The Secret to 107% Dividend-Powered Returns by December

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This time last week, we talked about my favorite dividend stock for 2021. The stock yielded 6% as recently as June, but it (deservedly) gained a following among income investors in recent months.

These newcomers bid its price up (again, deservedly). In doing so, its yield shrank below 4%, and I recently found myself apologizing to my Contrarian Income Report subscribers for discussing a stock that paid so little by our admittedly lofty standards.

Well, I’m glad I brought it up to them and to you in these pages last week, because Synovus (SNV) soared 11% over the next three days.… Read more

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Exactly who is retiring on the income from safe bonds in 2021?

You might remember when, once upon a time, the 10-year Treasury was a source of acceptable retirement yield:

  • Thirty years ago, we could get 7% or more for sitting on high-quality U.S. debt,
  • Twenty years ago, we could still gather 6%,
  • Even a decade ago, we were pocketing a respectable 4%.

Today? We can’t even collect a lousy 1% yield!

Buying Treasury Bonds? Congrats—You’re Broke!

Put a million bucks into 10-year Treasuries and we’re banking just $9,500 per year in income. That’s below poverty levels. Yikes.

Things aren’t any better on the stock side.… Read more

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Stocks are up, the economy is in shambles and lockdowns are making a comeback. But people are also being vaccinated as I write this, just 12 months after we learned that COVID-19 was even a thing.

How do we invest through this transitional market? I’ve got a three-point plan for you that works in any economy—not just the Twilight Zone one we’re living in now.

Step 1: Start With “Tollbooth Stocks” and Build From There

Tollbooth stocks are the kinds of companies we safety-conscious dividend investors love: they hold the infrastructure—think pipelines, warehouses and data networks—big players like, say, Amazon.com (AMZN) must have to operate.… Read more

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Stocks are up, the economy is in shambles and lockdowns are making a comeback. But people are also being vaccinated as I write this, just 12 months after we learned that COVID-19 was even a thing.

How do we invest through this transitional market? I’ve got a three-point plan for you that works in any economy—not just the Twilight Zone one we’re living in now.

Step 1: Start With “Tollbooth Stocks” and Build From There

Tollbooth stocks are the kinds of companies we safety-conscious dividend investors love: they hold the infrastructure—think pipelines, warehouses and data networks—big players like, say, Amazon.com (AMZN) must have to operate.… Read more

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The market’s fall pullback is starting to reverse itself, but don’t worry: there are still bargain dividend payers yielding 7.4%+ dividends to be had out there.

But investing (along with everything in our lives!) has changed. You simply won’t get safe, high payouts by clutching to old habits and buying big-name, high-yielding S&P 500 stocks. The real dividend bargains are in closed-end funds (CEFs), which give you higher payouts, greater safety and often better returns over the long haul.

To show you what I mean, let’s line up three S&P 500 “dividend darlings” against the CEF competition and see how they compare.… Read more

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Election chaos—especially after Friday’s bombshell—could be a knockout blow for this market bounce. I’m worried. And going by our Contrarian Outlook mailbag, plenty of readers are, too.

A typical question goes like this: “Brett, what should I buy/hold/sell if X/Y/Z happens after November 3?”

Now we have to add the president’s positive coronavirus test into the mix!

Rest easy—I’ve got you covered. Today we’re going to talk about two stocks you could hold through 2021, 2022, 2023, and beyond. These companies’ current dividends are much higher than the S&P 500 average. But the real story is their dividend growth, which will triple up your income stream in short order.… Read more

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Be careful with conventional “wisdom”—especially when it comes to dividend investing. Some investors are so scared of a payout cut that they chase too-popular yields and watch their money grind sideways for years on end.

This safety trap is especially tempting in 2020, with dividend cuts happening left and right. We’ve had 639 publicly traded US companies reduce or eliminate their payouts in the second quarter alone, according to S&P Dow Jones Indices.

If you’ve been burned by a payout cut this year, the small consolation is you’re far from alone. Many folks were caught off guard when big names like Ford (F), Wells Fargo (WFC) and senior-care REIT Welltower (WELL) slashed or ceased their dividends.… Read more

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If you’re like many investors these days, you’re warily eyeing your portfolio, wondering where the next dividend cut will come from.

Fear of dividend cuts is reasonable, even if you hold the Dividend Aristocrats—the 63 S&P 500 firms that have raised their payouts for 25 years (or more). This club includes well-known names like McDonald’s (MCD), Lowe’s (LOW), Kimberly-Clark (KMB) and Procter & Gamble (PG), as well as less familiar firms, like Sysco (SYY), VF Corporation (VFC) and Linde (LIN).

For many folks, the Aristocrats are sacred cows. But the crisis will inevitably force some of these companies to cut payouts in the weeks and months ahead.… Read more

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If you have cash to deploy in this market, you’re in luck: dividend yields on some top-name stocks are scraping historic highs. And these same stocks are often so oversold they’re primed for big upside, too.

The obvious question follows: how do you find these income-and-growth plays? Let’s dive into a two-step “screen” that does just that. It starts with the lifeblood of share prices (and dividends): corporate earnings.

Unfortunately, growing profits are getting rarer these days. Look at this chart from FactSet, showing projected earnings for the just-completed first quarter, as more S&P 500 firms report:

Earnings Drop, But Look to the Left

So far, it appears that most companies will see earnings declines in the first quarter of 2020, but when we take the market apart sector by sector, we see that there are a few sectors, like consumer staples, utilities and health care, showing rising earnings—and in the case of utilities and telecoms, significant earnings gains.Read more

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In normal times, we contrarians are stuck combing the market’s backwaters—REITs, closed-end funds (CEFs) and the like—in our hunt for outsized dividends.

But, of course, these are not normal times.

This crisis has flipped the script. Now we can get the same big payouts but with much less work. In fact, we can get them from the same stocks you’ll find in any American’s portfolio! This is a once-in-a-generation opportunity, and it can’t last.

Fishing Close to Shore

The last time I saw a situation like this was in March 2009, days before the S&P 500 bottomed in the financial crisis.… Read more

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