends would jump 10% this year—a new record.

What’s more, if you’re looking to grow your nest egg fast, you’re in luck, because accelerating dividends are the beating heart of my personal 3-step system for banking 12% annual returns for life.

I’ll tell you all about this safe, simple approach, and why that 12% number is vital, in just a moment.…
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Technology changes so fast these days that firms in the sector can see their profits quickly vanish.

Sadly, their dividends can disappear just as quickly!

Recently, we’ve seen companies such as Windstream (WIN), Frontier Communications (FTR) and Allegheny Technologies (ATI) cut or outright drop their dividends, with sky-high yields suddenly evaporating, leaving retirement investors in the lurch.

More pain could be on the way. A trio of tempting tech-stock yields, including two double-digit payouts, look destined for failure.

These stocks might seem like a shoo-in as contrarian investing targets. By simply buying over-punished stocks and waiting for a reversion back to a positive mean – think the “Dogs of the Dow” – investors could collect twofold on both the recovery and the elevated dividends.…
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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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