This “Zero-Level Analysis” Can Crush Your Dividend Income

The Contrary Investing Report

Investing and Trading News, with a Contrarian, Sarcastic Twist!

This “Zero-Level Analysis” Can Crush Your Dividend Income

Who’s cooking Thanksgiving dinner for you tomorrow?

Specifically, I want to know if your family is doing the cooking – or if you’re outsourcing the meal prep to a robot.

If it sounds like a silly question, well, let’s frame it with respect to our usual beat – generating safe 7% and 8% yields in your retirement portfolio. Would you blindly buy and sell dividend payers based on the “insights” of a computer?

I often hear from readers who catch a “robo rating” on one of our holdings and worry. Even when the analysis is mere inches deep, like this one:

(Your stock) appears to be not be meeting its earnings expectations for past 6 quarters, the profitability of the company is poor which affects its valuation, and its ability to maintain its dividend.…
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The Fed Just Made These 7% Yields a Buy

The Federal Reserve’s rate hikes getting you down? You’re not alone.

A lot of readers have written in, worried that the Fed’s plans to increase interest rates in 2018 are going to hurt their portfolios. Investors starved for income have been piling into high-yielding assets that could get hit by a selloff if interest rates rise.

Those assets would go down because when the Fed increases interest rates, it causes rates all around to go up. So if you hold a bond that pays an interest rate from before that rate hike, its resale value will decline because there are now new bonds that pay higher interest rates, which makes the older, lower-yielding bond less desirable.…
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Why Coke Could Be the Next GE (and 1 Stock to Buy Instead)

Let’s dive into the General Electric (GE) dividend massacre that sent the market reeling last week. When the dust settled, the payout took a 50% haircut, and the stock had plunged about 11%.

Before I go on, I should tell you that GE isn’t the only household name I’m worried about. Further on, I’ll show you another investor “sacred cow” that’s showing some eerily similar signs. Then we’ll look at an unloved pharma play that’s more than worth your attention now.

First, let’s pick through the GE wreckage and see what we can learn, and where the stock could go from here.…
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5 “Hidden” Dividend Stocks With Safe Yields Up to 9.3%

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 9.3%. 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.…
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3 BDCs Paying Up to 13%, Trading for 71+ Cents on the Dollar

There’s been a mini-wave of insider buying in the BDC (business development company) sector. This is worthy of our attention for two reasons:

  1. These firms pay fat yields (we’ll discuss 3 paying up to 13%),
  2. Their stocks are trading below book value.

This means we can buy these firms for as low as 71 on the dollar and get their dividend streams (and future cash flows) for free. (Remember when I told you to buy four big bank stocks when they were trading below book? If you followed my advice 18 months ago, you made a lot of money).

We’ll analyze each of these “pennies on the dollar” BDCs in a minute.…
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16 CEFs That Crush the Market and Yield 5%+

There are plenty of great reasons to invest in a closed-end fund, including my No. 1 reason: dividends! With CEFs routinely throwing out yields of 6% and up—often paid monthly—they’re tough to beat in a world where Treasury yields are stuck around 2.4%.

If you’re new to these funds, your timing couldn’t be better. I recently wrote a primer on CEFs that gives you all you need to know.

And today I’m going to show you 16 CEFs with juicy yields all the way up to 11%.

But before we get to that, we’re going to zero in on the one thing that makes the difference between a winning fund with a stable—and growing—dividend and a dangerous dividend trap: management.…
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The Secret to 27% Yearly Gains with REITs

We were inching forward on a busy road in suburban Boston. I looked out our window and asked my friend how much of the retail strip to our right he’d short (if he could).

Joey works for a real estate hedge fund in New York, by the way.

“All of it,” he replied without hesitation.

He paused.

“Sell it all.”

I nodded in agreement. Death by Amazon before our very eyes!

Now you and I don’t normally chat about brick and mortar stores because, quite frankly, who cares about retail stocks. They don’t pay big dividends unless they’re in big trouble, like Macy’s (M) (and its 7.6% mirage yield) right now.…
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This Could Earn You $2,500 in Monthly Income in 2018

Today we’re going to take on one of the biggest investing myths there is—and expose this so-called “gospel” for the dangerous falsehood it really is.

It goes like this: diversification protects you from big losses in a downturn, but that “shield” costs you in the form of income and missed gains.

Well, I’m here to tell you that this statement couldn’t be more wrong. The truth is, you can have both.

I’ll tell you how in a moment. Then I’ll show you 6 unsung funds that hand you instant diversification plus market-beating gains and a special extra bonus: a dividend yield that triples up the payout on the average S&P 500 stock.…
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4 Tech Dividends Up to 13.3% – Buy 1, Sell 3

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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The “Quiet” Dividend Aristocrats: 2 Winners, 2 Losers

Stocks that raise their dividend meaningfully every year will make you a lot of money over the long haul… provided they continue to boost their payouts, of course.

Studies by two global investment heavyweights, BlackRock and GMO, have shown that 90% of U.S. equity returns over the past 100 years have been thanks to dividends and dividend growth.

Ned Davis Research also conducted its own 43-year study on stock returns. The conclusion? Dividend payers are good… but dividend growers are great. Stocks that paid a growing dividend delivered double-digit returns and outpaced steady dividend payers by nearly one-third:

Annual Rate of Return (Ned Davis Research)

Over time, this compounding really adds up as these stocks pull away from stagnant payers and the market at-large:

Dividend Growers Pull Away Over Time

Worried about the Fed’s rate cycle?…
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