Buy These 5 High-Yielders from Someplace You Wouldn’t Expect

Driven by a strong economy worldwide and rising corporate confidence, global dividends in 2017 reached record levels. Payouts rose 7.7% last year – the fastest pace since 2014 – to $1.3 trillion.

Domestically, payout growth in the U.S. rebounded from a sluggish 2016 when election uncertainty caused companies to hold off their investment and dividend plans. The U.S. posted dividend growth of 6.3% last year compared with just 1.7% in 2016, he said, with a record $438.1 billion in payouts made to shareholders.

However, the star of the dividend show was Asia, according to a study conducted by asset manager Janus Henderson.

Asian Dividend Payouts Soar

Asia-Pacific companies grew their dividends the fastest, climbing by 12.7% in the 12 months to the end of May to a record $283.5 billion, out of a total of $936.8 billion for dividends generated in the rest of the world — dwarfing the growth rate of dividends elsewhere. Between 2009 and 2018, the value of annual dividends paid out by Asian companies tripled, while payouts from the rest of the world doubled in value, according to the study.

This just shows you how the world has changed in 10 years. Back then, many of Asia’s top businesses were growing quickly, but were not worried about paying income to their shareholders. That perception holds today among investors even though many Asian corporate managements have changed their attitudes towards dividends and now pay out generously.

The numbers back up that change in attitude. In 2017, Asia Pacific companies accounted for $1 for every $6 of the dividends paid worldwide, up from just over $1 in every $9 paid out in 2009. A big contributor has been China where dividends payments have grown from just $8 billion in 1998 to $111 billion in 2016.

I believe Asian stocks have more potential for long-term dividend growth than their U.S. counterparts for a number of reasons. Despite the trade war rhetoric, earnings growth among Asian companies has maintained the momentum that started in late 2016, which reversed a three-year trend of deflation and earnings declines for many companies. Asian companies have also weaned themselves from an over-reliance on debt, and today are less leveraged than those in the United States. And of course, the broader Asia growth story and rise of the consumer class is still alive and well.

Valuations among these companies are also far more attractive than they are in the U.S., thanks to U.S. fund selling driving down the prices of most Asian stocks. In other words, U.S. markets have already built huge earnings expectations into many stock prices and valuations are at historically high levels. By contrast, many Asian stocks have already had the worst case trade war scenario built into them.

How to Invest Into Asian Dividend Payers

If you are interested in capturing some of that dividend growth potential from Asian stocks, there are several ways to do it.

The first is an old-fashioned, but effective, way. You can buy a mutual fund from a company whose sole focus is Asia – the Mathew Asia Dividend Fund (MUTF: MATIX). Its top holdings include well-known blue chips such as Taiwan Semiconductor and HSBC.

But it also includes less well-known names to American investors including Shenzhou International Group Holdings, which is the largest knitwear manufacturer in China and makes clothing for Nike and others. Its stock soared an incredible 4200% over the past decade!

The next way for you to access Asian dividends is through exchange traded funds (ETFs). There are several that focus on Asian dividend payers, including the iShares Asia/Pacific Dividend ETF (NYSE: DVYA), the WisdomTree Asia Pacific ex-Japan Fund (NYSE: AXJL) and the O’Shares FTSE Asia Pacific Quality Dividend ETF (NYSE: OASI).

Some of these ETFs (WisdomTree) have familiar names such as Samsung Electronics, Taiwan Semiconductor and China Mobile in them. While others have more of an emphasis on bank and utility stocks. My personal preference would be to go with the ones that have the growth names in them in hopes of capturing a rising dividend stream.

Of course, the final option is to simply buy some of the high-dividend paying stocks such as China Mobile (NYSE: CHL), which listed on the New York Stock Exchange back on October 22, 1997. This stock used to be a high-flyer because of the rapid growth it enjoyed. But now the Chinese phone market is saturated and its stock performs like any other utility.

The company had a payout ratio of 48% in 2017. China Mobile had a final dividend payment of $0.20 per share for the year ended 31 December 2017. Together with the interim dividend payment of $0.21 per share, and a special dividend payment of $0.41 per share to celebrate the 20th anniversary of its IPO, the total dividend payment for the 2017 financial year amounted to $0.82 per share.

Its current yield is 4.66%, although that has been offset by that U.S. fund selling (trade war fears) that has sent the stock down almost 13% year-to-date. So if you’re going to buy the stock, do it piecemeal because the trade war winds are still blowing.

But once again, my preference would be to buy a broad-based fund or ETF that has a number of dividend-paying companies in the portfolio.

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Source: Investors Alley 

Market Preview: Earnings Season Enters Late Innings, But AAPL Still to Bat

For the week of July 30:

After the largest one-day loss of capital by a single stock in history last week with Facebook (FB), investors will be understandably nervous going into the end of earnings season. Monday morning will kick-off with a mix of industrials and tech as Caterpillar (CAT), Seagate (STX) and KLA Tencor (KLAC) report earnings. Analysts are expecting continuing strong numbers from CAT based on continued economic strength and rising commodity prices. Though doing well on the year, Seagate fell sharply after last quarter’s earnings. Investors will be looking for any news on a move to solid state technology many believe the company must make.

The GDP number Friday was strong, coming in at 4.1% growth, but that was not enough to keep the market in positive territory as the weekend approached. Consensus is the large number was due to an avoidance of impending trade tariffs, ant that first-half growth has stolen from second-half numbers. Monday the economic calendar brings a continuation of housing data as Pending Home Sales numbers are released. Those numbers will be followed closely by the Dallas Fed Manufacturing Survey.

Tuesday, the last day of July, we’ll get early numbers from Proctor and Gamble (PG) and Pfizer (PFE) in the morning. Facing “reduced competitor pricing” P&G tanked after earnings last quarter. The stock has regained that loss, but still sits well below where it was at the beginning of 2018.  Pfizer announced a major reorg earlier in the month. Investors will be looking for more color on how this will impact the company moving forward.

Early earnings numbers, as well as the Case-Shiller Home Price Index and Consumer Confidence reports will drive pre-lunch trading. But, by mid-day the market’s attention will turn to earnings from Apple (AAPL), which are due after the close. This is the least interesting quarter annually for Apple, with holiday sales behind it and next year’s lineup yet to hit stores. But, with the impact of the Facebook numbers fresh in their minds, investors may not be willing to hold AAPL shares up going into the close on Tuesday.

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Your Passport to Under-appreciated 7% Yields

Subscribers to my Contrarian Income Report have enjoyed safe yields of 7% or more over time – and enjoyed long-term price stability – thanks to two simple principles:

  1. Buy stocks and funds when they’re out of favor. That way, prices are lower and yields are higher when we make our purchase.
  2. Rely on dividends alone for income. That way, ups and downs in the stock price won’t cripple their usefulness to a retirement portfolio. In fact, we use them in our favor.

2018 hasn’t exactly been up to snuff. Most market experts expected the Trump tax cuts, breakneck economic growth and fat corporate earnings to shoot the market to the moon. Instead, we’ve only managed to advance less than 5% more than halfway throughout the year.

Yet stocks still are grossly overpriced – the byproduct of this practically ancient nine-year bull market. Finding quality 7%-plus yields in the American markets is difficult enough, but finding them at a decent price?

Good luck.

My advice? Don’t beat your head against the wall – think around it. In this case, if America’s high yielders are bloated, look outside the U.S.

Here’s a poorly guarded secret that many investors still aren’t wise to:

International blue chips often yield just as much if not more than their American counterparts. And because information on these companies isn’t as easy to come by as U.S. blue chips, they can go under the radar and be undervalued as a result.

Better still: Trade-war rhetoric has been holding back many international stocks as well, providing even juicier buy points and inflating yields.

That’s a perfect scenario for shrewd opportunists like you and me.

Let’s dig in. Here are five international stocks yielding between 6% and 8%:

China Petroleum & Chemical Corporation (SNP)
Country: China
Dividend Yield: 7.3%

China Petroleum & Chemical Corporation (SNP), more simply known as Sinopec, is China’s largest energy company at more than $110 billion – larger than America’s ConocoPhillips (COP), for context. This is a fully integrated petroleum and natural gas company that also deals in oil refining, petrochemical products, chemicals, electrical and mechanical equipment, gas stations, even production of steam.

And this energy titan is putting together a gangbuster 2018 that has it up 18% versus a 7% loss for the iShares MSCI China ETF (MCHI).

The company in April delivered its best quarterly earnings report in nearly three years. Profits jumped 12% to 19.31 billion yuan ($2.87 billion), on revenues of 621.3 billion yuan ($92.2 billion), up 6.7% year-over-year. Much of that profit was built on the back of higher processing margins – something that has lifted several of China’s energy firms.

And a month earlier, the company proposed a record 0.5 yuan (7.4-cent) dividend for 2017. That would be its largest dole since going public in 2000.

The company clearly is making shareholder rewards a priority. That, its energy dominance, and its new investment project in industries including new energy, energy conservation and environmental protection, makes SNP one of the better blue-chip plays in this sector.

Sinopec Is Building a Head of Steam

Enel Generacion Chile S.A. (EOCC)
Country: Chile
Dividend Yield: 6.6%

Enel Generacion Chile S.A. (EOCC) gives you almost exactly what you would expect from a utility company in an emerging market: high yield, but a lot more instability than you’d get from an American utility. To wit: EOCC shares have lost more than a quarter of their value in 2018 … but that has driven the stock’s yield to well north of 6%.

Enel Generacion, the product of a massive restructuring, is a Chilean power producer that’s very sustainable in nature – 55% of installed capacity coming from hydroelectric. The company produced a little more than 17,000 gigawatt-hours of electricity in 2017, though that extended a string of declines dating back several years.

The prospects for Enel seem generally bright, given that the Chilean Energy Ministry projects 6%-7% electricity demand through 2020, and given that Chile is trying to push more of its electricity production to renewable resources. Moreover, the vast majority of its customers are regulated in nature, which should provide some level of stability.

Nonetheless, like almost everything else in Chile, Enel’s fates are at least somewhat tied to the all-important copper industry – an electricity-intensive process. And the past couple years or so have been marred by fears of strikes at several of the country’s major copper facilities, including current worries about the giant Escondida mine.

The optimist in me says maybe, perhaps, possibly, EOCC could be a contrarian high-yield play that will bounce back once copper-production fears are in the rear-view. But the pragmatist in me says that if you’re going to fish in the utility space, you’re looking for the kind of dependability that this emerging-market power producer simply can’t provide.

EOCC: This Isn’t the Kind of Steady You Want

Vodafone Group (VOD)
Country: United Kingdom
Dividend Yield: 7.6%

Investors used to the low-growth, high-yield nature of American telecoms such as AT&T (T) and Verizon Communications (VZ) should know that industry players look awfully similar in other parts of the planet. That includes the U.K., where Vodafone Group (VOD) rules as one of the globe’s largest telecommunications providers – and one of the best-yielding blue chips on the market.

While Vodafone has British headquarters, its operations span not just Europe, but Asia, Africa and Oceania, too, All told, it boasts the second-highest number of customers behind only China Mobile (CHL).

In fact, its presence in many emerging markets is exactly what makes Vodafone a bit more exciting than the AT&Ts and Verizons of the world. Specifically, Vodafone India in 2017 announced it would be merging with India’s Idea Cellular. Once finalized, the combined entity will be country’s largest telecom, covering 380 million users and representing 40% of the industry’s revenues.

Vodafone isn’t a serial dividend raiser like AT&T and Verizon. But it has kept its payout relatively stable over the past decade or so, excluding a massive one-time dividend in 2014 resulting from the company’s stake in Verizon Wireless, its joint venture with Verizon Communications.

That high yield, plus better-than-you’d-expect growth prospects, make Vodafone a clear candidate for new money.

City Office REIT (CIO)
Country: Canada
Dividend Yield: 7.4%

A list of high-yield stocks wouldn’t be complete without a real estate investment trust (REIT).

However, while City Office REIT (CIO) can be found north of the border in Vancouver, Canada, its operations are entirely American in nature. The REIT invests in Class A and B office properties in the metro areas of seven cities: Dallas, Denver, Orlando, Phoenix, Portland (Oregon), San Diego and Tampa. The company targets attributes such as high-credit-quality tenants and excellent access to transportation, and its contracts include rent escalations – good for investors seeking out safe, reliable growth over time.

And they’ve gotten it … sort of.

When Will City Office REIT’s (CIO) Price Catch Up?

The top line – and more importantly, funds from operation (FFO) – have been accelerating over the past few years. In its most recently reported quarter, FFO improved by nearly 8%.

That said, the share price hasn’t at all reflected the company’s progress over the years, essentially running flat over the past five years. Perhaps that’s at least a little because the company has kept its dividend flat in that time, perpetually stuck at 23.5 cents per share. But at this point, the value proposition is starting to kick in, with the REIT offering a 7%-plus yield for roughly 11 times FFO.

Expect investors to eventually correct this mistake.

Westpac Banking Corporation (WBK)
Country: Australia
Dividend Yield: 6.5%

Americans get the short end of the stick when it comes to financial-industry dividends. The Financial Select Sector SPDR ETF (XLF) yields a paltry 1.7% right now – below the market average, and not even close to the 10-year T-note.

Pull out your passport, and you get a different story. Just look at Canadian stocks such as Bank of Montreal (BMO)and Bank of Nova Scotia (BNS) hover around the 4% area, while British banks HSBC (HSBC) and Lloyds Banking (LYG) deliver closer to 5%.

In Australia, Westpac Banking Corporation’s (WBK) 6%-plus represents one of the highest banking yields on the planet. But it might be a yield trap.

The performance of Westpac, like most banks, is in part tied to domestic growth, and Australia’s GDP is poised to come back (the IMF estimates 3% growth) after a disappointing 2017 (2.3% growth). That’s the good news.

The bad news is that the brewing trade war between the U.S. and China could undo some of that progress, and already has done a number on Australian stocks. A Citi study says a trade war could potentially shrink Australia’s economy by about $21 billion and push down the value of the Australian dollar, hurting the average household there by about $1,500 annually.

Westpac also is suffering a major PR hit at the hands of the Banking Royal Commission, which is investigating the country’s largest banks. Westpac has found to have “defective lending controls”; the commission also uncovered an ugly incident in which Westpac filed a claim against an ailing aging pensioner.

But keep an eye on WBK. If the U.S.-China saber-rattling dies down, this high-yield Aussie stock might be poised to claw back its 10% losses from 2018 – and perhaps more.

How to Pocket 15% to 20% (No Passport Required)

If you’re like millions of Americans looking to push your income “the last mile” to wealth and happiness, these 6%-8% payers are a good place to start.

But if you don’t want to spend your days scouring the globe for safe income, your timing is PERFECT.

Because this Wednesday, July 25, at 2 p.m., I’m going to reveal my Dividend Accelerator system to a select group of investors in a FREE live webinar, and I want to give YOU a VIP pass!

This is the exact same system I use to juice my own portfolio to create a safe, steady stream of 15% – 20% income.

Here’s what you’ll learn in this unique 60-minute online event:

  • How to use my proven income system to build a $5,000-a-month CASH income stream. That will put you on the road to an extra $63,720 by next summer!
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Is The Housing Market About To Hit A Top?

I don’t spend a lot of time writing about real estate in this space. It’s not that it isn’t important, in fact it’s quite the opposite. Of all the sectors most impacted by a change in interest rates, real estate is at the top of the list.

However, I just don’t find real estate that interesting compared to options trading. Housing prices tend to be slow moving, and unlike options trading, there just isn’t a lot of action involved with investing in the real estate market.  However, what if we combined the two areas… real estate and options trading? Now we’re talking about a topic I can relate to.

Of course, we can’t trade options on individual mortgages – and derivative trading on groups of mortgages is generally an OTC market limited to institutions. (Let’s not even mention that derivative trading on mortgages is a big reason why we had the financial crisis of 2008-2009.)

Fortunately, ETFs have emerged which allow investors and traders to get easily involved with real estate and mortgages. REITs tend to focus more on the mortgage side of things, while real estate ETFs often invest in stocks such as homebuilders and storage companies, as well as REITs.

Probably the most popular real estate ETF is iShares Dow Jones US Real Estate ETF (NYSE: IYR). IYR trades over 8 million shares a day on average and almost 20,000 options. As you can see from the chart, IYR has done very well the last few months (in line with the overall real estate market).

However, could real estate – especially housing prices – be in trouble in the coming months? Higher interest rates generally slow or stall the increase in housing prices (due to more expensive mortgages). Are expected rate increases going to derail the bull market in housing?

Let’s look at the options market for clues…

A large trade in IYR last week could suggest the real estate sector could take a downturn by the beginning of 2019. Or, perhaps a big investor is hedging his or her exposure to real estate. Either way, it’s worth paying attention to this trade.

More specifically, the trader bought a large put spread in January 2019 options with IYR at $80.60. The trader spent $1.15 to buy the 72-77 put spread (buying the 77 strike, selling the 72) strike a total of 15,000 times for a cost of $1.7 million. Max loss on a debit spread like this is simply the premium paid, aka the cost of the spread.

The breakeven for the trade is at $75.85 (77 long strike minus the cost of trade or $1.15). Max gain is at $72 or below by expiration and is the spread width (5) minus the cost of $1.15, or $3.85. In total dollar terms, the trader can make $5.8 million on the trade.

Whether this is a hedge against a long position or a bet that IYR is going lower, it is quite a lot to spend. Someone is, at the very least, concerned that IYR could lose 10% by early next year. That would be a pretty sizeable down move in the real estate market. If you have similar concerns or believe housing prices are going to peak in the next few months, this is a reasonable way to get almost six months of time for the thesis to play out.

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Source: Investors Alley

Wall Street Preview: Onslaught of Earnings Continues Mid-Week

Earnings, earnings and more earnings will drive investor sentiment today and Wednesday. Several stocks may get attention as “canaries in the coal mine” for what impact the trade wars are beginning to have. Not normally a bellwether, Canadian National Railway (CNI) may merit more attention than usual today. Investors will be listening to conference call commentary for sentiment changes due to recent tariffs.

Color on international sales will also be front-and-center when Harley-Davidson (HOG) reports today and Coca-Cola (KO) reports tomorrow. Harley has recently come under the ire of President Trump for moving some production to the EU to offset tariffs. Coke may also give some indication of whether foreign sentiment toward the trade wars is beginning to weigh on earnings.

Much of Wednesday will be devoted to Facebook (FB). Investors will want even more assurances of data safety, even as the company blankets airways with advertisements meant to assuage FB users. If Facebook can blow away ad revenue numbers, which they’ve been trying to jolt with their latest algorithm updates, it will go a long way toward appeasing investors.

The rest of Wednesday will see earnings from heavy hitters Visa (V) in the financial sector, General Dynamics (GD) and Northrop Grumman (NOC) in defense, and Boeing (BA) in aviation.

And finally on the earnings front, investors will be looking to see if Boeing can continue to benefit from increased passenger jet orders without facing headwinds caused by the potential for trade wars.  Earlier this month, Boeing announced increased orders for its 737 and 787 but decreased demand for the 777.

The economic calendar for Tuesday and Wednesday is relatively light, allowing the market to remain focused on earnings. Most notable are mortgage applications and new home sales released Wednesday morning. A low housing supply and increased prices slowed sales in the first half of the year. But, Freddie Mac expects conditions to improve the rest of the year and is predicting 2.5% growth in combined new and existing sales.


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5 Best CEOs by Stock Market Returns

Source: Shutterstock

Do you watch Shark Tank, the show that replicates a tricycle version of what real venture capital is like? Well, on Shark Tank, the investors (or “sharks”, as they are called) are always talking about investing in people. By that, they mean they are investing in entrepreneurs who they know will succeed because of their personality, drive, skills, intellect and/or passion.

That is easy to do in venture capital. But, it is much more difficult to do in the public markets. After all, it isn’t everyday that you are rubbing elbows with a Fortune 500 CEO.

So how do you determine who are the best CEOs in the stock market?

Look at their track record. See what they’ve done. See what they’ve said. And, most importantly, see how their stock has done while they’ve been at the helm.

With that in mind, here’s a list of five of the best CEOs in the stock market, as determined by compounded annual average return in their company’s stock price while they’ve been the boss.

Best CEOs by Stock Market Returns: Mark Zuckerberg, Facebook (FB)

Best CEOs by Stock Market Returns: Mark Zuckerberg, Facebook (FB)

Source: Shutterstock

Compounded Annual Returns: ~32%

Social media giant Facebook (NASDAQ:FB) went public on Wall Street at $38-per-share in May 2012. Fast-forward six years and two months, and Facebook stock trades around $210 today. At the helm the whole time was founder and CEO Mark Zuckerberg.

That means that under Zuckerberg’s tenure as CEO, Facebook stock has seen its public value grow by over 30% per year. That is an impressive clip.

But, it shouldn’t be any surprise. Zuckerberg is the boy-genius founder of Facebook, turned corporate-leader of one of the world’s most dominant companies. He is constantly working to improve the products within Facebook’s ecosystem (Marketplace and Workplace), looking for strategic acquisitions (WhatsApp and Instagram), studying new technology (cryptocurrencies) and rolling out features which, even if he didn’t invent them, his platforms implement best (Stories).

Thus, so long as Zuckerberg remains at the helm of the Facebook growth machine, this stock should continue to produce in excess of 30% returns per year.

Best CEOs by Stock Market Returns: Reed Hastings, Netflix (NFLX)

Best CEOs by Stock Market Returns: Reed Hastings, Netflix (NFLX)

Source: Shutterstock

Compounded Annual Returns: ~47%

There is the famous story of Netflix (NASDAQ:NFLX) founder and CEO Reed Hastings sitting in a hot tub with a friend in Santa Cruz in 2012 when Hastings shared with his friend that he was considering splitting the DVD and streaming business of Netflix. His friend told him it was a bad idea. And, initially, it was.

But, Hastings’ idea proved to be revolutionary. Over the next several years, streaming became the hottest trend. And Netflix, with the biggest streaming platform in the world, became the hottest company.

Then, everyone started to question Hastings again when the company decided to invest best in original content in 2015. But, over the past several years, original content has become the hottest trend in streaming. And Netflix, with the biggest original content portfolio, has once again become the hottest company.

In other words, Hastings always seems to be on the frontier of what is coming next in the entertainment industry. That is why NFLX stock has risen by nearly 50%-per-year under his tenure.

These big gains should continue so long as Hastings and Netflix continue to be the innovators in the dynamic entertainment industry.

Best CEOs by Stock Market Returns: Satya Nadella, Microsoft (MSFT)

Compounded Annual Returns: ~31%

In the first half of this decade, Microsoft (NASDAQ:MSFT) looked like an antiquated technology company with its feet stuck in cement. Innovation wasn’t happening. Growth wasn’t there. And MSFT stock was stuck in neutral.

Then, Satya Nadella came along. He took over as CEO in February of 2014, when the stock price was just a hair above $32. Since then, MSFT stock has soared to all-time highs of right around $107, implying compounded annual returns in excess of 30%.

How did Nadella do it? He focused on the cloud.

Microsoft had a bunch of valuable assets like Microsoft Office. They were just being distributed the old-school way via disks and chunky installation packages. So, Nadella took all those assets, moved them to the cloud, and created cloud-hosted software services.

That transition has played out beautifully. Now, revenue growth and margin growth are accelerating higher and Microsoft’s future looks brighter than it arguably ever has.

So long as Nadella continues to push cloud innovation through Microsoft’s huge business, then MSFT stock should be a lock for solid long-term gains through global cloud market expansion.

Best CEOs by Stock Market Returns: Jeff Bezos, Amazon (AMZN)

Best CEOs by Stock Market Returns: Jeff Bezos, Amazon (AMZN)

Source: Shutterstock

Compounded Annual Returns: ~43%

Jeff Bezos didn’t become the richest man on the planet by accident. He did so by pioneering a new way of commerce, and in so doing, propelled Amazon (NASDAQ:AMZN) from a $300 million start-up in 1997 to an $880 billion global retail and cloud powerhouse today.

Bezos did that by being ruthless along the way (interestingly enough, directs to He was ruthless on pricing, cutting prices on Amazon to near break-even so as to out-price competitors. He was ruthless on perks, throwing in things like free shipping so as to one up the competition. And he was ruthless on market expansion, buying giant enterprises like Whole Foods and attempting to disrupt the grocery market right after disrupting the mall retail market.

As a result of this ruthless growth strategy, Bezos has led Amazon to being the world leader in the booming e-commerce and cloud markets. Both of these markets have a lot of firepower left. Plus, Bezos will likely be just as ruthless in dominating the pharmacy, logistics, and cosmetics markets, too.

All together, this is a big growth company with a big growth oriented leader who has a great track record of success. Thus, if you are looking for a strong stock with a strong CEO, there aren’t many out there that the fit the bill quite like AMZN.

Best CEOs by Stock Market Returns: Elon Musk, Tesla (TSLA)

Compounded Annual Returns: ~43%

He may be controversial, and he may rub you the wrong way on social media. But, you can’t argue with results when it comes to Tesla (NASDAQ:TSLA) founder and CEO Elon Musk.

Tesla went public at $17-per-share in June 2010 as a nascent electric vehicle company with big aspirations. Today, eight years and a month later, Tesla stock trades above $300-per-share, and is widely considered to be the world’s leading and premiere electric vehicle company. Those are impressive leaps and bounds, and they happened in such a short amount of time and despite frequent interruptions from Musk’s Twitter (NYSE:TWTR) feed.

Going forward, I think the best way to look at Musk is a mad genius. He does some mad things. But, he’s also a genius creating the future of transportation and energy. As an investor, it is best to forget the mad part. Focus on the genius part. That is the only part that shows up in financial statements.

TSLA stock has been under hot water recently due to Model 3 production ramp issues and credit concerns. But, in the big picture, these risks are over-stated. Longer-term, Model 3 production will ramp, credit concerns will disappear, and this company will emerge as the leader in what will inevitably be a massive electric vehicle market.

As of this writing, Luke Lango was long FB, AMZN, and TSLA. 

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.

3 High-Yield Stocks Increasing Dividends in August

When interest rates start to go up, investors worry about the value of their higher yield dividend stocks. A defense against higher interest rates is to own dividend stocks that will grow the dividend payments. The challenge is to know in advance which stocks will make a higher dividend announcement before the rest of the market finds out.

Real estate investment trusts (REITs) pay attractive current yields and regularly increase their dividend rates. I maintain a database of about 140 REITs, out of which about 100 have histories of dividend growth. Most of these companies increase the quarterly dividend once a year, and then pay the new rate for the next four quarters.

Even though individual REITs increase their dividends just once a year, those announcements are spread across almost every month of the year. To capture those share price gains, you want to buy shares a few weeks to a month before the next dividend increase announcement is published. Now in mid-July, it is a great time to look at those REITs that should increase dividends in August.

Here are three REITs from my database that historically have boosted their payouts in August.

Federal Realty Investment Trust (NYSE: FRT) is a $9 billion market cap REIT that owns, operates, and redevelops high quality retail real estate in the country’s best markets. FRT has increased its dividend for 50 consecutive years, the longest growth streak of any REIT.

Over the last 5 years, the average annual dividend increase has been 6.55%. Last year the dividend was increased by 2.0%. Based on management guidance, an increase close to the 5% annual average is in the cards for this year. The company announces its new dividend rate in early August. The ex-dividend date will be in mid-September with payment about a week later.

The FRT share price is down by 4% over the last year. This is a very high-quality REIT currently on sale. The stock yields 3.25%.

Eastgroup Properties Inc (NYSE: EGP) is a $3.3 billion market value REIT that focuses on development, acquisition and operation of industrial properties in major Sunbelt markets throughout the United States with an emphasis on the states of Florida, Texas, Arizona, California and North Carolina. Industrial properties is currently one of the best performing real estate sectors.

The company has increased its dividend for 22 of the last 25 years, including the last six in a row. Last year the payout was increased by 3.3%. This year my forecast is for a 5% to 7% increase. The new dividend rate should be announced in late August or early September, with a mid-September ex-dividend date and end of the month payment date.

EGP yields 2.7%.

Healthcare Trust of America, Inc. (NYSE: HTA) is a $5.4 billion REIT that acquires, owns and operates medical office buildings. The company reduced its dividend in 2012 and 2013, which was followed by small increases in each of the next four years. Last year the dividend was bumped up by 1.7% which is comparable to the increase of the previous year.

In 2017, the funds available for distribution per share increased by 1.2%, and for the 2016 first quarter, FAD per share was flat compared to a year earlier. Management has been very conservative with the dividend growth and I expect a small increase comparable to the last couple of years.

Last year the new dividend rate was announced in early August, with an end of September ex-dividend date and early October payment date.

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.

Source: Investors Alley 

5 Hot Stocks Today (That Could Crash Tomorrow)

Source: Shutterstock

Let’s admit it. We’re all fascinated by the stock market’s hot stocks, aren’t we? That doesn’t mean we’re adrenaline junkies hopping from bandwagon to bandwagon. But it can be mesmerizing to see a stock double, triple or quadruple in a short period of time.

While we’re on the topic then, we’re all on the hook for owning some real duds too, right?

So we wanted to combine the too and look at some hot stocks that could have the potential to be duds in the future.

By “duds” we don’t necessarily mean bankrupt or stocks that are heading to the over-the-counter exchange. Rather, we’re looking for stocks that are hot now but might cool off.

Hot Stocks For Now: Bausch Health (BHC)

hot stocks to fall -- BHC

It was probably a good idea to change its name from Valeant Pharmaceuticals to Bausch Health Companies (NYSE:BHC) given the former’s fall from glory. Shares went from more than $250 to below $10.

It’s actually been pretty hot, despite BHC carrying a tainted reputation. With a 52-week high of almost $28 though, shares have nearly tripled from their one-year lows.

The latest quarterly results inspired some confidence with an earnings and revenue beat. However, I’d be leery of the name still. Revenue fell 13% year-over-year (YOY), while net income dropped more than 33%. Operating cash flow decreased as well.

But let’s give credit where credit is due. After once carrying ~$30 billion in long-term debt as of year-end 2016, BHC has since cut that figure down to $25.25 billion. It’s a decent reduction and proof that management is at least trying to turn things around.

However, with just an $8 billion market cap, we’re still talking a lot of leverage and overhang here. Those who hate on Tesla (NASDAQ:TSLA) should realize it has a $55 billion market cap and “just” $11 billion in debt.

Hot Stocks For Now: Bitcoin Investment Trust (GBTC)

hot stocks to fall -- GBTC

I know what you’re thinking, “The Bitcoin Investment Trust (OTCMKTS:GBTC) has already fallen a ton!”

That’s true, as GBTC topped out around $35 back in December. Of course, it’s no surprise that that’s when bitcoin also hit its top, given that the GBTC tracks the price of bitcoin. While GBTC could soar should the cryptocurrency regain its momentum, investors should be leery of its near-50% rally over the past few weeks.

For starters, bitcoin has been highly volatile and under a lot of pressure so far this year. Bulls can make a case for owning it, but the GBTC shouldn’t be a way to do it. This fund trades at a more than 50% premium to its net asset value (NAV).

What does that mean? The price of the fund, which charges a way-too-high 2% annual management fee, trades at a 52.7% premium to the current bitcoin price. Were the fund to liquidate, its value would plummet.

Sorry crypto lovers, I’m not a buyer of GBTC.

Hot Stocks For Now: Fossil (FOSL)

hot stocks to fall -- FOSL

Man, Fossil Group (NASDAQ:FOSL) has been on fire. The company has gotten its act together a bit and has been cutting down debt. But does it warrant a 500% rally?

Within the last 12 months, shares traded for as low as $5.50. Fossil stock recently topped out near $32 just last month and the 50-day moving average is acting as support as we speak. Trend-line support is also in play.

Look, I’m not saying I’d lever up on a short position in FOSL, but I would be questioning the run. The company is expected to lose money this year, before earning just 37 cents per share in 2019. That means FOSL stock trades for more than 70 times next year’s earnings. Further, sales are expected to decline this year and next year.

Fossil also does not pay a dividend.

It’s no wonder momentum traders are sticking with FOSL. The stock has the wind at its back and it’s a low-market-cap stock that’s easy to push. That said, I’d look for more quality investments for long-term holders.

Hot Stocks For Now: Netflix (NFLX)

hot stocks to fall -- NFLX

Netflix (NASDAQ:NFLX) is certainly a controversial pick for this article. This FANG stud has outperformed Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN) and Alphabet(NASDAQ:GOOG, NASDAQ:GOOGL) this year and over the past 12 months. It’s taking over the world with its streaming platform and is disrupting one of the world’s largest industries.

So this isn’t to say load up a short position or don’t ever buy it. But it’s important to point out its flaws.

The stock is still up a whopping 132% over the past year and an insane 95% so far in 2018. However, on Monday Netflix reported quarterly results. Despite beating on earnings, it missed on revenue estimates. Even worse, second-quarter subscriber growth was worse than expected — far worse, actually.

That follows four straight quarters of obliterating subscriber expectations. This isn’t a case of analysts getting overzealous either. The guidance from Netflix management was similar to consensus estimates too. Even worse though? Management’s guidance for third-quarter subscription growth was well below expectations too.

At first, NFLX paid the price, down 14% in early trading following the results. But investors immediately bid up the stock, dismissing the miss-and-miss on estimates and guidance.

So what gives? Bulls used to argue that the story isn’t about earnings or cash flow right now. Instead, it’s all about subscriber growth. That’s what fueled shares higher more than 100% on the year, despite Netflix spending half of its expected revenue on content in 2018.

Now that subscriber growth is disappointing, we’re what, going to buy the dip again?

Maybe so. But Netflix just showed some cracks, even though the stock’s not acting like it. Maybe this is the wrong gut feeling to have, but I wouldn’t be surprised to see NFLX revisit its recent lows.

Hot Stocks For Now: Riot Blockchain (RIOT)

hot stocks to fall -- RIOT

Riot Blockchain (NASDAQ:RIOT) thought it could change its name to something crypto and it would solve all of its problems. Unfortunately, some investors surely got taken for their money, as shares ran from ~$3.50 to more than $45 between August and December 2017.

Even worse, its CEO unloaded more than 30,000 shares near $28 in December too.

Some may dismiss Riot being on this list because it’s related to blockchain and crypto. They may argue ignoring it near $6 is a crime in itself. I am not one of those believers though, at least when it comes to RIOT.

While the stock fell 9% on Wednesday, it follows a near-40% one-day rally earlier this week. The technicals are still terrible, the company trades at a laughable 65 times its 2017 sales and makes no money.

So do you short this work of art? Of course not. Because a rally — however ridiculous it may seem — could more than double the stock. We’re looking for quality stocks to own, not lottery plays at the casino.

And some may wonder, “how is this a hot stock that could become a dud,” especially when RIOT has gone from $30 to $6 in the last seven months? Because it’s up 40% this week and its 52-week lows are still far below current levels.

Admittedly, a bitcoin rally could heat up RIOT. But if you want exposure, just stick to crypto.

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.

Source: Investor Place

Congressional Hearings Show Appetite for Smart Crypto Regulations

Earlier this week, I visited my old stomping grounds in Washington, D.C. to cover a pair of Congressional hearings about cryptocurrencies.

If you’ve never been to a Congressional hearing, you should try to attend one. They’re actually open to the public. And there’s no need to sign up or get tickets. But show up early! Seating is extremely limited. At the House Committee on Agriculture, there’s room for about 25 spectators – not including a press table that seats about six reporters (that’s where I was). At the House Financial Services Committee, there’s room for about a dozen spectators. The remaining dozen chairs are reserved for Congressional staff and reporters.

I’ve covered my share of House and Senate hearings – and it never gets old. The rooms that hold these meetings are impressive, awe-inspiring and intimidating. And that’s by design.

The witnesses testifying before Congress are typically the smartest, most accomplished professionals in their field. Members of Congress are not usually described that way.

That’s why the legislators sit on raised platforms and desks while the witnesses testifying before them sit at the bottom of the room, staring up at the bright lights and people in power. It’s a power play – a not-so-subtle reminder that it doesn’t matter how rich or accomplished you are. In that moment, you are answering to Congress.

If you think that such an obvious and dramatic power play wouldn’t rattle truly accomplished people, think again. As I talked to the crypto experts who testified on Wednesday, their reactions ranged from “that was terrifying” to “well, that could have gone worse.”

So how did the “crypto double-header” go on Wednesday? Actually, way better than expected.

For the first time, there seems to be an emerging consensus from the crypto industry about how cryptocurrencies should be regulated. Even better, the suggested framework was either tacitly accepted or (at worst) unchallenged by the politicians in attendance.

In oral and written testimony to the Agriculture Committee, Perkins Coie Managing Partner Lowell Ness outlined a two-phase approach to regulating cryptocurrencies (emphasis mine):

  1. Pre-Functionality – Until the token achieves full functionality, offers and sales of tokens would generally constitute investment contract type securities under Howey, unless a reasonable purchaser is purchasing with consumptive intent. In this case, the token should generally be treated as a security unless use of the token (as opposed to resale) is reasonably certain.
  2. Full Functionality – Once the token achieves full functionality, offers and sales of tokens would generally not constitute investment contracts under Howey. Software networks, however, generally require ongoing updates and upgrades, so it may be appropriate to create limited but ongoing investor protections.

This regulatory approach to cryptocurrencies is both innovative and remarkably practical. It allows for cryptocurrencies to be defined as securities (and regulated by the SEC) when they’re being created and developed. Once the development phase is over, so is the “third party” work that adds value to the coin (that’s the Howey test at play). At that point, the cryptocurrency becomes a commodity and can be traded without SEC oversight.

This new “hybrid” asset class formalizes a conclusion the SEC has already reached about ethereum. Here’s what the SEC’s corporate finance division director, William Hinman, said about ethereum in a speech in San Francisco (emphasis mine):

And putting aside the fundraising that accompanied the creation of ether, based on my understanding of the present state of ether, the ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions. And, as with bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value.

Reading between the lines, the SEC’s view of ethereum matches up pretty nicely with the proposed regulatory scheme. In the minds of the regulatory agency, when ethereum was in its development phase, its initial coin offering (ICO) constituted a sale of securities. The coins were an investment that investors hoped would rise in value based on the work/efforts of a third party. But once ethereum launched, its decentralized nature and usage made it a commodity.

If this seems like pretty technical stuff, well, it is. But it’s also critically important. The marketplace needs clarity and certainty in order to mature. It also needs a light regulatory touch. Anything less than that will stifle growth. And this path potentially walks that tightrope.

In many ways, Wednesday’s hearings mark a sea change in the government’s approach to cryptocurrencies. It was a significant effort to create a positive, constructive framework for cryptocurrencies.

At previous crypto hearings, much of the discussion (by politicians) centered on people using bitcoin for nefarious purposes like money laundering, dodging U.S. sanctions, smuggling drugs and whatever other shady activities people could think of.

And there was still some of that on Wednesday. Over at the House Financial Services Monetary Policy and Trade subcommittee hearing, Rep. Brad Sherman (D-Calif.) said:

There is nothing that can be done with cryptocurrency that cannot be done with sovereign currency that is meritorious and helpful to society. The role of the U.S. dollar in the international financial system is a critical component of U.S. power. It brought Iran to the negotiating table… We should prohibit U.S. persons from buying or mining cryptocurrencies… As a medium of exchange, cryptocurrency accomplishes nothing, except facilitating narcotics trafficking, terrorism and tax evasion.

Sherman wasn’t the only member of Congress who shared that sentiment. Fortunately, it’s both laughable and provably false. As Andreessen Horowitz Managing Partner Scott Kupor noted in the Agriculture Committee hearing, the digital trail created by bitcoin allows law enforcement officials to track down criminals – including Russian hackers.

Sherman (and others like him) is now the outlier in Congress. Even his fellow subcommittee members looked like they were just humoring him because he put on a good a show. Far more prevalent was the approach of Agricultural Committee Chairman Mike Conaway (R-Texas):

For the first time, we have a tool that enables individuals to reliably exchange value in the digital realm, without an intermediary. We can have assets that exist – and can be created, exchanged and consumed – in digital form. The promise of being able to secure property rights in a digital space may fundamentally change how people interact with one another. This technology holds the potential to bring enormous benefits to each of us, if we are willing to give it the space to grow. Providing a strong, clear legal and regulatory framework for digital assets is essential.

We’ve moved from the “bitcoin is bad” era to the bitcoin acceptance era. That’s a huge step forward. Let’s celebrate that before we think about the next step – getting Congress to pass crypto-friendly legislation.

Good investing,

Vin Narayanan

Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

The Next Recession: When It Will Happen and How to Prepare

I’ve been thinking a lot about recessions lately.

It’s pretty hard not to, because warnings about recessions are coming from financial pundits and big banks with increasing frequency. Most recently, an economist at Citigroup warned in a research note that a recession was likely to come in the next 18 months, because the US Treasury yield curve is flattening.

This person isn’t a lone wolf.

Many economists, including a lot of wonks at the Federal Reserve, are fiercely debating whether our flattening yield curve is a sign that a recession is around the corner. And the fear is intensifying, since the difference between the yield on the two-year and 10-year Treasuries is a meager 25 basis points, the narrowest in over a decade.

This panic isn’t new—and it’s exactly wrong. For instance, Morgan Stanley was warning investors that a flattening yield curve was a serious risk back in 2015, meaning, in their view, that a recession was likely in the next couple years.

They were wrong.

That year, the world’s GDP rose 3.2%, then rose again, by 3.1%, in 2016, according to the International Monetary Fund. The US didn’t do too badly, either, growing 2.6% and 1.6% in those years, with additional 2.3% GDP growth in 2017 and over 3% GDP growth expected for 2018.

The economy’s improving growth shows that we aren’t anywhere near a recession, and, as I wrote in a June 20, 2017, article, it signals a great time to buy stocks. (The S&P 500 is up 17% since that article was published.)

Strong stocks and higher GDP growth are a far cry from Morgan Stanley’s warning. “Recessions follow expansions like night follows day,” warned the bank’s chief global strategist of emerging market equities, Ruchir Sharma, at a Bloomberg summit in 2015.

Except they don’t.

Nights follow days at regular intervals governed by the laws of physics. Recessions follow expansions because of human nature, and human nature is impossible to predict. Sharma’s grave warnings from two years ago prove the point.

49 Recessions—and Holding

Where does the seven-year myth come from? Recent history.

In 1969, 1990 and 2008, there were three recessions that were about seven years apart. We also saw a 2001 recession that came a decade after the previous one—near enough to seven years if you’re not looking too closely.

But that’s a misleading selection because we also saw recessions in 1973, 1980 and 1981 that weren’t anywhere near seven years after the preceding one. You could try to fudge the numbers to make them fit, but an even closer look at history shows just how foolish that would be.

Let’s take a look at the full list of every recession in US history.

That’s a long list!

In America’s near 250-year history, there has been no shortage of crises and panics. But the good news is that they’re getting further apart. It’s almost as if the economy is getting more efficient and businesses are getting better at avoiding downturns.

If you lived through 2008, you probably wouldn’t think that things are getting better, but they are. As bad as that crash was, we didn’t have bread lines like we did in the Great Depression; we didn’t have homeless camps in Central Park; and we didn’t have food riots like the Flour Riot of 1837 in New York City.

Of course, things aren’t perfect nowadays, but our downturns tend to be more measured, more controlled and further apart. Take a look at this chart of each recession in US history and the time that elapsed since the previous one:

Notice how the lines tend to get longer over time? That’s because we’re getting smarter about capital markets, fund flows, business cycles and ways to cushion the economy when things get really bad.

That doesn’t mean recessions are destined to happen every seven years, but it does mean that we can expect recessions to be spread even further apart in the future. Maybe someday, recessions will even stop happening altogether.

Life in the Slow(er) Lane

It’s now been nine years since the Great Recession officially ended in June 2009. That isn’t the longest gap we’ve had between recessions (that award goes to the post–dot-com recession of 2001), but I’m betting that the next recession won’t happen until it’s been a bit more than 10 years since the last one ended.

There are a number of reasons why I think the next recession is pretty far off, but they all come from the same starting point: the slow recovery we’ve seen over the last nine years.

Whether you call it “the new normal,” as ex-PIMCO bond genius Mohammad Al-Arian does, or you prefer “secular stagnation,” as Harvard professor and ex-presidential advisor Larry Summers does, everyone has noticed an uncomfortable truth about our economy since the Great Recession: it’s been recovering at a glacial pace.

That slow improvement has resulted in a delayed business cycle and slow growth in consumer spending. It has also caused overall wage growth following the recession to rise at a very slow rate—though it is now starting to increase significantly. That’s not a recessionary trend, but it isn’t a bubble either. It’s ho-hum.

And ho-hum is likely what we’re going to see for a few years to come. Again, not great, but not a recession either.

Steady Gains Ahead

What does ho-hum mean for investors? It means lower returns—but no major downturn.

Slowly, investors have begun to realize that this is a good reason to buy stocks. If you’re going to get lower average annualized returns over the next few years and you’re not going to get a major downturn anytime soon, that means it’s a really good time to buy stocks—especially since many are oversold due to fear mongering and too many individual investors keeping their cash out of the market.

(You could start with the 10 dividend stocks my colleague Brett Owens says are set to double. Click here to read all about them.)

Most retail investors haven’t gotten the memo that this is the new reality of investing, but the stock market has. Take a look at the volatility index known as the VIX. Called the “fear gauge,” this is an indicator of just how scared the market is of a major downturn in the near future. And its average has been trending down ever since the financial crisis began:

Volatility Still Falling

Despite the headlines about volatility rising earlier this year, fear is still going down over the longer term because the market is continually realizing that there are too many safeguards in place, too many checks and balances and too much at stake in the new world economy to let another 2008 happen. That doesn’t mean it won’t, but it does mean it won’t anytime soon.

And without a recession, there’s not going to be a bear market in stocks in the short term, meaning investors need to buy now and watch their portfolios grow. The only trap in today’s new normal is sitting in cash on the sidelines, where rising inflation will eat up your net worth.

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!