Analysts Say to Sell These 6.3%-12.6% Dividends, But…

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Analysts Say to Sell These 6.3%-12.6% Dividends, But…

Vanilla investors buy stocks that Wall Street approves of.

Why?

If a stock is showered with Buy ratings, then who is left to bid the price even higher? Nobody!

This lame “strategy” feels good but ends up with latecomers top ticking the market. Which is why we contrarians aim differently—for the bottom of the barrel.

Give us stocks with Sell ratings. Which often means there’s nobody left to sell!

Today we’ll discuss a pack of discarded dividend stocks paying up to 12.6%. Not only are these yields real, and spectacular, they have price upside potential to boot.

After all, a stock slathered with Sell labels has nothing but upgrades in its future.… Read more

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Wall Street Hates These 7 High Yields. Should You?

Most vanilla investors like to buy stocks that are well-liked by Wall Street analysts.

This strategy, my contrarian friend, we know is a recipe for disaster.

Why? Well, firms that are already popular with stock jocks have nowhere to go but down. Discarded names, on the other hand, are where the action is because these are the next “analyst upgrade” candidates.

These prices have little downside and lots of upside!

It is difficult to find these out-of-favor plays because most analysts wear rose-colored glasses. They know how their bread gets buttered, and that’s with a bullish outlook.

Which is why a Sell rating is so darned interesting to us.… Read more

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2 Cheap 11.2% Dividend Stocks and 1 Paying “Just” 9.5%

Today we’ll discuss a duo of cheap dividend stocks paying 11.2%. And, for good measure, we’ll throw in another bargain even though it “only” yields 9.5%.

I jest because I love. Dividends, that is. And bear markets don’t usually last much longer than this. So, it is double-digit yield shopping we go.

These are serious yields we’re looking at—the kind we need to retire on dividends alone. They’re hard to find among over-followed, over-analyzed and over-owned blue-chip stocks. But they’re abundant in BDCland (populated by business development companies (BDCs), of course).

Like real estate investment trusts (REITs), business development companies are a creation of Congress.… Read more

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A Nearly 13% Portfolio Yield, Paid Monthly? Come On.

Patience is the key to being a successful contrarian investor.

We buy when fear is widespread. Bear markets are our friends. Let’s sit back and let the market’s valuations come down to us.

I wrote very recently that the market is this close to sending out a market-wide buy signal. Let’s get ready to back up the truck.

Today, we’ll discuss targets for retirement income yielding a ludicrous 12.9%—after all, a self-sustaining portfolio that allows you to live off dividends alone can give you enormous peace of mind once you’re past your working years.

And if those dividends land in your mailbox or account every 30 days or so, matching your monthly bills…well, that’s even better.… Read more

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3 BDCs Yielding Up to 8.3%: 2 Duds, 1 Stud

Since traditional banks have backed off on business lending over the years, BDCs (business development companies) have stepped in. They provided much-needed debt, equity, and other financial solutions to small businesses—and much-needed income to dividend investors.

As an asset class, BDCs yield 8%. We’ll discuss three popular payers—with dividends up to 8.3%—in a moment.

Congress whipped up BDCs with a few pen strokes in 1980, creating a structure that’s incentivized to provide smaller companies with financing. BDCs receive special tax privileges, and in exchange, they must return at least 90% of their taxable profits to shareholders as dividends.

If that sounds familiar, that’s because that same tradeoff is enjoyed by real estate investment trusts (REITs), which were formed the same way, 20 years prior.… Read more

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5 Gaudy, Garish Dividends You Can’t Help But Gawk At

What if I told you that, even in this expensive stock market, that we can still find yields of 9%, 10%… heck, even 20%?

Volatility is back, and with it, some discounted stocks with generous yields that we can snag. We’ll talk big dividends up to 20% today.

An S&P 500 index fund, as usual, won’t pay you enough income to retire. You have to buy the pricey basket and hope it’ll keep levitating higher. A purchase of the popular index today and you’ll barely squeeze out $18,000 in dividends by this time next year. That’s not much but it’s downright lavish compared with the $6,700 you’d eke out of a 10-year T-note.… Read more

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8 Dividend Dumpster Fires to Sell Right Now

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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This 12.1% Payout is Trash (But This 6.3% Yield is Safe, With Upside)

Most income investors find their way to business development companies (BDCs) by screening or searching for big yields. And there’s no doubt these listed payouts do appear impressive! Here are the five largest BDCs (ranked by assets under management):

A first-level look at this table may have you wondering why anyone would buy MAIN when they could nearly double their dividend by choosing another ticker. Well, there’s a good reason that we’ll get to in a minute. First, let’s talk about what BDCs actually do so that we can understand what is driving these big dividends.

It all started in 1940, when Congress passed the Investment Company Act.… Read more

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This 14.2% Yield is Too Good to Be True (But This 9.5% Payout Isn’t!)

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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These 1-Click “Tax Loopholes” Yield Up to 9.8%

If pricey stocks and low dividend yields have you frustrated, it’s time to consider publicly traded (and perfectly legal) “tax loopholes” that yield up to 9.8%. They’re as easy to buy as any stock or fund – in fact, they are stocks. They just happen to pay more.

Private equity investing is a proven way to print money. Problem is, it’s typically expensive for individual investors like you and me to get involved. Private equity minimums range anywhere from $10 million at the high end to “just” $250,000 depending on the fund. Frankly, that’s more than most normal retirement investors can or even should put in any one investment.… Read more

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