This 20.1% Yield is Too Good to Be True (But This 11.8% Payout Isn’t!)

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The Contrary Investing Report > NYSE:NRZ

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 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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Groucho Marx famously said: “I refuse to join any club that would have me as a member.”

When it comes to dividends, the 10% Club isn’t usually a badge of honor either. That’s because bigger isn’t usually better when you’re talking about dividend yields.

The FOMC has targeted short-term rates of between 1.75% to 2.00% in the U.S. and the yield on the benchmark 10-year note is hovering around 3%. Almost any other income investment can be priced based off these rates, depending on how much extra risk you’re willing to take on.

Historically-speaking, any time a stock is paying more than seven percentage points above the AAA-rated, government-secured debt, investors begin to question if the dividend is sustainable.…
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With great yield comes great risk.

A double-digit yielder is a pretty rare thing. Among the 7,000 or so stocks, exchange-traded funds and closed-end funds on the market, a relative handful (135) dole out 10% or more in annual income. And because sky-high yields are often the product of tanking share prices or excessive risk, many of them are traps – and only a select few are worth considering. Today, I’m going to show you a trio of stocks that yield more than 12% and have earned a closer examination.

But first, let me show you just how rough it is for the big-income club.…
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