3 Ways to Tap Rising Oil Prices for 8%+ Dividends

Our Archive

Search completed

If you’ve sat out oil stocks until now, it’s easy to think you missed the boat. After all, oil’s big run has sent shares of producers (and pipeline operators) soaring. That’s meant lower dividend yields—and higher valuations—for folks who decide to tiptoe in now.

But there’s a way we can “turn back the clock” and squeeze 8.1%, 8.7% and even 8.9% dividends out of energy stocks. (These are the actual yields on three overlooked funds I’ll show you in a moment.)

Those are the kinds of yields you could only get back in April 2020, in the teeth of the COVID crisis, when oil stocks were on their backs, their depressed prices sending their yields soaring.… Read more

Read More

Today we’re going to dive into two closed-end funds (CEFs) that have what everyone is on the hunt for these days—massive yields! Both pay more than 8% on average and tempt us with big upside, too, as they’re far cheaper than most other CEFs.

Let’s stop there for a second and talk a bit about CEFs: they’re a small group of funds known for their high yields (averaging around 6.8% across the board currently). They’re like ETFs in that they’re diversified, with each CEF typically buying hundreds of assets within a specific investment strategy.

Unlike ETFs, though, CEFs often trade for less than the actual market value of the assets inside the fund.… Read more

Read More

Historically, for whatever reason, stocks have made most of their gains between November 1 and May 1. (Hence the phrase “sell in May and go away.”)

I won’t bore you with the statistical details because they don’t matter for our purposes. Every year is unique, and we treat each as such. But, for our contrarian edge, it is helpful that the onset of fall provokes fear in the hearts of mainstream investors.

The S&P 500 is acting like it’s about to slip off a cliff. It’s been a year since the market’s last meaningful correction. We’re in the fragile half of the year and, seasonally speaking, September and October tend to be particularly weak.… Read more

Read More

Nice to see our friends over at Barron’s finally catching up to us on the big dividends sitting right under our noses in oil and gas!

It’s almost like the magazine’s writers are sharing a subscription to our Contrarian Income Report service, because the six stocks they cited in an article they ran last week are almost all picks in our portfolio—specifically our “crash ‘n rally” energy bucket.

(It’s not the first time’s Barron’s has shadowed us. In April, they put out a strategy for retiring on dividends, a subject we literally wrote the book on two years ago.)… Read more

Read More

As I write this, the 14 funds in our CEF Insider portfolio yield a tidy 6.7%, on average. And while that’s down from the 7.5% average (and above) we’ve seen in the past, there’s a good reason: big price gains! (Because prices and yields move in opposite directions, of course.)

And recently, we’ve locked in some of those big returns with timely sales. In our June 2021 CEF Insider issue, for example, we sold the PGIM High Yield Bond Fund (ISD), which we bought in late 2019 (a lifetime ago!) when it was trading at a 10.3% discount to net asset value (NAV).… Read more

Read More

“It’s my money, and I want it now!”

That’s the rallying cry of everyday folks in commercials for J.G. Wentworth, a financial services firm that offers lump-sum cash payments for structured settlements, annuities, lottery payments and more. (If you’ve never seen one of these TV spots, I suggest you try one out. They’re so bad they’re good.)

Every income investor could (and probably should) take a cue from its motto. To quote another spot: “Show us the money!”

Monthly dividend stocks, of course, pay more often than any other income investment. Dividend checks coming in every 30 days are especially handy for retirees who have bills to pay.… Read more

Read More

“Hey Brett… you joined two partnerships last year?”

What? I didn’t. Or I thought I didn’t. In reality, I did–by buying shares in not one but two master limited partnerships (MLPs).

One of them was Enterprise Products Partners (EPD) and while I can’t recall the other, I can vividly the annoyed look on my accountant’s face like it was yesterday.

Master limited partnerships (MLPs) are required to issue you a K-1 package at the end of the tax year. These are generally headaches for the person who does your taxes (whether it’s you, or a professional).

That year my accountant calmly but sternly asked me to stop buying MLPs in my personal portfolio.… Read more

Read More

Every so often, a CEF Insider subscriber asks if I see oil-related closed-end funds (CEFs) as solid income plays. You might be wondering the same, given the surge in oil prices—and oil stocks—since the start of 2019.

Today we’re going to answer that question. Along the way, we’ll uncover an energy CEF you need to steer clear of, no matter how you feel about oil.

Let’s start by making a quick run through history: what would have happened if you invested in energy CEFs over the last few years?


Source: CEF Insider

While the last three years have seen a decent average annualized return, and a negative return if you got in five years ago.… Read more

Read More

Every so often, a CEF Insider subscriber asks if I see oil-related closed-end funds (CEFs) as solid income plays. You might be wondering the same, given the surge in oil prices—and oil stocks—since the start of 2019.

Today we’re going to answer that question. Along the way, we’ll uncover an energy CEF you need to steer clear of, no matter how you feel about oil.

Let’s start by making a quick run through history: what would have happened if you invested in energy CEFs over the last few years?


Source: CEF Insider

While the last three years have seen a decent average annualized return, and a negative return if you got in five years ago.… Read more

Read More

Thanks to the December selloff, it’s relatively easy to find 9% yields. The stock market was a relentlessly receding tide in the fourth quarter, which is bad for “buy and hope” investors but quite helpful for income specialists like us.

Let’s look first at real estate investment trusts (REITs). Many now pay 9% – some good, some bad. The main index Vanguard Real Estate ETF (VNQ) has only paid this much (4.9%) twice before in the past ten years:

VNQ Is Rarely This Generous

By cherry picking the lot we can find 49 stocks paying 9% or more. But we should avoid names like Government Properties Income Trust (GOV), which frequently pops up on cute recession-proof dividend lists.… Read more

Read More

Categories