When Bonds Take Off, These “Preferred” Payers (Up to 9.4%) Should, Too

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When Bonds Take Off, These “Preferred” Payers (Up to 9.4%) Should, Too

Is there anything better than a true bond bargain? I mean, feed me those monthly dividends with a side of price upside and I’ll never ask for anything more!

Gains from a bond fund? Yes, we contrarian income investors want it all. And we can have it when we buy funds yielding up to 9.4% at discounts up to 12%.

Mr. and Ms. Market are finally realizing that rates did not eclipse their 2023 highs. In fact, they appear to be putting in a lower high, which would be quite bullish for the bonds that Wall Street has been ironically panning all year:

Reality Check: Rates Still Lower Than Last Year

And what’s good for bonds is also good for one of my favorite income investments: the preferred stock.… Read more

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Buy This, Not That: 3 Preferred Funds Yielding 7%-9%

Is there still a chance to buy the bank dip? You bet—with nifty yields up to 9.4%!

We’re going to avoid the regional lenders, which pains me to say because I love banking with the small guys. But I’m not looking to own them as the economy slows down.

No, nothing personal, but I’ll take the banking behemoths. None of them yield 9.4%, of course, but we engineer these payouts easily via their preferred dividends.

Preferred stocks are often referred to as stock-bond “hybrids” given that they share some characteristics of each asset. A quick breakdown:

  • They represent ownership in a company (like a stock)
  • They typically don’t offer voting rights (like a bond)
  • They pay dividends (like a stock)
  • Their dividends are typically fixed at a certain level (like a bond)
  • They can rise and decline based on the performance of the underlying company (like a stock)
  • But they tend to be much more stable, trading around a “par value” like a bond)

Most noteworthy, for income fanatics like you and I, is that their dividends are plump.… Read more

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The Best “Preferred” 8%+ Dividends: Ours for 93 Cents on the Dollar

I hate to see folks trying to time this banking mess with regular stocks like JPMorgan Chase & Co. (JPM). Especially when they can easily swap their big-bank stocks for “preferred” dividends yielding 8% and up!

That’s a far sight better than the magic trick mainstream investors are attempting, as they try to dodge into big banks like JPM at just the right moment.

JPM Looks for a Bottom

Worse, JPM only yields 3% today. And you and I both know that markets can thrash around for weeks looking for a bottom.

That’s why, instead of squinting at price charts, we’re calmly picking up some sweet “backdoor” dividends from these very same banks, but with a yield that’s 173% bigger.… Read more

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Dumpster Diving for a Discarded (Yet Safe!) 8% Dividend

The Federal Reserve tightened until it broke something: the small banks. Classic Fed!

Meanwhile, here at Contrarian Outlook, we’ve been waiting patiently for a big buying opportunity. Biding our time. So… is this our moment?

Bank runs are textbook “blood in the streets” moments. There’s fear. There’s loathing. This is usually our cue to spring into action.

So, should we contrarians simply “hold our noses” and buy?

Regional bank stocks haven’t been this cheap since the summer of 2020. Sure, Silicon Valley Bank has gone to zero. But many small businesses, mine included, still prefer to bank with the folks down the street.… Read more

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How Big Do You “Prefer” Your Dividends? 7%? 8%?

Mere “common stocks” fell 18% in last year. But these preferred shares are set to do better. Especially for contrarian income seekers like us.

I’m talking about safe 7% to 8% yields. Backed by good old fashioned cash flows. With double-digit price upside, too, as these share prices bounce back after a rough run.

A quick primer if you’re new to preferred stocks. They are part stock, part bond—and all yield, as we’ll see in a minute.

Preferred stocks trade around a par value and deliver a fixed amount of regular income, just like a bond. They don’t have any voting rights, which also is like a bond.… Read more

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Fade the Market Roller Coaster With These Cool 6.7%-7.5% Yields

“America’s retirement fund” is looking awfully shaky. Income investors should consider replacing the over-owned S&P 500 index fund with these underappreciated yields up to 7.5%.

The S&P 500 has face-planted right out of 2022’s starting gate, flirting with a correction (that’s a decline of 10% or more) less than a month into the year.

If you’re retired, or thinking about retirement, these drawbacks are costly. They can erase years of hard work in a few bad trading sessions.

This is why we contrarians, who focus on cash flow, lean on “preferred” stocks, instead. These are special classes of shares issued by the same blue-chip firms in the S&P 500.… Read more

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These “Preferred” Blue-Chip Stocks Yield Up to 6.9%

Preferred stocks are the little-known answer to the dividend question:

How do I juice meaningful 5% to 6% yields from my favorite blue-chip stocks?

“Common” blue chips stocks usually don’t pay 5% to 6%. Heck, the S&P 500’s current yield, at just 1.3%, is its lowest in decades.

But we can consider the exact same 505 companies in the popular index—names like JPMorgan Chase (JPM), Broadcom (AVGO) and NextEra Energy (NEE)—and find yields from 4.2% to 6.9%.

If we’re talking about a million dollar retirement portfolio, this is the difference between $13,000 in annual dividend income and $42,000. Or, better yet, $69,000 per year with my top recommendation.… Read more

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Earn 6.6% Without Ever Sweating the Fed Again

The market isn’t doing fixed-income investors any favors right now. But one of my favorite funds—in one of the best cash flow niches in the market—is delivering a gaudy 6.6% yield at today’s prices.

And it does that by holding some of Wall Street’s most boring, stable and dependable securities.

How can we bank this 6.6% “free lunch” when 10-year Treasuries still pay less than 2%? By tapping into an income stream that most individual investors rarely think about: Preferreds.

The Power of Preferreds

If we wanted to own a piece of a company, say JPMorgan Chase (JPM), we’d go out and buy a few shares of JPM.… Read more

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These “Preferred” 8% Dividends Get Us Into Wall Street’s VIP Lounge

This GameStop madness is a clear and present danger to our dividends.

Let’s stop and look at exactly what it means for our income streams, and what we’re going to buy to protect ourselves (and cash in with monthly payouts up to 8%!)

When the Dumb Money Runs, We Need to Be Careful

The whipsawing shares of GameStop (GME), AMC Entertainment Holdings and others are classic cases of “dumb money” in action: they’re among the many short squeezes breaking out across the market—where short sellers, including hedge funds, betting against a stock lose big as buyers bid the stock up in an effort to “stick it to the suits.”… Read more

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The Beautiful, Boring Secret to Landing 7% Dividends

As Wall Street loses its mind over a long bond that pays a lousy 1%, we level-headed income investors are going to stay calm. And 7.7% on.

Yes, we “prefer” (hint, hint) dividends that are 7X the weak 1% yield the wonks are clamoring about. I’ll get to the specifics on these retirement makers—which we can buy as easily as common stocks—in a moment. First, let’s appreciate their dividend grandeur.

The Fed is content to sit on a near-zero benchmark rate until at least next year if not 2023. Compounding the problem is that yields on traditional blue chips, while always insufficient, are a downright mockery right now—the 1.55% current yield on the S&P 500 is its lowest point in 15 years.… Read more

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