2 Big Dividend Blunders Everyone Makes (and how we’ll tap them for payouts up to 12.7%)

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There is a proven way to grab sturdy double-digit dividends in this income-starved market.

Today we’re going to follow it. The secret? Take a contrarian approach to a group of stocks most folks have (wrongly) soured on. Those stocks would be real estate investment trusts (REITs), which yield just over 4%, on average, putting the 1.7% paid by the typical S&P 500 stock to shame.

And if you make the simple move I’ll show you shortly, you could easily triple that 4% payout! You’ll give yourself a solid chance of beating the typical REIT investor’s returns, too.

I’ll give you names and tickers in a minute, but let’s talk first about an obvious trap most investors are falling into with REITs these days.… Read more

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We’ve just been handed a unique opportunity to grab 7.9%+ dividends—and price upside, too.

Now it does involve some risk, and you’ll have to be quick to reap the biggest gains (and dividends). But there’s one unsung fund that can help you cancel out that risk—and grab a huge payout, too. More on that at the end of this article.

A Contrarian High-Yield REIT Strategy for Huge Cash Payouts

First up, the opportunity we’re going to dive into today revolves around real estate investment trusts (REITs) that invest in shopping malls and other retail properties.

If you’ve been reading columns written by me and my colleague Brett Owens, you know we’ve been critical of retail REITs, which were being decimated by Amazon.comRead more

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It really is possible to find stocks that grow your money 15%+ a year forever—even in the middle of a pandemic.

Better still, these “unicorns” are a cinch to find. We only need to look for one thing: a dividend that’s growing—and ideally accelerating.

I know that sounds like a tall order, with S&P 500 payouts plunging $42.5 billion in the second quarter. But that figure masks the fact that many companies are still hiking their payouts—and will continue to, even if this crisis drags on longer than we expect.

Dividend Growth = Share-Price Growth

Of course, it’s not good enough to simply pick a few stocks with fast payout growth and call it a day.… Read more

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Almost One-Third of NYC Restaurants Missed June Rent, Survey Finds

Scan the business headlines (and let’s be honest, who actually reads anymore?) and we’ll see ominous headlines like this. Makes us wonder who would want to be a landlord in this economy?

It’s not just NYC. Here in California, most restaurants are, once again, not allowed to offer indoor dining. Epidemiology arguments aside, our beat here is money, and how many restaurants are supposed to make money right now I do not know.

If they’re not making money, who knows if they’re paying the rent. Taking that a step further, we might also question who wants to own any real estate investment trusts (REITs)?… Read more

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In normal times, real estate investment trusts (REITs) are a great way to cut your portfolio’s volatility—and double the income you’d get from regular stocks.

Of course there’s nothing typical about 2020, but this “new normal” actually presents an especially excellent opportunity to buy select REITs on the cheap. I’m talking about cash cows with rent flows that were not disrupted by shutdowns.

Cheap stocks with higher-than-usual yields and bulletproof cash flows? Read on and we’ll sign up for this deal together.

REITs, remember, are “no drama” pass-through investments: they collect the rent on their properties, take out enough to keep their buildings in good working order, then pass (almost all of) the remaining cash to you as dividends.… Read more

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This crisis has caused a lot of folks to develop a crippling fear when it comes to REITs: they see the beating mall owners like Simon Property Group (SPG) have taken and swear REITs off for good. 

To be sure, SPG took it on the chin in March, and has not gotten up:

Simon’s Business Model: Broken for Good

But way too many people think REITs are about shopping malls, and that’s about it. It’s too bad, because this first-level thinking causes them to miss out on a lot of upside—and dividend growth, too.

Beyond the Mall

Members of my Hidden Yields service know better: we wanted nothing to do with mall landlords before this crisis, because Amazon.comRead more

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“Brett, I didn’t sell (insert dividend stock here) in March. Should I hold my nose and sell now?”

If you sat on your hands during the March drop and subsequent bounce, you’re not alone. Many of your fellow income investors are still holding on to positions that they know they should probably sell, but haven’t yet. (I know this because I’ve heard this question from a number of you!)

Well, here’s the question I would ask you about the position:

“Is the business going to rebound to pre-pandemic levels any time soon?”

If the answer is “no” then why would you not sell the stock?… Read more

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Bear markets can be painful, but they also create “once-in-a-decade” buying opportunities for dividend investors. For example, there are four big names yielding between 9.9% and 15.9% that are literally the leaders in their respective industries. (We’ll review them shortly.)

Bull markets simply don’t boast yields anywhere this high. And double-digit yields can drastically change a retirement game plan.

I’ve complained for years that, if you had a million bucks to plunk down on blue chips and bonds, you’d only be able to wring out about $20,000 to $30,000 in dividends and interest each year. But right now, you can take a nest egg half that size, and generate anywhere between $49,500 to $79,500 annually in dividend cash.… Read more

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Landlords and lenders have taken it on the chin since the world shut down. And until this place is actually open for business once again, many REIT (real estate investment trust) investors are unfortunately rolling the dice on the next rent payment coming in, the next commercial mortgage payment being made.

To be fair, however, select REITs are going to be OK, and many of them are selling at bargain prices right now. In the short run, REIT prices can move together (for example, drop when the 10-year Treasury yield rises). However, as weeks turn into months and years, we usually see a great variation in the performance of REIT stocks.… Read more

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If you own any real estate investment trusts (REITs), make sure you forward this article along to your tax advisor!

Historically, REIT distributions have been considered nonqualified dividends by the IRS. This means they usually get taxed at your regular income tax rate.

However, REIT investors now benefit from the same tax break that “pass through” businesses receive. As a general rule, REIT investors are now allowed to deduct 20% of their REIT dividend income.

(This tax update is adapted from our new book How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact. You can grab your copy here.)… Read more

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