Why Buy “Broke” Blue Chips? These 5 Small Caps Pay up to 17%

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Why Buy “Broke” Blue Chips? These 5 Small Caps Pay up to 17%

Small-cap stocks haven’t been this cheap in decades. This valuation advantage gets interesting when we add big fat dividends and today, we’ll discuss five cheap small stocks yielding between 8.3% and 17.1%. (That’s no typo by the way—we only talk serious dividends here at Contrarian Outlook!)

The Apples, Google and Microsofts of the world are priced like luxury goods. Smaller stocks, meanwhile, have been left at the discount rack. Let’s shop:

  • S&P 500: 21.2 times earnings (pricey!)
  • S&P MidCap 400: 15.4 times (better…)
  • S&P SmallCap 600: 14.7 times (bingo!)

The valuation spread between the S&P 500 and S&P 600 hasn’t been this wide since Bill Clinton was wondering whether dot-com was one word or two.… Read more

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Tiny Stocks, Tremendous Yields: 5 Small Caps Yielding up to 13.8%

Small-cap stocks are on sale. We can buy select names for just 8.8 times earnings and 83% of book value.

Large cap stocks rarely sell this cheap. That is the problem with popularity! Which is why we’re looking small but thinking big, eyeing payouts between 7.3% and 13.8%.

(Those dividends are no typos. The beauty of being nimble individual investors means we can fish in these small but potentially lucrative ponds.)

Now small cap stocks aren’t always this cheap. Traditionally, smaller firms trade at a premium to their large-cap counterparts given their outsized upside potential. But today, small caps are less expensive by just about every valuation measure.… Read more

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These 10%+ Yields are Mystery Meats – Avoid!

Hey kid, want some candy?

Don’t worry about the wrapper. It, um, came like that.

No? No candy for you? You’re sure?

OK fine. Maybe you’re not hungry, but how about this 31% dividend?

Don’t worry. The stock made its last dividend payment of $0.27 just fine.

No? No 31% yield for you? You’re sure?

OK fine. And, honestly, smart move. I would imagine that January dividend payment is the last one we ever see from First Republic Bank (FRC).

Fundamentally, FRC (and other banks, for this matter) are flawed, perhaps fatally so. They are not paying competitive rates.… Read more

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Should We Own These 11 Dividends Over 7%? No, No, No

Sell ‘em if you got ‘em.

And c’mon, we all have ‘em.

Let’s think back a few months. Which stocks are we still holding now that we wish we had sold then?

I’m talking about the dividend dogs that, if we’re being honest, are not deserving of long-term positions in our retirement portfolios.

These mutts have had a fun summer—good for them (and us). Now let’s find them a nice home in another portfolio.

Why the deadline? September swoons are common. The Wall Street guys return from their Hampton homes and sell everything that rallied in August.

The summer rally (recently ended?)… Read more

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