Category Archives: Dividends

Earn 12% In A Month On This Twitter Covered Call

Twitter (NYSE: TWTR) is one of those companies which often poses a conundrum to investors. On one hand, the microblogging site has become an essential tool for following breaking news and insights into everything from sports to finance to politics. On the other hand, despite the popularity, the company doesn’t have an obvious path to ramp up monetization of its user base.

Regarding the issue of monetization, the company primarily makes its money on ad revenues. However, Twitter ads get mixed reviews as far as effectiveness. And frankly, the company doesn’t have many alternative for generating revenues outside of ads. Selling/licensing customer data (trends, etc.) is certainly a big growth area, but it has a ways to go to make a real impact on revenues.

On the bright side, Twitter is pretty much a must-have product for anyone who utilizes social networking. Active Twitter users include the President of the US, just about every famous athlete and entertainer, and a multitude of industry experts. For concise and/or breaking news, there’s simply no better source available.

It’s easy to see why investors are bullish on the stock. Yet, it’s equally logical to see the argument from those who may be skeptical on future growth potential. Look no further than Facebook (NASDAQ: FB) to see the potential perils of a public social media company. (Of course, TWTR has its own challenges with how it handles First Amendment issues.)

So how do you trade TWTR if you’re bullish on the stock but are concerned about downside risk?

As I matter of fact, I recently came across an interesting covered call trade in TWTR which provides a nice balance between risk and return. The beauty of covered calls is they can provide a hedge, income, and growth potential all in one trade.

This particular covered call involves selling 2,000 of the January 18th 40 call versus stock at $36.73. In other words, the trader purchased 200,000 shares of TWTR while simultaneously selling the 40 calls 2,000 times. The calls were sold for $1.10 meaning the trader collects $220,000 in premium.

First off, the $1.10 in premium collected also serves a hedge for the long stock. It protects the trader down to $35.63. Moreover, that premium represents a 3% yield on the trade, which expires in just over a month. That represent almost a 36% annualized yield.

In addition, since the trader is selling out-of-the-money calls (at the 40 strike), there is also stock appreciation potential. An additional $3.27 can be earned if the stock goes to $40 or higher by expiration. That’s represent another 9% in gains. All told, if TWTR has a good month, this trade can make as much as 12%. (In dollar terms, the trade can make about $875,000 at max gain.)

If you’re bullish on TWTR but worried about overall market conditions or company specific bad news, this is exactly the sort of trade you want to be making. You earn the 3% yield no matter what. The trade also provides a limited hedge on the stock price if the market sells off. And, you still have an additional 9% upside potential in stock appreciation.

It’s hard to argue with a relatively safe trade that can also produce 12% gains in about a month. If this trade appeals to you, I believe it’s a nice addition to any income-producing portfolio.

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Source: Investors Alley

7 Dividend Titans Trading Like Growth Stocks

Source: Steve Buissinne via Stock Snap

Investors are often on the lookout for a fourth-quarter swoon starting in October. Sometimes it comes to fruition and other times it does not. This year though, it most certainly has and the volatility has lasted about two months. It’s left investors fleeing growth stocks, gobbling up dividend stocks and looking for shelter.

And we may not be out of the woods yet. That’s particularly true if the trade situation with China doesn’t improve. The White house had announced a trade war cease fire after a meeting at the G-20 summit, though the exact details of the agreement are not entirely clear.

It helps that the Federal Reserve is walking back its rate-hiking outlook. Investors are feeling more comfortable that the Fed will not hike us into a recession, although skepticism remains.

Even though GDP is growing nicely, consumer spending is red hot and unemployment is low, the stocks that are outperforming are all ones we’d want to own during a recession. That’s not a great development, particularly as investors dump FANG and multiple sectors into bear market territory.

It has been an ugly showing to say the least, but can we get back on the right track? Let’s take a closer look at a few dividend stocks trading like growth stocks.

Johnson & Johnson (JNJ)

Dividend Stocks: Johnson & Johnson (JNJ)

Source: Shutterstock

Dividend Yield: 2.5%

Johnson & Johnson (NYSE:JNJ) did stumble from over $138 to $132 in early October, but it didn’t take long for investors to find comfort in this long-time dividend stalwart.

Johnson & Johnson pays out a 2.5% dividend yield, has a payout ratio below 50% and has raised its annual payout for 56 consecutive years. When the economy falls on hard times, it’s hard not to like a consistent payout like that.

With JNJ, we get a rock-solid balance sheet and a dividend we know we’ll collect. On the charts, we were buyers last week on a test of the 50-day moving average. That proved to work out well, with shares quickly bouncing from this level.

But can they work their way up and past the recent high near $148? If JNJ can’t do that, we’ll have a lower high on our hands and will have to see if uptrend support (blue line) can keep it afloat. Below $140, JNJ losses a bit of its luster.

McDonald’s (MCD)

Dividend Stocks: McDonald’s (MCD)

Source: Shutterstock

Dividend Yield: 2.5%

Some fast-food and fast-casual names have been on fire and McDonald’s (NYSE:MCD) is no exception.

Yielding a similar payout of 2.5%, McDonald’s has raised its annual payout for more than four decades. It’s another name that does well during a recession. Part of that is the dependable yield, the other is a dependable (although not necessarily healthy) burger.

Further, its stock has been dependable too. While Amazon (NASDAQ:AMZN), Netflix(NASDAQ:NFLX) and Apple (NASDAQ:AAPL) have all fallen by 20% or more from peak to trough, MCD is quietly up about 10% from the beginning of October.

It’s outperforming its peers, major market indices and most equities during the last eight weeks. This one has been on fire, clearing its previous all-time high near $175 made in January before settling back a little on the latest bout of market weakness.

The tough part with McDonald’s is, what happens if growth stocks come back to life?

So long as it’s over the 21-day moving average and uptrend support, I don’t see a reason to get too defensive. Fall below that mark though, and this play could lose some momentum. Long-term investors don’t have much to worry about, but short-term traders hiding out in this dividend stud might want to think twice if it goes below this level.

Coca-Cola (KO)

Dividend Yield: 3.2%

Coca-Cola (NYSE:KO) is another one showing signs of exhaustion. While the company has done a great job to transform itself over a multi-year effort, one has to wonder how long the show can go on.

Despite the roughly 6% rally over the last two months — tepid compared to MCD — Coca-Cola shares still yield 3.2%.

Earlier this month we suggested some covered calls for investors who are comfortable with that options strategy. As we see shares pulling back and stagnating in this upper-$40s area, that trade is playing out well.

But what do investors do now? This stock has been in a narrow trending range over the last five years. While KO did flirt with a breakout of this range, it’s still within it now. Coca-Cola has held up too well over the past two months to consider bailing on it on a whim. On a decline, look for $46 to keep big KO afloat. Above $50 and look for this one to keep on chugging.

Procter & Gamble (PG)

Dividend Stocks: 3.1%

Like KO, the turnaround efforts are working for Procter & Gamble (NYSE:PG) — at least, they’re working for PG stock.

Even after accounting for a notable dip in early October, shares of Procter are still up 17% over the last eight weeks. It’s hard to complain about that kind of performance, particularly as investors continue to collect a 3.1% dividend yield.

This name has not only dished out a dividend for more than 60 years, but also raised its annual payout each year through that span. That’s incredible when you think about it.

With that said, Procter & Gamble is putting in the same lower-high look that JNJ is. Of course, that move would be negated if PG stock can soon rally to take out its highs from earlier this month. If not though, investors have to be thinking about a slight to moderate pullback.

On a decline, look to see how PG holds up near $90. This level acted as resistance back in January 2018 and December 2017. Look for it to now act as support. Further, uptrend support  is just below this mark. I wouldn’t worry too much (from a trading perspective) unless PG fell below the 50-day.

Verizon (VZ)

Dividend Stocks: Verizon (VZ)

Source: Shutterstock

Dividend Yield: 4.2%

Also a “lower high” candidate, Verizon (NYSE:VZ) is chopping around near its highs.

My gut tells me that the next few weeks could either be an acceleration higher for these dividend names or a rotation out of these stocks and back into traditional growth stocks. Which one it will be, I’m not sure. These “lower highs” show investors’ hesitation in the charts as well. Ultimately, the performance of the major indices will likely be the deciding factor.

Despite Verizon’s roughly 13% rally over the last two months, shares still yield about 4.2%. In that time, the 50-day moving average has become a pretty solid indicator of support.

Should it fail, look for a decline into the mid-$50s, down near the $56 level.

If you’re not in VZ, I would wait for this potential pullback to materialize. In the meantime, consider going long AT&T (NYSE:T). It has a much larger yield at 6.5% and has raised its dividend for 33 consecutive years (triple the length of Verizon). Plus, it just laid out a promising roadmap for its earnings and free-cash flow for 2019.

Plus, its dividend is almost never this high.

PepsiCo (PEP)

Dividend Stocks: PepsiCo (PEP)

Source: Shutterstock

Dividend Yield: 3.2%

Have I said “lower high” enough? By now I’m sure you’re getting the picture. Long-term investors shouldn’t worry about it too much, but short-term traders should consider the possible rotation ramifications here.

But as they say on Wall Street, the trend is your friend until it bends. With PepsiCo (NYSE:PEP), there has been no such bend. We were buyers during its May decline and that move has paid big dividends — no pun intended.

Holding up over the 21-day moving average and uptrend support, this 3.1% yielder has been trading incredibly well. Below these levels and we likely get a dip down to the 50-day moving average. Below that and we’ll likely see the 200-day. That said though, I don’t anticipate this chart falling apart anytime soon.

If anything, I’m looking for a breakout over this $118 to $120 range. Same with Coca-Cola? Now that’s something to ponder.

Realty Income (O)

Realty Income (O)

Dividend Yield: 4.1%

As if the first six names on this list weren’t an obvious indicator, the performance by Realty Income (NYSE:O) and other REITs is a major sign that investors are seeking high-quality income.

Why? Because even with a more hawkish Fed, investors are flocking to real estate. That’s right. The same worry that took these names down big in Q4 2017 and gave them a major hangover to start 2018 is now seemingly absent from investors’ minds.

As we worry about further rate increases, REITs like Realty Income continue to grind higher. Of course, when we zoom out it makes more sense. With rising rates comes a stronger economy and with a stronger economy comes better performance from businesses, which are the tenants to companies like O.

They don’t call O “The Monthly Dividend Company” for nothing, either. Still yielding over 4.1%, this dependable company has been depositing rising “rent” checks in investors’ pockets for more than 20 consecutive years.

Its stock price has been showing similar dependability as of late and we sure are glad we were pounding the table on this name (and two others) back in the summer. O stock is now up about 16% over the last eight weeks. Can it keep pushing?

The hope is that it can pierce through this level and hold onto at least $63 to $64 as support. Given its hot run through and with a rate hike likely looming in December, a decline down to the $60 area wouldn’t be surprising (or unhealthy).

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Source: Investor Place 

These 8 High-Yield Dividend Stocks Are About to Disappear for Good

At the core of stock values is the economic fact of supply and demand. You know how that works. Yet in the world of stocks, supply is generally open-ended. The financial world is happy to put more supply of individual stocks or shares of funds or ETFs into the market. Share price changes are almost 100% driven by changes on the demand side.

However, upcoming changes in the MLP sector will produce a significant supply reduction. The market doesn’t seem to be aware that there is also a supply side to supply and demand. This provides an attractive opportunity to pick up some unavoidable value gains.

Master limited partnerships and other companies operating in the midstream/infrastructure energy subsector have been implementing a range of financial maneuvers since energy prices and related stock prices crashed in 2015. Now late in 2018 it seems the group is at the end game of the path that has been followed for the past three years. The remaining problem is that the stock market has not yet recognized the stronger fundamentals in the sector with higher stock or unit price values.

The final step to the midstream sector restructuring is now taking place. This involves taking out of the market those midstream companies where the sponsors do not believe keeping these companies as publicly traded entities makes financial sense for the long term goals of the sponsor entities.

For example, at the beginning of 2018, there were eight publicly traded MLP general partner stocks. When this current consolidation phase is over, there will be none. Over the last few months the mergers or buy-ins of four midstream companies have been completed. Over the next few months, these stock symbols will meet the same end and no longer be publicly traded companies: SEP, EEP, AM, ENLK, WES, EQGP, VLP, DM, TLP.

This list accounts for about 10% of the index tracked MLP universe.

With one-tenth of the sector disappearing, MLP focused mutual funds, closed-end funds, ETFs and ETNs will have cash from the transactions that must be reinvested into the remaining stocks in the sector. ETFs and ETNs will be forced to follow the new weightings put out by the index providers. The closed-end and mutual funds won’t be forced to buy specific midstream stocks but will have significant amounts of new cash to put to work.

To give you an idea of the amount of money at stake, the MLP ETF and ETN groups have $18.5 billion in assets. Mutual and closed-end funds have assets of $38 billion. Rough math gives approximately $6 billion in loose cash that will soon be chasing the remaining companies in the MLP space. The Alerian MLP Index has 36 component companies. The Alerian MLP Infrastructure Index just 21 component MLPs. The adjusted market cap of the entire MLP sector is about $170 billion.

The bottom line is that the amount of supply coming out of the MLP sector will produce a large amount of cash that will be chasing the reduced amount of remaining supply. This demand imbalance could be the trigger event to start the MLP sector climbing out of its 3-year long bear market.

Here are three investment ideas to participate in the supply vs. demand imbalance coming over the next few months.

Enterprise Products Partners LP (NYSE: EPD) with a $57 billion market cap is the largest midstream MLP. The company provides the full range of energy infrastructure services.

EPD is one of the biggest pipeline service providers to transport crude oil from the Permian to the Texas Gulf Coast. It recently announced that its 416-mile Midland-to-Sealy pipeline is now in full service with an expanded capacity of 540,000 barrels per day (“BPD”) and capable of transporting batched grades of crude oil.

This company also stands out from the MLP pack by using internally generated cash flow to pay for growth projects. In an era where the cost of raising equity capital is high, this is a significant advantage.

EPD yields 6.6% and is growing distributions by 2.5% per year.

Magellan Midstream Partners LP (NYSE: MMP) primarily owns and operates refined products (gasoline, diesel fuel, jet fuel, etc.) pipelines and storage terminals. The company also owns 2,200 miles of interstate crude oil pipelines.

The company provides service to almost 50% of the U.S. refining capacity. With its $14 billion market cap, Magellan is one of the more stable large MLPs. This is another of a very small number of midstream energy companies that funds growth capital from internal cash flow.

Since its 2001 IPO, this MLP has consistently grown the distributions paid to investors. Over that period, the payouts have grown at a 12% compounding rate.

Currently the company forecasts 5% to 8% distribution growth through 2020.

MMP yields 6.5%.

If you don’t want to own individual MLPs and have to deal with the Schedule K-1 tax reporting, look at the Global X MLP ETF (NYSE: MLPA). This MLP ETF has a management fee that is half the rate charged by the larger and better known ALPS Alerian MLP ETF (NYSE: AMLP). MLPA uses the Solactive MLP Infrastructure Index as its benchmark.

The fund currently yields 8.7%.

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5 Dividend Doublers That Run Laps Around the Market

If you want to figure out how long it will take to double your money in an investment, you use the “Rule of 72.” But income investors can put this rule to work, too, to figure out just how quickly their dividends will pile up.

I’ll show you how – and I’ll show you five dividend stocks that are on pace to double their dividends in just seven years.

The Rule of 72 is just a simple equation you can use to project the amount of time it would take to double your investment money. The equation:

72 / compound annual interest rate = # of years to double your investment.

So let’s say the S&P 500 returns an average of 8% a year. 72 / 8 = 9. That means it should take about nine years for someone holding a market fund such as the SPDR S&P 500 ETF (SPY) or Vanguard S&P 500 ETF (VOO) to double their money.

Obviously, I aim to do better.

But you can also use this equation to figure out how quickly your dividends should grow over time, which will help you figure out your eventual yield on cost.

For instance, say a stock yields just 3% now, but is on pace to double its dividend in just five years, you can essentially plan for a much healthier 6% yield on cost in a short amount of time. That would be an income play you and I could get behind!

Let’s use the S&P 500 as an example again. The index has grown its dividend at an average of 8.2% per year over the past five years. The math isn’t much different – it’ll take just under a decade for the S&P 500 to double the dividends it pays out.

That’s a little sluggish for my tastes, especially considering there are numerous dividend payers that are acting with a lot more urgency. Today, I’m going to point you in the direction of five stocks whose payouts are booming. These firms have been boosting their payouts by an average of at least 10% every single year (and in many cases more) – putting them on pace to double their dividends in just seven years or less!

Booz Allen Hamilton (BAH)

Dividend Yield: 1.4%

5-Year Average Dividend Growth: 13.7%

American information technology and management firm Booz Allen Hamilton (BAH) isn’t the first, second or hundredth stock on most investors’ lists. But it’s worth a look, both for its array of business arms and the stellar results they’re driving.

Booz Allen Hamilton is perhaps best known for its consulting business, which has been used historically for tasks ranging from World War II preparations to the merger of the National Football League with the AFL. BAH also deals in analytics, digital solutions, cybersecurity and even engineering.

All told, Booz Allen has more than 25,000 employees working across 400-plus locations in more than 20 countries. Nearly 70% of which hold security clearances, which speaks to its heavy ties to the government – in fact, the federal government was responsible for 97% of the company’s $6.2 billion in fiscal 2018 revenues.

This has fueled a general uptrend in both revenues and net income since its 2010 IPO, which in turn have powered a very consistently growing dividend.

Booz Allen Hamilton (BAH): An Unheralded Growth-and-Dividend-Growth Play

The company improved its payout by a pair of pennies to 19 cents quarterly this year – a 12% improvement that’s not far off its five-year average dividend growth of roughly 14%. And that dividend isn’t even 30% of this year’s projected $2.64 in profits, which means the company has oodles of room to write larger checks for years to come.

MasterCard (MA)

Dividend Yield: 0.5%

5-Year Average Dividend Growth: 17.8%

Credit card use isn’t new to you and me. In fact, plastic has been around so long that you probably think almost everyone uses a credit or debit card and that there’s not much market left to grow into.

Wrong. Strategic research and consulting firm RBR’s “Global Payment Cards Data and Forecasts to 2022” report shows that global payment-card use grew 8% worldwide to 14 billion in 2016, and that number is expected to balloon by 22% to 17 billion by the year 2022.

That’s fantastic news for MasterCard (MA) – the No. 2 player not just in the U.S., but in Europe, in Africa and in Latin America.

The important thing to remember about Mastercard and rival Visa (V) is that while they seem like financial stocks, they’re really closer to being technology stocks – they’re not lenders, just payment processors. That means they need to constantly innovate to stay ahead of the game, which Mastercard has been doing via its recently announced Digital Commerce Solutions, which includes a plan to make all its cards support token authentication within two years, and a partnership with Southeast Asia’s Grab to offer virtual prepaid solutions for the ride-hailing company’s 110 million customers.

MasterCard pulls in roughly $12.5 billion annually across its worldwide payments network. The company did nearly $1.5 trillion in gross dollar volume around the globe in the third quarter alone, across some 2.5 billion cards – up 4% year-over-year. MA has produced steady growth for years, which has translated into explosive growth in the dividend – to the tune of roughly 18% annually over the past half-decade.

And its 25-cent quarterly dividend? That comes out to a mere 15% of this year’s projected earnings, which means MasterCard could triple its payout overnight and still have more payout headroom than most established dividend-paying blue chips.

MasterCard’s (MA) Dividend Is Charging Ahead

Better still: Shares have a lot of “catching up” to do with the payout.

Vail Resorts (MTN)

Dividend Yield: 2.2%

5-Year Average Dividend Growth: 48.0%

Vail Resorts (MTN) – a play on the “experience economy” – is essentially the future of ski lodges. Vail, as well as a few other groups, are buying up ski resorts, lodges and other operations across the U.S. and around the world, and bringing them under one brand to better serve wealthy customers whose particular destination tastes may change from time to time.

Vail is split into three divisions:

Mountain: This entails the company’s premier mountain resorts, including the namesake Vail, as well as Breckenridge (Colorado), Northstar (Lake Tahoe, California), Perisher (Australia) and Whistler Blackcomb (Canada), among others.

Source: Vail Resorts’ 2018 Investors Conference Presentation

Lodging: Vail Resorts Hospitality owns several properties around its various resorts, including five RockResorts luxury hotels, as well as a National Park contract at Grand Teton National Park and an airport-to-resort transportation company, Colorado Mountain Express.

Real Estate Development: Lastly, Vail Resorts Development Company helps plan, market and otherwise develop property around the resorts, including communities and private clubs.

One of Vail’s biggest sources of growth is its “Season Pass,” which allows guests to use its various resorts, rather than tethering customers to one particular resort. Pass sales have grown at 13% annually on average since fiscal 2012, to more than 78,000 in FY2018.

The result has been steady growth pretty much across the board, including free cash flow, which has improved every year since 2012 – from $57.1 million then to $338.6 million in FY2017.

Vail has been generous with that cash, too, growing its dividend by nearly half every year on average over the past five years. Its current $1.47 quarterly dividend comes out to 75% of this year’s profits, but just 65% of next year’s. Don’t expect nearly 50% dividend expansion going forward, but as long as MTN’s earnings swell like they’re expected to, Vail Resorts should be a dividend growth machine.

Southwest Airlines (LUV)

Dividend Yield: 1.2%

5-Year Average Dividend Growth: 74.1%

Southwest Airlines (LUV) is, as I’ve said before, a “breath of fresh air” in the airline industry. In a business that seems to pride itself on kicking puppies and pushing down old ladies, Southwest has set itself apart on the most bizarre of concepts: Treating humans like humans.

This year alone, Southwest has topped J.D. Power’s study for customer service among low-cost airlines in North America, took home four TripAdvisor Travelers’ Choice awards and was No. 2 on Indeed’s top-rated workplaces.

Of course, being nice isn’t everything. You have to make money. And Southwest makes money. The airline has been profitable for 45 consecutive years despite its strong price-competitiveness. In the third quarter, LUV brought in $615 million in earnings – its best Q3 in company history.

That same quarter, the company returned $591 million to shareholders via share repurchases and buybacks. The majority of that ($500 million) was repurchases, but LUV is far, far, far from a distribution slouch. Southwest has pumped up its payout from a mere penny per share at the beginning of 2013 to 16 cents as of this year’s distribution – itself a hefty 28% improvement.

And at a mere 15% of this year’s projected profits, the sky’s the limit on future payout hikes.

Southwest’s (LUV) Dividend Takes Flight

Vulcan Materials (VMC)

Dividend Yield: 1.1%

5-Year Average Dividend Growth: 94.7%

I’m not sure what you think of when you think about a company that has been able to nearly double its dividend every year on average for a half-decade … but it’s probably not Vulcan Materials (VMC).

Vulcan Materials produces the stuff construction is made of: crushed stone, sand, gravel, asphalt and ready-mixed concrete.

Vulcan is the king of what it does – it’s the largest aggregates producer in the U.S. And the company says that “75% of the U.S. population growth from 2010 to 2020 is projected to occur in Vulcan-served states,” meaning it’s perfectly positioned to capture the lions’ share of building projects as time goes on.

The company’s third-quarter report showed just what kinds of tailwinds VMC has been riding to turn the business around from its struggles in the Great Recession. Vulcan’s daily shipping rates were up 6% year-over-year, pricing momentum improved by 3% and unit cost of sales actually declined 2% despite a 28% spike in the cost of diesel. Best of all, cash gross profits per ton improved 6% year-over-year.

Vulcan Materials (VMC) Is Fully Recovered From the Financial Crisis

That money is going straight into investors’ pockets. The company has electrified its payout from a penny per share back in 2013 to a current 28 cents per share – and even then, the company isn’t even doling out 30% of its profits in dividends.

Vulcan isn’t your typical dividend play, but then again, we don’t want typical – we want extraordinary.

Earn a 28% Return in 1 Year From America’s Safest Stocks

These stocks will inflate your dividends faster than almost any other plays on Wall Street, but why wait years for thick dividends when you can get them today?

I’m not talking about the slightly better yields you’ll find in slow-growth stocks like consumer staples Coca-Cola (KO)and Procter & Gamble (PG). You know these tired plays: They’ve chugged along for years, so investors hang on to them hoping to squeeze out 3% yields and a few percentage points a year in growth.

But you can do better than these middling yields from these middling blue chips. Much, much better. In fact, this is one of the best income opportunities I’ve researched in years.

What if I told you that you could turn some of Wall Street’s most exciting, growth-oriented stocks, such as Visa (V)and Google-parent Alphabet (GOOGL), into “double threat” holdings that deliver double-digit upside and 8%-plus dividends? Well, given that Visa pays less than 1% and Alphabet doesn’t deliver a single penny in income, you’d probably call me crazy …

These stocks have extremely specialized businesses that allow them to do the seemingly impossible: They can actually wring high-single-digit dividends from some of the most skinflint companies in America. One of my Dividend Conversion Machines takes Visa’s 0.6% payouts and magnifies it to 9.2%. Another one can take Google’s 0% and produce a 9.4% yield out of thin air.

And no, this isn’t an options strategy, or some dangerous derivative, or the “next Bitcoin.” What I’m going to show you is perfectly SAFE – it’s essentially the same as buying traditional American blue-chip stocks. In fact, I’ll even show you the four steps you’ll need right now:

  1. Launch your web browser.
  2. Go to your trading account.
  3. Instead of entering a buy order for, say, Disney by entering the stock’s “DIS” symbol, enter the 3-letter code for one of my 4 Dividend Conversion Machines instead.
  4. Instead of getting Disney’s 1.6% dividend, start collecting an 8%+ income stream!

That’s it!

Contrarian Outlook 

Editor's Note: The stock market is way up – and that’s terrible news for us dividend investors. Yields haven’t been this low in decades! But there are still plenty of great opportunities to secure meaningful income if you know where to look. Brett Owens' latest report reveals how you can easily (and safely) rake in 8%+ dividends and never worry about drawing down your capital again. Click here for full details!

3 Crash Proof Income Investments to Weather Market Volatility

I don’t currently believe the higher level of stock market volatility is a sign that the next economic recession is right around the corner. Yet, I could be wrong, and the market could also plunge into a bear market without the drop being triggered by the economy going to negative growth.

My income investing strategy remains focused around owning, high-yield, secure dividend paying stocks as best way to navigate the stock market strategy. However, when the market goes down, down, down, it is easier to stick to the plan if you have some money in investments that pay attractive yields and don’t follow the stock market swings.

Here are three ideas to put in your income investing toolbox.

The U.S. Treasury lets individual investors buy Treasury bills, notes, TIPS and bonds without commission at the auction yields through what they call a TreasuryDirect account. The minimum investment amount is $100. By putting your short term cash to work by investing directly in Treasuries, you get the safety of U.S. government issued debt and will earn a higher yield than your bank or brokerage account offers. For example, re-sent auction yields range from 2.2% for the 4-week bill to 2.88% for the 2-year note. For comparison, the Fidelity Government Money Market Fund currently yields 1.85%. Using TreasuryDirect helps your short-term emergency fund money work a little harder for you.

Compared to short-term Treasury Bills, preferred stock shares sit at the other end of the yield curve. Preferred stock dividends have a distinct safety advantage over common stock dividend payments. A company must pay preferred dividends before paying dividends on the common shares. Many preferred issues are also cumulative, which means that if common and preferred dividend payments are suspended by a company, all the unpaid preferred dividends must be paid before the company can again pay dividends on common shares. The result is that preferred stock is a high yield investment with a very low risk of dividend cuts.

Preferred stock prices will rise in a recession if the Fed reduces interest rates, which it very likely will to stimulate the economy. You need to be aware preferred prices will decline in a rising rate environment. It’s tough to evaluate individual preferred stock issues, so I recommend using a dedicated fund like the iShares U.S. Preferred Stock ETF (NYSE: PFF).

Current yield is 5.8%.

Commodity exposure can be a great hedge against rising prices and inflation. Black Stone Minerals, L.P. (NYSE: BSM) is the largest pure-play oil and gas mineral and royalty owner in the United States. The company has rights to over 20 million mineral and royalty acres with interests in 41 states and 64 producing basins.

Mineral, energy or commodity royalty investments give you exposure to the commodity values without any business operating costs. This means that while commodity prices and your returns from this type of investment will fluctuate, you avoid the risk of a business operation challenges such as insufficient cash flow to pay dividends, or even bankruptcy.

Black Stone Minerals is managed for growth through acquisitions. The distributions paid to investors have grown since the mid-2015 IPO. Commodity exposure is a great hedge against inflation and a depreciating dollar.

BSM currently yields 8.9%.

These three investment ideas will provide a safety net in the case of an economic recession or stock market crash. For my Dividend Hunter subscribers I have searched out even more attractive investments in these three categories.

Starting today you can stop worrying about the market and instead fundamentally transform your income stream from a string of near misses to a steady, reliable flow of income right into your bank account.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley 

Dump These 3 High-Yield Turkeys Now

Turkey is the traditional Thanksgiving fare, and I don’t know anyone who doesn’t like to sit down to a full-spread Turkey dinner on the holiday (OK, my sister the vegetarian is an exception. She just wants her dinner to taste like turkey). However, what we don’t want are turkeys in our stock portfolio. In the case of high yield stocks, those are ones where the dividend payment is at risk of disappearing like the pie on Thanksgiving.

The results from high-yield stock investments tend to have a binary outcome. The reason for the high yield on an individual stock is because there is a market perception that the dividend rate is at risk. You have likely heard the saying that high-yield equals high risk.

The outcome for an individual dividend stock will go one of two ways. One possible outcome is that the market is right and the dividend is reduced or eliminated. When this happens, it’s bad news in a stock portfolio. Dividend cuts also come with steep share price declines. The other potential outcome is that the market is wrong, and the company continues to pay the current dividend or even grow the payout rate.

My research for my Dividend Hunter high-yield stock focused service is focused on finding the second kind of big dividend paying stock.

Today I want to highlight a few stocks in the first group. Many investors pick income stocks just from the yield and don’t analyze the underlying financials to see if a company is positioned to sustain the dividends.

The analysis steps are different in the high-yield world, and if you have not been exposed to the techniques, you will likely end up cursing the idea of investing for yield.

Here are three, that if you own them, my suggestion is to sell before the dividend gets cut any you are left with a lot less income and value in your brokerage account.

Martin Midstream Partners L.P. (Nasdaq: MMLP) is a high-yield master limited partnership. The shares currently yield over 17%. After a decade of dividend growth, the music stopped and in November 2016 the company slashed its payout by 38%.

You might assume or hope that after the big reduction the management team would have put itself into a position to support the new lower dividend rate and at some point, resume growth.

It appears that is not the case. For the first three quarters of 2018, the company generated distributable cash flow coverage of just 76% of the distributions paid to investors.

The company says it will soon be able to cover the distributions with cash flow, but too many times have I seen businesses like this be forced into a dividend cut before the cash flow gets high enough to sustain the current dividend rate.

AGNC Investment Corp (Nasdaq: AGNC) is the largest of a group of finance real estate investment trusts (REITs) that own portfolios of government agency backed mortgage backed securities, often called MBS. You will see these referred to as Freddie Mac, Fannie Mae and Ginnie May mortgage backed bonds.

The challenge for AGNC and all the agency MBS owning finance REITs is taking the 4% yield of these bonds up to a double digit stock yield. The step up in yield is done with large amounts of leverage. An agency REIT will leverage its equity 5 to 10 times with borrowed money.

For the 2018 third quarter AGNC reported leverage of 8.5 times book value. The problem with this amount of leverage is that a flattening of the yield curve can wipe out the net interest margin and the ability to continue paying dividends.

History has shown that these REITs are better for management compensation than they are for investors looking for stable dividend payments. The AGNC dividend has shrunk by 14% per year on average over the last five years.

Ignore the 12% yield and sell.

CBL & Associates Properties, Inc. (NYSE: CBL) is a shopping mall REIT on the wrong side of the shopping center great divide. At one end are the successful REITs that own Class A malls which are 95% plus occupied with successful retailers. At the other end are the REITs that own malls with fading demographics anchored by declining retailers like Sears and JC Penny.

These second tier malls will require millions in capital spending to make them again attractive to shoppers, and that spending may not do the trick. Shoppers are fickle, and it may be impossible to draw them back to a near failed mall.

It’s easy to tell the difference between the successful mall REITs and the trouble ones. The good REITs in the shopping center category have yields under 5%. The challenged ones have double digit yields. In the case of mall REITs, the high yield is a true danger signal to sell and stay away.

CBL yields 10.7%.

Get up to 14 dividend paychecks per month from safe, reliable stocks with The Monthly Dividend Paycheck Calendar, an easy-to-use system that shows you which dividend stocks to pick, when to buy them, when you get paid your dividends, and how much.  All you have to do is buy the stocks you like and tell them where to send your dividend payments. For more information Click Here.

Rise of the Robots: How to Grab 500%+ Dividend Growth From AI

Are you looking for that “sweet spot” retirement investment that combines growth tomorrow plus dividends today?

If so, let’s talk about a tech megatrend that’s powering a payout with 546% upside.

For this type of dividend growth, we must consider huge breakthroughs, like the Internet of Things—another name for the millions of devices (from your home thermostat to industrial sensors) hooking up to the web every year.

But hands-down the most important disruptor of all, from a dividend standpoint, is artificial intelligence (AI), the move toward “thinking” computers.

That’s because AI is the one revolution that’s baked into just about every tech advance you can imagine, making everything from cybersecurity defenses to self-driving cars faster, smarter every day.

AI: Your Next Big Dividend Play

Before you roll your eyes, let me tell you this: AI is already a huge source of dividends, and it will only line our pockets with more cash in the future.

Now, I know you don’t often hear “artificial intelligence” and “dividends” in the same sentence, but hear me out.

Because there are billions surging into this technology as I write—and you can grab your share safely, through a large and growing dividend payout, just like the lucky investors in the 3 stocks I’ll show you in a moment.

Geek that I am, I could go on about AI all day. But I don’t want you to nod off, so let’s get into how we’re going to grab our slice of these billions. So here, from worst to first, are my top 3 AI dividend plays now.

AI Pick No. 3: An Accelerating Dividend on the Cheap

AI needs a massive amount of computing horsepower and reams of data to work its magic, and you can already see that demand playing out at Intel (INTC). The company’s hardware for data centers—the maze of servers that companies use to store and analyze vital customer data every day—is flying out the door.

For proof, look no further than the third quarter, when Intel’s data-center group (including its Xeon scalable processor, custom-made for high-demand apps like AI) took off, setting record sales that surged 26% from a year ago.

That sent Intel’s overall sales and earnings per share (EPS) up 19% apiece, crushing the Street’s expectation. No wonder Intel’s dividend (current yield: 2.5%) is not only growing but accelerating:

A Sign of Things to Come

Now is a terrific time to buy: thanks to this fall’s “tech wreck,” this top-notch AI play trades at a silly 10-times earnings, well below the 13-times you’d have paid in June.

The kicker? The payout eats up just 38% of cash flow, making it one of the safest dividends on the market—and practically locking in another big hike this January.

AI Pick No. 2: Clockwork Dividend Growth From “the Backbone of AI”   

No doubt Intel is at the heart of the AI revolution, but a safer way to play earth-shaking trends like this is through Crown Castle International (CCI), a “pick-and-shovel” play on AI.

(If you’re unfamiliar, “pick and shovel” refers to the California gold rush, when the only people who really got rich were the shopkeepers who sold the picks and shovels to the gold-seekers, not the prospectors themselves.)

CCI fits that description to a T: it’s a real estate investment trust (REIT) with 40,000 cell towers and 65,000 miles of fiber-optic cable across the US.

That makes it the backbone of AI, the Internet of Things and just about every other tech trend you can imagine!

The company is already converting our smartphone addiction into soaring revenue and funds from operations (FFO, the REIT equivalent of EPS):

Megatrend-Powered Gains

And if you’re looking for predictable dividend growth, CCI is for you. Management has a stated goal of growing the dividend, which yields 4% as I write, by 7% to 8% a year, and it’s easily clearing that bar.

Another Year, Another 7%+ Payout Hike

So why isn’t CCI my top AI pick?

For one, it’s a bit pricey for my taste, at 20-times forecast 2018 FFO.

Second, we want stocks with long dividend histories, and CCI has only been making payouts since December 2014—not nearly long enough to see if management has the chops to stick keep the payout coming in a crisis.

Which brings me to …

My No. 1 AI Play Now: A Cheap Dividend With 546% Upside

My top AI pick is Digital Realty Trust (DLR), an even better pick-and-shovel play on AI than Crown Castle: the REIT owns 198 data centers and boasts a top-20-client list that’s a who’s-who of the tech (and AI) world:


Source: Digital Realty Trust November 2018 investor presentation

The best part? The dividend! DLR yields just under 4% now, but the real story is its explosive payout growth: up 546% since its IPO 14 years ago!

Heck, this one even kept hiking right through the financial crisis, so you can be sure management knows how to keep your income safe (and growing) in a rocky market:

A Battle-Tested Payout

I fully expect the chart for the next 14 years to look a lot like the chart for the last 14. And as I’ve written before, a rising dividend is the No. 1 driver of share prices, so you can expect this unsung company’s stock to ignite in short order, too.

There’s another reason to buy DLR now: the stock has moved lower this year, while FFO has arced higher:

Share Price and Cash Flow Part Ways

We can thank overhyped fears that rising rates will hurt REITs (a worry that’s easily banished by the orange line in the chart above) for this split, which has left DLR trading at a bargain 17.3-times trailing-twelve-month FFO.

I wouldn’t wait to grab this one. With another big payout hike almost certainly headed our way this winter, I expect DLR’s share price to start gapping higher soon.

4 Surefire Ways to Boost Your Income 4X in 2019

My team and I have zeroed in on 4 other investments pay an average 8% cash dividend as I write. That’s double what Digital Realty pays … and these 8%+ payouts are growing, too!

Think of what that could mean for you: $8,000 a year in dividends on every $100k invested. That’s 4 TIMES what you’d get from the average S&P 500 stock’s payout. Plus, your cash stream grows every year like clockwork!

I call these 4 life-changing buys “dividend conversion machines.”

Why? Because they “convert” the pathetic dividends on your typical S&P 500 stock into gigantic cash payouts.

To show you what I mean, consider my No. 1 pick from this 4-pack of “dividend conversion machines.” It takes the 2% average dividend you’d get from well-known stocks like NextEra Energy (NEE), Union Pacific (UNP) and American Water Works (AWK) and “converts” it into a massive 8.6% cash payout!

Not only that—this perfect retirement play lines your pockets every single month! Check it out:

A Monthly—Growing—8.6% Payout

As I write, thousands of folks across America are quietly collecting big dividend checks from these 4 ignored investments every single month. And you can join them today.

Buying in couldn’t be easier: you can do it straight from your online brokerage account, just like buying the blue chips you know well. But instead of their paltry sub-2% dividends, you’ll kick-start your own 8%+ cash stream!   

Editor's Note: The stock market is way up – and that’s terrible news for us dividend investors. Yields haven’t been this low in decades! But there are still plenty of great opportunities to secure meaningful income if you know where to look. Brett Owens' latest report reveals how you can easily (and safely) rake in 8%+ dividends and never worry about drawing down your capital again. Click here for full details!

Source: Contrarian Outlook

Time to Scoop Up These Three Yieldcos Paying 7% and Higher

Last week was a seriously mixed bag for energy sector fundamentals. The WTI crude oil benchmark tumbled to $56 a barrel, after trading above $70 a few weeks ago. Over the same period natural gas went from $3.00 MMBtu to $4.60.

In recent days, the share values of renewable energy Yieldco stock have also been pulled lower. It seems the market is linking these companies to the plight of California power company Pacific Gas and Electric (NYSE: PGE).

Yieldcos are companies that own renewable power production assets such as wind farms, solar energy facilities, and hydropower production assets. The companies acquire energy producing assets and sell the power to utilities and other end users on long term contracts. They operate as pass-through entities, paying out most of the free cash flow as dividends to investors.

The better Yieldcos look to acquire assets that allow them to grow the dividends. Most have a sponsor company that is either a developer of power production facilities or provides additional financial support for the Yieldco’s growth goals.

Buy These 3 High Yield Clean Energy Stocks While They’re Still Cheap

The prospects of these companies have not changed in the last few days or weeks. Renewables are the growth area of energy production. The Yieldco companies have pipelines of assets in development that allow them to stay on their forecast growth trajectories. If you are an income stock focused investor, now is a good reason to buy low and yield high in the Yieldco group.

TerraForm Power (Nasdaq: TERP) is a $2.3 billion market cap which owns wind and solar power production assets. The company has gone through significant transformation over the last year. In October 2017 Brookfield Asset Management took over sponsorship of TERP and became a 51% shareholder in the Yieldco.

In February 2018, TerraForm made an offer to acquire 100% of Saeta which owned and operated 1,028 megawatts of rate-regulated and contracted solar and wind assets, located primarily in Spain. The $1.2 billion purchase closed in June 2018.

TerraForm’s financial results show the company was coming up short of covering the $0.19 per share dividend for the first two quarters of 2018, building up to 1.15 times coverage. Management has stated a goal of 5% to 8% annual dividend growth going forward, while paying out 80% to 85% of cash available for distributions.

Current yield is 7.0%.

Brookfield Renewable Partners (NYSE: BEP) was operating like a Yieldco long before the term was invented. The company owns 260 hydro power plants, which account for 76% of production. 35% of production is done outside of North America. Also, 90% of power production is purchased on long-term contracts.

BEP owns the 51% of TERP acquired by Brookfield Asset Management. Brookfield Renewable Partners has been publicly traded since 2001 and is the only Yieldco to have an investment grade credit rating.

The company pays out about 70% of CAFD as dividends and has been growing the dividend since 2011. Management guides for 5% to 8% annual dividend growth. Unlike the other Yieldcos discussed here, BEP is a Schedule K-1 reporting company for tax purposes.

The shares currently yield 7.0%.

Clearway Energy (NYSE: CWEN) is another Yieldco that recently went through a change of sponsorship. Clearway was started by utility company NRG Energy (NYSE: NRG).

In the Spring of 2018 the sponsor interests in what was then called NRG Yield Inc. was transferred to Global Infrastructure Partners. CWEN retained the right of first offer on the renewable energy projects in the NRG pipeline.

These projects plus the ability to make outside acquisitions will allow Clearway to be a growth focused Yieldco. The company forecasts 5% to 8% annual distribution growth.

CWEN currently yields 7.8%.

Starting today you can stop worrying about the market and instead fundamentally transform your income stream from a string of near misses to a steady, reliable flow of income right into your bank account.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.

Source: Investors Alley

How to Generate $7,050 in “Bonus” Payouts Next Month

“Buy and hope” traders are, understandably, terrified today. Their portfolios are paying nearly nothing in dividends. Don’t you think fat 10% payouts would put them at ease a bit?

The unfortunate situation for our “B&H” friends is that they bought stocks without a plan to generate cash flow from them. They purchased their shares – probably after much of the decade-long run up – and now must hope that this old bull market is not aging in dog years!

A better idea? Demanding big dividends. After all, without cash flow, what is a stock really worth besides what someone will possibly pay us for it tomorrow?

Secure 10% yields are the “rubber duckies” of the investing world. Mr. Market can push them underwater for a period of time, but eventually, they rocket up to the surface.

My Contrarian Income Report subscribers who smartly stayed with Omega Healthcare Investors (OHI) – a big paying REIT – have done much better than their scared low-yield-collecting friends as well as the broader market in general. The year actually started inauspiciously as OHI announced a dividend “freeze.” The stock slipped. But a freeze isn’t the same as a cut – and OHI didn’t cut. Its payout was well covered by its funds from operations (“FFO”).

The misunderstanding would soon be our gain, as the stock yielded 10% (thanks to years of previous dividend hikes). And anytime that OHI has paid double-digits in the past, it marked a major bottom for the stock. So why would this time be any different?

OHI’s Dividend Limits Its Price Downside

Let’s fast forward to see how OHI rallied off its most recent double-digit “yield high” to return a fast 48% including dividends!

How a 10% Yield Leads to Quick 48% Gains

It’s an income investors’ dream – banking 10% yearly payments without having to worry about a pullback for the pricey (and increasingly wobbly) stock market.

Which makes right now a good time to talk about my two favorite strategies for generating current cash flow from the stock market. Because whether stocks go up, down or meander sideways, I always want my money to be working for me – and paying me regularly (preferably 10% or more per year!)

My 10% Yield Play: High Current Yields

Our Contrarian Income Report portfolio pays 7.6% as I write. This is 4X the payout of the broader market. It means a $500,000 portfolio will pay you $38,000 per year.

That’s a lot better than the S&P 500, which would insult us income investors with its measly $9,000 annual check. But even $38,000 is likely less than your local bartender earns per year.

To earn more than $38K we must follow one of these two high yield trails:

  • “Chase” higher yields of 10% or more.

Bad idea. I can get you a safe diversified dividend portfolio paying 7.6% today. But I don’t see enough double-digit payers to get us above a 10% average responsibly. (How about OHI, you ask? As its stock price has been bid up, its yield has compressed to a still-generous 7.5%.)

  • “Accelerate” dividend growth stocks from 2% payers to 20%+.

This is a special system I’ve developed that allows you to collect “instant dividends” worth 5X, 10X and even 20X more than the yields listed for “first-level investors” on most financial websites. Let me explain.

My 20% Yield Play: The “Dividend Accelerator” for 10X Payouts

The beauty of the Dividend Accelerator is that you can collect “instant income” on every trade. This means you can make exponentially higher returns than what’s possible from just traditional dividends.

Most dividend growth stocks pay low current yields because their stocks are too popular. Investors pay up for their track record and prospects of future growth. But my Dividend Accelerator can fix this yield problem by providing a 3X, 5X or even 10X boost to these payouts.

For example let’s consider utility stocks. If there’s more to this pullback than we’ve seen, then its affinity for utility shares is worth noting. The S&P 500 made its recent high on September 20, but don’t tell that to these pullback-proof issues:

Utility Stocks Act Pullback-Proof

I’ve been down on the utility sector for two years now and have specifically picked on blue chips Duke Energy (DUK)and Southern Company (SO) repeatedly. I don’t have anything against these firms, but I also don’t recommend buying them when their stocks are pricey and their yields are low, as they are today.

But not all utilities are growing so slowly they could be confused with fixed income. There’s a notable exception that leaves these tortoises (and their middling dividends) in the dust.

NextEra Energy (NEE) is the largest developer of renewable energy in North America. The firm has been a fast grower for decades. No wonder it’s increased its dividend for 23 straight years!

And these have been meaningful raises – NextEra has shown up its peers with 149% dividend growth over the last decade (versus just 26% – a fraction of NextEra – for the utility sector’s widely marketed ETF):

Why NEE is the Best Utility to Buy

Thanks to the firm’s most recent payout raise, it now shovels out $1.11 per share per quarter (for 2.6% yearly).

But we can accelerate this payout to 19.5% yearly.

That’s exactly what my Options Income Alert subscribers and I have done together. My readers who sold 10 contracts per trade banked $7,050 in cash payouts without ever having to buy NEE!

$7,050 in Payouts in Just 4 Weeks

We turned NEE into our personal dividend ATM. We simply tapped it anytime I saw a setup that I liked – and then placed the put premiums directly on our pockets.

NEE’s Put Premiums: Weekly Payouts Averaging $1,762.50

These trades were as simple as buying or selling any stock or fund. We simply sold put options on NEE instead of buying or selling the stock itself.

Editor's Note: The stock market is way up – and that’s terrible news for us dividend investors. Yields haven’t been this low in decades! But there are still plenty of great opportunities to secure meaningful income if you know where to look. Brett Owens' latest report reveals how you can easily (and safely) rake in 8%+ dividends and never worry about drawing down your capital again. Click here for full details!

Source: Contrarian Outlook

Buy These 3 High-Yield Stocks to Survive Split Government

The midterm elections left the U.S. with the House of Representatives controlled by the Democrats, Republicans tightened their hold on the Senate, and President Trump has the bully pulpit and veto power. That is a formula for real bi-partisan compromise or a government that will have trouble just passing a budget. I will be a skeptic until proven otherwise.

On the stock market front, a deadlocked government means that stocks will be evaluated more on their fundamentals, and not on whether new government policies will help or hurt. It will be a good time to be a dividend focused investor.

Here are three ongoing economic trends and an income stock that is a way to play each trend.

The Federal Reserve Board will continue to increase short term interest rates. The Fed’s primary goal is to keep the economy from overheating and bring on a high level of inflation. Higher rates will also give the Fed the tool of rate cuts to soften the next recession.

Out in the real world, higher interest rates mean that the recent trend of the preference to rent housing vs. buying a house will continue. Among those that rent, 78% of tenants believe that renting is more affordable than owning, up significantly this year.

AvalonBay Communities, Inc. (NYSE: AVB) is a large-cap apartment REIT. The company develops, owns and manages apartment communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California.

As of the end of September Avalon had direct or indirect ownership interest in 290 apartment communities containing 84,490 apartment homes in 12 states and the District of Columbia. Another 34 communities were in development or redevelopment.

For the 2019 third quarter, the company reported same store net operating income growth of 3.1%. Average blended rent growth was 3.2%. These are strong, sustainable numbers.

The AVB dividend has a five-year average annual growth rate of 8.0%. The current yield is 3.3%.

Growing energy production from renewable sources is supported across the political spectrum. Another factor is that the cost of development of wind or solar power facilities has declined to a level where they are competitive with construction of new traditional fuel power plants.

This means that new renewable energy projects do not need government subsidies to compete. Yieldco types of companies are the final owners of many renewable energy projects. These are great income stocks with built in growth prospects.

Clearway Energy (NYSE: CWEN) is a renewable energy Yieldco where the controlling party recently changed. Clearway was founded as NRG Yield by utility company NRG Energy (NYSE: NRG) and the utility developed renewable projects to sell to the Yieldco.

In August 2018 NRG sold its sponsor interest in NRG Yield to Global Infrastructure Partners (GIP), a private investment company that makes equity investments in a range of infrastructure assets. The change of control does not affect Clearways prospects to continue annual 5% to 8% dividend growth.

Current yield is 6.7%.

Renewable energy is growing, but so is U.S. onshore crude oil production. The growth in oil production from the Permian Basin is truly amazing, going from one million barrels per day in 2011 to 3.5 million bpd in 2018 and a forecast 3.9 mbd in 2019. I have seen forecasts of 7 mbd by the middle of the next decade.

The limiting factor to this oil gusher is pipeline take away capacity to refiners and the Gulf Coast export terminals. The region needs over one million barrels per day of new pipeline capacity – which will come on line in late 2019. By then more pipeline capacity will be needed.

Plains All American Pipelines LP (NYSE: PAA) is the largest independent owner of crude oil gathering assets, pipelines and storage terminals. The company just announced its newly commissioned Sunrise Pipeline is transporting 300 to 350 thousand barrels per day of crude oil out of the Permian to the Texas Gulf Coast.

The Plains business model lets it often collect several fees from a barrel of oil. These can be gathering charges, pipeline fees on more than one pipeline, and storage fees.

This MLP has gone through significant restructuring since the energy market crash of 2015-2016 included a pair of distribution reductions. The 2018 third quarter earnings report shows the company is back on a growth trajectory and should start growing dividends in 2019.

PAA currently yields 5.0%.

Pay Your Bills for LIFE with These Dividend Stocks

Get your hands on my most comprehensive, step-by-step dividend plan yet. In just a few minutes, you will have a 36-month road map that could generate $4,804 (or more!) per month for life. It's the perfect supplement to Social Security and works even if the stock market tanks. Over 6,500 retirement investors have already followed the recommendations I've laid out.

Click here for complete details to start your plan today.