This Soaring 8.8% Dividend Is Cheap (you won’t believe why)

The Contrary Investing Report

Investing and Trading News, with a Contrarian, Sarcastic Twist!

This Soaring 8.8% Dividend Is Cheap (you won’t believe why)

Today I’m going to show you nothing less than a “dividend unicorn”: a closed-end fund (CEF) yielding 8.8% that’s raised its payout 24% in just the last six months. (And yes, it’s primed for many more hikes, too.)

Get this: because of the weirdness of the CEF market, this cash machine is still cheap today—trading at 13% off its “retail” price!

Let’s dive in.

I’m talking about the PGIM High Yield Bond Fund (ISD). It’s a smaller CEF (with just $552 million in assets). That small size helps set up our chance to buy cheap—and I’ll say more about why this deal exists in just a moment.… Read more

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3 Dividend Stocks That Are Near-Perfect for High Volatility

“I did read that. I thought about you, B.O.”

While other people may be known for their hobbies, or their families, my publisher thought of me when a Vanguard fund re-opened!

I’ve yapped about the Vanguard Dividend Growth Fund (VDIGX) before. I rarely mention (let alone endorse!) mutual funds. But VDIGX is notable for two reasons:

  1. I plow 100% of my 401(K) contributions into this fund, and
  2. It’s a pretty good option as far as retirement plans go.

Why this fund? Because in my “Brett Inc.” company plan, I have a set list of Vanguard funds to choose from. This is “set and forget” money so my goal is to maximize long-term returns.… Read more

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A Safe 6.3% Yield — And a Strategy You Have to See to Believe

Quite often, investors come into the market with the false perception that making money is a guarantee.

However, many learn the hard way that’s not often the case.

That’s because they come into the market without a game plan.

And as any investor will tell you, that’s a bad idea — especially in today’s volatile market.

In fact, with markets saturated with fear over the trade war, and with an inverted yield curve pointing to a recession, you must have a plan.  After all, if you fail to plan ahead, you plan to fail.

If you want to do well in a fear-based market, plan ahead like a billionaire.… Read more

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How to Play This Dip for 7.7% Dividends, 200% Payout Growth

Forget the trade war noise. Here’s the only thing you need to know: if you’d bulked up your stock holdings on any of the dips we’ve seen in the last four years, you’d be a lot richer today.

Buying the Dip Amplifies a 65% Gain

The reason for the market’s “one step back, two steps ahead” pattern is simple: despite the interest rate- and trade-driven terror, corporate profits and sales are rising (as are workers’ wages), and unemployment is low.

In other words, the US economy is solid—and it’s stayed solid through every short-term crisis of the last few years. So now we have another pullback that’s given us another chance to amplify our upside.… Read more

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The Best Bonds to Buy for a Retirement Portfolio Right Now

Should we income investors buy any bonds right now? Bond prices have rallied, but the rear view mirror doesn’t help any new money we’re putting to work right now. Meanwhile interest rates are tanking, which tends to defeat the point of purchasing fixed income in the first place.

But, stocks are on a roller coaster ride. If you’re getting a bit nauseous with the violent day-to-day swings, you may appreciate a little stability to balance out your portfolio.

Whether you’re looking for dividends, sanity, or both, you’ve come to the right column. Let’s take a spin around Bondland and rank ‘em worst to first.… Read more

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310% Upside, a 12.9% Dividend and a Yield-Curve Strategy You Won’t Believe

Here’s the funny thing about the inverted-yield-curve talk we’re getting hit with lately: most people are looking at the wrong numbers!

I’m going to show you how we savvy dividend investors can jump on this mistake to bag total returns of 69% and up—fast. First, here’s what I mean when I say investors are looking at the wrong numbers.

These days, all we hear about is the yield-curve inversion we’ve seen a couple times over the last few weeks, where the yield on the 10-year Treasury note fell below that of the 2-year.

It’s certainly worth paying attention to, because the inversion of the 10- and 2-year Treasury yields does predict recessions—though the timeline tends to be around 18 months and maybe even longer than that.… Read more

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Warning: This 14% Dividend Fails ALL of My Safety Checks

If you’re like most folks, you likely at least take a second look when you run into a big dividend yield, like, say, 14%.

Think about that for a second: drop, say, $100K into a fund like that and just seven years later, you’d have collected enough in dividends to recoup your entire initial stake.

Everything else is gravy!

But when we come across a dividend that big, we need to do a second-level analysis to make sure it’s sustainable. And that brings me to the closed-end fund (CEF) I want to tell you about today—it gives us that 14% yield but misses the mark on just about every factor you could imagine, giving us:

  • Impossibly high management fees
  • A portfolio that underperforms the market
  • An overpriced valuation, and …
  • Its profits are falling short of payouts.

… Read more

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These Brazen Insiders are Buying Their Own 9.7% Yields Like Crazy

Insider buying can be a great indicator for us income investors to buy alongside management. After all, when the big bosses reach into their own pockets to purchase their own payout streams, it’s a signal that they are confident in more than just the next dividend.

They believe their stock has upside, too. Often this results in total returns (including dividends) up to 214%. I’ll show you some examples, and also break down some current “buy” signals, in a moment.

First, let me make sure we are not mixing up insider buying with insider trading. They are two different things.… Read more

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Dividend Alert: Last Chance on 3 REITs Paying Up to 8.5%

With panicked investors in full retreat, we’re left with three ridiculously cheap opportunities that could outpace the market in coming months.

Best of all, the three of them offer respectable dividend yields, with one above 8%.

However, before we jump into them, let’s discuss why markets may be heading higher.

Fears of a Recession are Overblown

Growth forecasts are now rising, and the economy looks nowhere as bad as the bond market yields would have us believe.  For example, even with all of the chaos this summer, consumers have remained resilient– and they’re spending.

July 2019 retail sales jumped 0.7% month over month, for example.… Read more

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The 7% Dividend the Recession Can’t Touch

The most reliable recession indicator in the world just flashed red—and it’s actually setting us up for 33%+ gains in the next two years.

A contradiction? Sure sounds like it.

But history tells us we can expect a fast return like this when the economy and stock market look exactly like they do right now.

I’ve got two ways for you to grab a piece of the action, one of which even hands us a growing 7% cash dividend.

And when I say “growing,” I mean it: this already-huge cash stream has grown 96% in the last 15 years, and it’s backed by the strongest stocks in America (I’m talking about the 30 names on the Dow Jones Industrial Average), so there’s plenty more to come.… Read more

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