“Two Pacificos, please?” I asked the bartender.
(When in doubt, hit the lager button. The other option was Lagunitas IPA, a 6%+ refreshment. A bit heavy for our school fundraiser.)
I handed the second Pacifico to my buddy—responsible dad rule two, keep school event double fisting to a minimum—who kindly came to support the cause. I asked my friend how his Saturday was. Interior design work, he explained.
“Tell me more,” I fished…knowing that he was most definitely not an interior designer.
He’d taken a picture of his new house, uploaded it to AI, and asked for a new layout. The algorithm came back with an entire customized furnishing plan. Mapped out with images, a shopping list, costs, and even where to buy the items—all within his budget!
“How’d the design itself look?” I asked.
“Heck it’s better than I would have done!” he exclaimed.
And here’s the thing. He went on to explain that the best part about AI is the unlimited revisions. Tweak the budget, and it adjusts the items. Change the style, and it regenerates the whole look. Shopping list updates automatically.
He stared at me and said: “If I was an interior designer, you know what I’d do right now? I’d find another profession.”
Now, every design iteration my friend runs, every change he makes, hits a data center. And these massive centers look like sci-fi movie sets. Giant racks of processors that hum and glow, working nonstop to meet the needs of armchair designers tapping their preferred AI bot.
These data center processors run hot! They must be constantly cooled. Chips that overheat can slow down or even fail, causing outages. (And this interior design work brakes for nobody.)
The quiet dividend-growth winner? Monolithic Power Systems (MPWR) is the “power cooler” behind the scenes. Its specialized chips regulate electricity flow which keeps AI processors running coolly and efficiently. At a 25% annual dividend growth rate, its payout literally doubles every three years.
Last summer I suggested a simple way to get rich. Buy MPWR. The signal? Its stock price (orange line) lagged dynamic dividend (purple line):
Last Year’s “Buy” Signal for MPWR
The reason for the bargain was the stock’s powerful “dividend magnet,” the safest and surest way to get rich in stocks. Over time, stock prices always follow their payouts (for better or for worse!). So, we love stocks like MPWR because we can’t help but make money!
But could MPWR sustain its 25% per year dividend hikes? Yes—in fact, the company just improved upon its impressive baseline and hiked its dividend 28%. Twenty-eight percent!
Let’s math together. This dividend doubles every two or three years. That means if you buy today and the payout keeps compounding at this pace, you’re looking at a yield on your original investment of 2%…4%…even 8% within a decade. That’s how a modest dividend payer today funds your retirement tomorrow.
You won’t hear about this company from the simple suits on CNBC. MPWR doesn’t have the brand recognition of NVIDIA (NVDA) or the headline appeal of a flashy tech startup. It’s a “boring” fabless chipmaker (meaning it designs chips but doesn’t manufacture them). Manufacturing partners handle production. This “capital light” model keeps margins fat—gross margins above 55%—and cash flow enormous.
Obscurity is perfect for contrarians like us. My Hidden Yields subscribers have been treated to 57% total returns on our purchase of MPWR, good for 76% annualized. (And if you read me here at Contrarian Outlook, I gave you a heads up last July that the “power cooler” of AI was about to pop. Hope you took advantage!)
The stock still looks attractive here. Remember, every new AI model needs more computing power, which consumes a ton of juice. MPWR’s chips are a must-have to manage the electricity flow.
This is the kind of stock that first-level investors completely overlook. They chase NVIDIA at 35-times earnings and ignore the company that cools down NVIDIA’s data centers so that they can actually work. Ha! Enjoy your expensive vanilla serving, everyone. We’ll take the underappreciated power cooler with the popping payout.
Now here’s where it gets even better for my Hidden Yields subscribers. This month, I just recommended a second AI backdoor play. A company that most investors would never connect to artificial intelligence.
It’s an industrial gas giant. And every single AI chip manufactured in America requires its product to exist. Semiconductor fabs need ultra-high-purity gases to etch circuits onto silicon wafers. No gas, no chips. No chips, no AI.
This company dominates a three-player global oligopoly. It builds production plants directly on-site at customer facilities, locking them into 10-to-20-year contracts. And get this: It just announced its 33rd consecutive year of dividend increases. With the payout ratio sitting at a historically low 41%, the next dividend raise has room to accelerate.
My subscribers already own it. They’re positioned for what I believe are 15%+ annual total returns from a “boring” gas company that’s quietly powering the AI revolution.
These are what I call “Hidden Yield” stocks: companies with consistent dividend hikes, lagging stock prices, and share buyback programs that compound your returns from three directions at once. They’re recession-resistant, they pay you while you wait, and the dividend magnet pulls the share price higher over time.
I’ve identified five of these stocks set to deliver big, consistent returns for years to come—no matter what the market does. I’m sharing all five in an exclusive special report.
Click here to get my 5 favorite “recession-resistant” Hidden Yield stocks now.
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