Value-Priced Income Stocks Yielding Up to 9%

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Thank you, bear market. Thanks to a terrible 2022, we have four dirt-cheap dividend payers dishing up to 9%.

These are cash cows I’m talking about. Companies that gush free cash flow and shovel it back to us in the form of big yields.

Earnings are accounting numbers. Cash flow is real life.

And it’s not out of deals, either—in fact, over the past few days, I’ve kept increasingly close watch over a four-pack of cash cows with high yields of up to 9% and deliciously low prices.

But given a still-dangerous market environment, we need to focus on quality.… Read more

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Nobody’s perfect. And in 2022, it’s particularly hard to pretend that you never make a losing trade as the market has been incredibly volatile through no fault of our own.

That said, there’s the old saying that the definition of insanity is doing something over and over but expecting different results. So if you have a habit of making bad trades, maybe the bigger problem isn’t the stock market… but your strategy.

One particularly risky strategy that I see some income investors cling to is the notion of placing a priority on yield above everything else. And like Captain Renault, these investors always seem to be shocked – shocked!… Read more

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Once upon a time, it was hard to find an income strategy much better than the idiot-proof “Dogs of the Dow.”

And hey, in this wild market in which the S&P can drop 2% in a couple of hours, this sounds pretty good. Let’s buy some blue chips and earn 3x more income than the broader market.

Which Dogs are paying the biggest dividends for 2022? As a group these battleship businesses are paying 3.8% versus just 1.2% for the broader market. We’ll review them in a moment. First, the Dogs of the Dow rules:

  • Rule 1: After the final trading day of the year, identify the 10 highest-yielding stocks in the Dow.

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Markets took a dive (then posted a lightning-fast recovery) last week, a return to volatility that’s a good reminder to cast an eye over our dividend portfolios.

One thing to pay particular attention to is the amount of cash you’re holding. Because if you’re like many investors I’ve talked to recently, you’re holding too much of it—and that can cause a steady wealth drain that bleeds away thousands in returns every year!

Taking Money Off the Table—at Exactly the Wrong Time

Of course, having a healthy cash cushion is always a good thing. The trouble for most folks, though, is that they’ve been growing the amount of cash they have outside the market just as stocks have taken off.… Read more

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For income investors, dividend strategies don’t come any easier than the “Dogs of the Dow.”

But does this simple technique still work?

We’ll look at the 2021 Dogs, and their attached dividends (and prospects) in a moment. Their yields aren’t too shabby, averaging 4.1% in a 1% world! First, let’s review the mechanics of the popular contrarian strategy:

  • Step 1: After the final trading day of the year, we identify the 10 highest-yielding stocks in the Dow.
  • Step 2: We buy all 10 in equal amounts.

That’s it. In just a couple of quick steps, executed just once every year, we can put together a mini-portfolio of 10 blue-chip stocks that typically out-yield the S&P 500, and currently offer 2.5 times more dividends than the broad market index.… Read more

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Successful dividend investing can actually be pretty simple. Don’t trade for years, perhaps for a full decade, and then buy super high-quality dividend stocks at bargain basement prices.

One set of trades every decade. Not bad.

It’s the way of the world. There’s always something brewing. From the “original crash” of modern times, 1987, to the tech bubble bursting in 2000 or the financial world nearly collapsing in 2008.

Now, it’s 2020, and the world is again ending. We’ll make it to the other side, of course, but between here and there we are going to have a fantastic opportunity to buy blue-chip dividends.… Read more

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The New Year is here, which means it’s once again time to revisit a contrarian (and income) investing tradition: The “Dogs of the Dow.”

This simple yet famous dividend strategy involves buying the 10 highest yielders in the 30-component Dow Jones Industrial Average at the beginning of each year.

It’s an income play, sure, but this strategy also has to do with value. The idea: Truly strong blue-chip stocks rarely become “obsolete,” so high yields—often driven by lower prices in the prior year—are just a signal that the stocks are oversold and due to bounce back.

It’s a win-win, in theory.… Read more

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The Nasdaq Composite and S&P 500 indexes set new record highs on Tuesday, as first-quarter earnings continued to exceed low expectations this week. The rally this week completed a sharp 25% comeback in the S&P 500 that started when U.S. markets bottomed during the last week of December.

There was strong economic data reported in the U.S. this week, highlighted by a blowout first-quarter GDP reading on Friday. We experienced 3.2% growth in the domestic economy last quarter, which smashed the estimate of 2.5%.

New home sales were another beacon of light on Tuesday, showing a 3% increase for March. The print exceeded expectations and marked the highest level in 17 months.… Read more

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The broader stock market averages digested recent gains this week, as trading activity was shortened by the Martin Luther King Jr. holiday on Monday.

Trade talks with China appear to have reached a stalemate, as U.S. Commerce Secretary Wilbur Ross said on Thursday that the two sides were “miles and miles” apart from settling trade issues. Back at home, the Federal government shutdown found a temporary solution on Friday. The deal re-opens government operations through Feb. 15, as Congress and the White House will continue to discuss border security.

Earnings Season in Full Force

Despite the holiday, it was a busy week for earnings.… Read more

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If you’re not yet as rich as you hoped you’d be by now, don’t worry – we still have plenty of time to get you there.

And I’m not talking about investing your “growth capital” into risky fly-by-night names like Tesla (TSLA) and Snap (SNAP).

We can scale our money more securely – but just as spectacularly – by purchasing sound dividend payers that happen to be growing their payouts rapidly. Here’s why.

The Most Lucrative Way Shareholders Get Paid

There are three – and only three – ways a company’s stock can pay us:

  1. A cash dividend.
  2. A dividend hike.

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