The Bears Are Betting Against These 6.9%-21.4% Dividends. Should We?

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These unloved stocks yield between 6.9% and 21.4%. These are big dividends, but not the main reason we are discussing this ignored five today.

Each of these names is so unliked by the Wall Street suits that they have serious upside potential.

How could that be?

These shares are heavily sold short.

Short selling is a way to bet against a stock. To do so, one must borrow the shares and sell them today. In hopes of buying back at a lower price tomorrow.

What happens if the stock goes up tomorrow? And rises the next day? And so on?… Read more

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Look, we’ve all loved watching our dividend payers rocket to the moon these past few weeks. Best part is, most of the market has been onboard: 

Everyone Wins in This “Close Your Eyes and Throw a Dart” Market

Here we can see the jump in the S&P 500 as a whole (in purple) versus its return on an equal-weight basis (in orange). Sure, there’s a bit of a gap, but safe to say this has been an across-the-board surge.

We can (in a backhanded way!) thank Jay Powell—just as he hinted that high Treasury yields were doing the Fed’s work for it, the bond market (figuratively) flipped him off … and Treasury yields plunged from 5% to around 4.6% now.… Read more

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Ten percent dividends are no joke.

We’re talking $50,000 in annual payout income on $500K. Or $100,000 in yearly dividends on a million dollars.

This is serious cash flow. And best of all, we’re talking yields—which means, if we buy right, we can sit tight, collect these payouts and keep our nest egg intact.

Generous yields give us a big advantage over vanilla investors, who fawn over traditional blue chips (paying 2% to 3%). That’s not enough. It’s easy math.

Let’s reference the million-dollar portfolio again. If we invest in the “broader market,” the S&P 500 yields 1.5%. It’s proxy, the SPDR S&P 500 ETF Trust (SPY), pays a meager $15,000 in annual income.… Read more

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The market’s reaction to Jay Powell’s “hawkish” Jackson Hole rant was interesting. He spoke for eight minutes. Stocks crashed for the rest of the trading session and have continued lower since.

Funny because I didn’t hear anything new. The mid-summer sucker’s rally was based on the hope that Powell would “pivot” early in 2023 and lower rates again.

He can’t unless the economy is really in the tank by then. Like “deep recession” bad. Otherwise, inflation is going to come back.

Larry Summers compared it to skimping on a doctor’s prescription. If you stop taking your antibiotics too soon, the infection comes back.… Read more

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The point of a bear market is to bring price-to-earnings (P/E) ratios back down to earth. Preferably into single digits.

I like P/Es under ten because it means that the company at least has a chance to pay us back within a decade. Give me a P/E of eight, a business I’m comfortable with and I’ll happily wait the eight years.

Bonus points if I can get paid to wait, which is where dividend stocks come in.

Thanks to this unfolding bear market, we finally have discounts in High Yieldland. We recently chatted about five cash flowing bargains, and here in just a minute, we’ll discuss another five.… Read more

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