Rising Rate Dividend Plays Paying Up to 9.8%

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Rising Rate Dividend Plays Paying Up to 9.8%

On Sunday night, our old friend exclaimed to my wife and me: “How have you all been??”

It’d been, well, almost a year since we’d been to her bar. We had plenty to catch up on with our drink-slinging pal as we sipped and snacked. Back on the home front, our babysitter had recently resurfaced and appeared to have bedtime under control. It was nice to have a throwback evening, the type we all took for granted just 12 months ago.

In the interim, many income investors have, likewise, taken low long-term rates for granted. Not we contrarians, of course.… Read more

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1 Dumb Dividend Capture Strategy, 2 Better Income Ideas

Our beat here at Contrarian Outlook is dividends. We seek to collect them using proven income strategies.

Dividend stock investing isn’t easy, even though it looks so on the surface. (Find a high yield, and buy it!) We’ve all had our heart broken by one or more “disappearing” dividend payers in the past. These delinquents are the reason we place such a premium on dividend security.

One secure-looking strategy is (unfortunately) known as dividend capture. I don’t like the name because it sounds like something we should be interested in. I don’t like the approach itself because it doesn’t really work.… Read more

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The Best Dividend Stocks for Biden, a Vaccine and Gridlock

Since we last connected last Wednesday, we’ve had a few notable events happen (to say the least!)

First, former vice president Joe Biden became president-elect Joe Biden. Depending on your perspective, this may or may not be a “done deal” as far as you are concerned. That’s fair. However, it is mostly a done deal as far as the prediction markets are concerned.

Leading website PredictIt is giving Biden a 90% chance of winning this never-ending November election. I like PredictIt better than any poll because punters are betting “real money” on the website. Heading into the election, the prediction marketplace correctly foresaw a close election, outperforming any pollster I’m aware of.… Read more

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2 Cheap Dividends (Up to 6.6%) to Buy Post-Election

Make no mistake: now is the time to buy dividend stocks. That’s because stocks tend to rally from Election Day to the end of the year—no matter which party wins.

The important thing is that the election, and the uncertainty it brings, is over.

The post-election surge is already on, with the S&P 500 jumping 6% since the market close on November 2. Plus we’ve got a nice seasonal effect working in our favor, as stocks tend to gain from October to May.

A Second Chance to Buy Cheap

But don’t worry—if you haven’t used this opportunity to set yourself up for some strong upside (and growing dividend payouts) you’re not too late.… Read more

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My Crisis-Investing Strategy for 7.1% Yearly Dividends (forever)

This crisis has hit income-seekers—particularly retirees—hard. After the stomach-churning March selloff came the slashing of “sacred cow” dividends, like those of senior-care providers Ventas (VTR) and Welltower (WELL).

Look to Closed-End Funds for Retirement Income

It’s understandable (and healthy!) if the past few months have made you extra cautious when picking dividend stocks. The good news on the dividend front is that you can still find plenty of high, safe payouts in my favorite corner of the high-yield market: closed-end funds (CEFs).

CEFs are a great pick for retirement income today, for three reasons. First, they still give you access to large-cap stocks you know well: mainstays like Visa (V), Apple (AAPL) and Johnson & Johnson (JNJ) feature in many equity-CEF portfolios.… Read more

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Buy and Hold Forever: 7 Safe Yields Up to 7%

Have utility stocks been stripped of their safe-haven status?

I’ve fielded that question from a few readers who have rightly pointed out the utility sector’s unimpressive performance during 2020’s market rout and partial recovery.

The short answer? No, it hasn’t. At least not for those of us who look through short-term price jitters to lock-in long-term payouts.

Back in the “good old days,” utility stocks delivered enough income to actually retire on. And thanks to this once-in-a-decade panic, that’s the case once again. Even though utility stocks are well off their bottom, investors still can grab perfectly safe yields of up to 7% in the space.… Read more

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Late Cycle Investing: Dividend Stocks for 2020 and Beyond

Until a flu-like virus emerged halfway around the world, it’s been three peaceful months since we’d seen a “1% up or down day” in stocks. As usual, the volatility inspired investors to reflect upon the advanced age (almost eleven years) of our current bull market.

To paraphrase the legendary rock band Chicago, does anybody really know what time it is in the rally right now? “Late cycle” is a popular guess. But how late?

Did the streetlights just pop on, or is it 2am with money managers stumbling into their taxis and Ubers outside?

Most rallies don’t make it to eleven, but then again, most don’t follow financial crises either.… Read more

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Shocker: These “Safe” 7% Dividends Will Lead the Market (Down)

It’s easy to see why investors love utilities:

  1. Low volatility
  2. High yields

But there’s a problem: recent scares like the inverted yield curve mean some utilities, and utility funds, have gotten ahead of themselves and are more prone to a pullback than most folks think. (The three 7%+-yielding closed-end funds (CEFs) I’ll show you shortly top this “overpriced” list.)

The worst part is, many people think utilities are underbought, because the benchmark Utilities Select Sector SPDR ETF (XLU) is up 8.3% year-to-date, half the 16% gain of the SPDR S&P 500 ETF (SPY).

But that’s recency bias. Stretch the timeline to 12 months and things look very different:

Utilities Get Pricey

Interest-Rate Pause Should Boost Utilities.… Read more

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3 “Yield-Curve-Proof” Buys for 7%+ Dividends and Upside

The “yield curve” has inverted—and that could be terrible news for your dividends!

But don’t worry: there’s a “pullback-proof” way to keep your income and your nest egg secure—no matter if there’s stock-market fire behind all this yield-curve smoke.

Below I’ll reveal three stocks perfectly positioned for whatever lies ahead: if the market tanks, they’ll likely trade flat, thanks to their cheap valuations (and sturdy dividends).

And if it all turns out to be hype and the market keeps rolling higher? They’re poised to skyrocket while handing you a 7.1% average payout (with one of these stealth buys even throwing off an amazing 9.3% yield!).… Read more

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Forget Oil: This 7.6% Dividend Will Soar in 2019

Oil prices have been locked in a tight range for five years—and I know I don’t have to tell you that this has been a disaster for energy investors.

Oil Fails to Launch

With the benchmark Energy Select Sector SPDR (XLE) unable to hold its gains for long (let alone recover to pre-crash levels), even the most conservative energy investor has been clobbered.

Why is this happening?

After all, you’d think a growing global population and emerging-market growth would drive up the price of a limited resource like oil. But the tables have turned. I’ll get into why shortly.

These Dividend Payers Are Better Buys Than Oil

For now, though, I recommend that income-seekers go a different route and pick stocks (and closed-end funds [CEFs]) that benefit from cheaper oil and gas—like utilities.… Read more

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