4 Market-Shattering Yields: 2 Contenders, 2 Pretenders

Our Archive

Search completed

The Contrary Investing Report > NYSE:MO

A blue-chip dividend portfolio pays about 2% today. Put a million bucks into a bucket of these stocks and you’ll bank just $20,000 in yearly dividends. That’s barely extra change–on a million invested!

There’s a better way. I prefer to focus on stocks and funds that simply aren’t as familiar as the big names to most investors. They do offer growth potential. But most importantly, they don’t sacrifice yield for perceived safety. In fact, they yield roughly 3x to 4x the blue-chip stocks, providing a lot more retirement-income cushion in years where the market stalls.

Most people love the idea of this Perfect Income Portfolio, yet millions of retirees across the country find themselves piled into the same group of overowned, overpriced blue chips because the “traditional wisdom” says that’s what retirement is supposed to look like.… Read more

Read More

Sometimes investors forget that dividends are funded by actual cash flows.

Consider General Electric (GE), whose outsized yield tempted investors to mistakenly buy shares in this “blue chip” as disaster was unfolding. The stock losses started well before the actual dividend cut and continued on from there:

(Accounting) Imagination at Work

This focus on yield rather than cash happens too often. It’s what prompted me to warn readers about the sky-high yield of Frontier Communications (FTR) a year ahead of its 2017 cut:

A Broken Telecom (and Broken Dividend)

The “not enough cash” problem also prompted me to sound the alarm on L Brands (LB) several times ahead of its 50% dividend cut in late 2018.… Read more

Read More

Almost every corner of the market is overpriced today. That includes dividend stocks, which cost too much and yield too little.

The S&P 500 is at multi-year highs in almost every valuation metric: P/E, P/B, P/S … you name it. And a lot of that froth is coming from traditional income sectors. Yardeni Research’s latest sector study shows that utility stocks, for instance, trade at 18 times estimates, at the very high end of its 10-year range. The sector’s typically high yields, meanwhile, have dried up to a mere 3%.

Hey! Where’d the Dividends Go?

The real estate industry is getting pricey, too, with the iShares U.S.Read more

Read More

Almost every corner of the market is overpriced today. That includes dividend stocks, which cost too much and yield too little.

The S&P 500 is at multi-year highs in almost every valuation metric: P/E, P/B, P/S … you name it. And a lot of that froth is coming from traditional income sectors. Yardeni Research’s latest sector study shows that utility stocks, for instance, trade at 18 times estimates, at the very high end of its 10-year range. The sector’s typically high yields, meanwhile, have dried up to a mere 3%.

Hey! Where’d the Dividends Go?

The real estate industry is getting pricey, too, with the iShares U.S.Read more

Read More

Stock-market selloffs provide great times to buy big dividends. 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 consider high-quality real estate investment trust W.P. Carey (WPC). This REIT looks good at most prices, but the market gave us an exaggerated dip in December-early January that spiked its yield to nearly 6.5%. Savvy, patient investors who bought on this dip (like my Contrarian Income Report subscribers) didn’t just enjoy an excellent yield on the higher end of its five-year range – they also are sitting on 17% gains in just a matter of weeks!… Read more

Read More

What if I told you there’s a way you can buy your favorite blue chips and get a dividend 5 times bigger than what your typical S&P 500 name pays today?

Let’s be honest: with an income stream like that, backed by popular names like cigarette maker Altria Group (MO), telco Verizon (VZ) and even Google, now known as Alphabet (GOOGL)—more on these three stocks below—you’d leap at the chance, right?

The truth is, you’d be crazy not to.

Well, now you can. And today I’m going to show you exactly how to do it—and 1 fund yielding 9.8% to get you there instantly.… Read more

Read More

Is it possible to double your money – quickly – buying safe dividend stocks? You bet. Let me explain how…

“Basic” income investors are enamored with higher current yields. These are OK for payouts today, but they’re not going to get us 100%+ gains.

For triple-digit profits we must pay attention to the underrated dividend hike. These raises not only increase the yield on your initial investment, but they trigger stock price increases, too.

For example, if a stock pays a 3% current yield and then hikes its payout by 10%, it’s unlikely that its stock price will stagnate for long.…
Read more

Read More

Lazy financial writers like to say that higher bond yields will hurt dividend stocks. This blanket statement may sound reasonable, but it’ll cost you money if you take it at face value.

Pundits have called sleepy dividend stocks like General Mills (GIS) “bond proxies” in recent years. GIS has paid 3% (more or less) over the last three years. That compared favorably with the 10-year note, which paid 2% (more or less) over that time period.

So, the story goes, investors had been buying stocks like GIS instead of safe bonds like Treasuries to scrape an extra 1% or so. But with Treasuries rallying to 3%, these same investors have “demanded” a higher yield from GIS.…
Read more

Read More

One down, two to go.

The Federal Reserve launched yet another interest-rate hike after its mid-March policy meeting – the sixth such increase since December 2016, and what the Fed anticipates will be the first of three this year. Predictably, a certain subset of the market shuddered in response: lazy, low-growth dividend stocks. But at the same time, shareholders of a few other stocks quietly celebrated what should be a win for the years ahead.

Today, I want to highlight both types: The Fed-proof, and the Fed-frightened.

2018 isn’t shaping up to be a bad year for dividend growth, but it’s not a particularly good one.…
Read more

Read More

Back in February 2016, I wrote an article titled “4 Reasons to Buy This 9.2% Yielding Equity Fund”. That fund was the AGIC Equity and Convertible Income Fund (NIE).

Since then, NIE has done this:

Almost 50% Gains in a Year and a Half

Oh, and did I mention that NIE pays a 7.4% dividend? That’s right: $100,000 in this fund gives you $616 per month in cash.

Despite the conventional wisdom about dividend yields, that high yield doesn’t come with high risks. Not only has NIE been growing its dividend since 2009, but that income stream is well covered by the fund’s investments—again, thanks to its big returns, as we see in the chart above.…
Read more

Read More

Categories