3 Ways to Tap Rising Oil Prices for 8%+ Dividends

Our Archive

Search completed

If you’ve sat out oil stocks until now, it’s easy to think you missed the boat. After all, oil’s big run has sent shares of producers (and pipeline operators) soaring. That’s meant lower dividend yields—and higher valuations—for folks who decide to tiptoe in now.

But there’s a way we can “turn back the clock” and squeeze 8.1%, 8.7% and even 8.9% dividends out of energy stocks. (These are the actual yields on three overlooked funds I’ll show you in a moment.)

Those are the kinds of yields you could only get back in April 2020, in the teeth of the COVID crisis, when oil stocks were on their backs, their depressed prices sending their yields soaring.… Read more

Read More

Nearly two years ago, our Contrarian Income Report service picked up cheap oil dividends that, at the time, yielded nearly 11.8%. With oil trading at negative prices (meaning producers were paying people to take barrels off of their hands), our purchase didn’t feel warm and fuzzy. But then again, most successful contrarian trades don’t.

We recognized that oil prices were likely in the midst of a “Crash ‘n’ Rally” pattern. This is an oil-price phenomenon that has played out several times before.

We discussed this back in 2021:

Energy prices tend to “crash ’n’ rally.” The crash is quick, while the ensuing rally lasts for years.Read more

Read More

Let’s be honest: we dividend investors will be glad to see the back of 2021. While it’s been a great year for us at my CEF Insider service (our portfolio yields 7.2%, on average, and we’ve seen some nice double-digit winners, too), it seems like every day begins with a market-crushing (and anxiety-inducing!) news story.

To be honest, 2022 will likely bring much of the same, but if you do what I strongly recommend—stay away from the business news as much as possible—you’ll do your portfolio (and your mental health!) a big favor.

You and I both know the pundits rarely get it right anyway (who remembers the hand-wringing worries about deflation 12 months ago?… Read more

Read More

As we Americans reemerge from our homes, select “return to normal” dividend payers are poised to deliver big gains. I’m talking about upside of 40% in addition to their 4% to 10% current yields.

But aren’t recovery stocks already expensive? We recently discussed how Americans aren’t exactly sleeping on the American vacation. The Invesco Dynamic Leisure and Entertainment ETF (PEJ), which includes restaurants, hotels, casinos and more, has gone skyward of late—and it’s not alone.

A quick look at some of the best ETFs over the past three months shows where investors believe the reopening money is heading:

Unfortunately for income investors, these industries tend not to pay dividends.… Read more

Read More

Here at Contrarian Outlook, our beat is income, and we’re often asked for analysis on high-yield ETFs. Today, we’ll look at three funds paying up to 11% (yes, that’s no typo).

I appreciate the ETF popularity. They’re cheap. They’re tax-efficient. They’re  well-marketed. They’ve got cutesy tickers.

But income investors who blindly buy into the hype, unfortunately, are not getting the most dividend for their dollar.

The real dividend deals are found in ETFs’ lesser-known cousins, closed-end funds (CEFs), which often dish even bigger payouts (and a monthly cadence, to boot). CEFs can also trade at discounts to their net asset values, because they fly under Wall Street’s radar.… Read more

Read More

When it comes to protecting—and growing—your dividends (and portfolio) in these trying times, there are two sectors you should watch like a hawk: technology and energy.

Both are standouts in this crisis, but in completely different ways. Energy, for example, is a big reason why the second-quarter earnings outlook for the S&P 500 looks so grim:

Take a look at the chart below and you’ll see that energy is by far the biggest loser. Along with a few other industries, it offsets other areas where profits are forecast, such as tech, utilities and healthcare—all three of which are also great spots to shop for big dividends now.… Read more

Read More

Today we’re going to look ahead to 2020—and specific sectors to target for rising profits (and dividends!) in both stocks and 7%+ yielding closed-end funds (CEFs).

We’re also going to look inside a worrisome piece of news you might have heard about 2019—that analysts expect corporate profits to rise a meager 0.3% when they close the books on this year—and uncover why this is not a scary omen for the future.

Because when we hear numbers like that, we need to look further and see where they’re coming from. In this case, there’s a very simple reason no one is talking about.… Read more

Read More

We’re going to push aside overdone recession fears today, so I can show you one fund you can buy for triple-digit upside. And this unsung dividend play spins off a big income stream, too: a 10.6% yield.

It comes from a sector few people check for high yields: energy.

But this investor “blind spot” is why this 10.6% dividend opportunity exists. Read on and I’ll show you how to time your move (if you were to buy this fund or invest in energy generally).

First off, forget the jarring headlines you’ve seen about a corporate-earnings slowdown in the US. When you dive into the sector level, you see that the outlook is rosy in plenty of places, with energy leading the way, according to the analyst crowd.… Read more

Read More

Energy stocks are en fuego again after a drone strike on a Saudi oil facility. We’re going to (as usual) skip the geopolitical talk and discuss oil dividends that will benefit from this disruption.

While “buy and hope” investors ponder basic ways to play the spike, you and I know that about half of energy returns come from payouts. Check out the orange line below, the total return of a popular energy index with dividends. It’s nearly double what the stock prices themselves returned:

The Real Key to Oil Riches? Dividends.

No dividend is guaranteed forever. But broadly speaking, income has been a far more reliable source of energy-sector returns than price performance, making up nearly half of energy’s total returns since late 1998.… Read more

Read More

Let’s face it: you hardly ever get decent income from commodity stocks. And when you do, these payouts are usually first to get the axe next time, say, oil nosedives.

And with oil doing this…

Oil Falls—Oil Companies’ Profits to Follow

… you may worry that it’s about to get harder to squeeze income out of oil companies.

Still, if you’re worried about inflation or the Federal Reserve distorting markets, or if you just want to hedge your stock portfolio, you’ll likely turn to commodities at some point. And there’s no more established inflation hedge than gold.

There’s just one problem: gold doesn’t produce anything.… Read more

Read More

Categories