Three Oil Stocks to Pick Up The Slack From the Loss of Saudi Production

On Saturday, September 14, Saudi Arabia’s largest crude oil processing facility at Abqaiq, was attacked by at least 30 drones and cruise missiles. The attack shut down about one-half of the country’s oil production capacity, which is 5% of the world’s daily production and consumption. When trading markets opened on Monday, crude oil prices jumped by 14%.

However, within a couple of days, crude was back trading at just a couple of dollars per barrel above the pre-attack price. I am shocked that the markets are that unconcerned about an attack that shut down 5% of the world’s oil supply.

The reason that crude oil, which saw WTI peak at almost $63 on Monday, is back trading in the high $50s is that Saudi Aramco management has promised to get the lost production quickly back online. From what I have read, this may not be feasible.

It is my opinion that Saudi Arabia will sell oil from its reserves and try to get Abqaiq back up to full capacity in a few weeks. This may be very, as in too, optimistic and the country could quickly exhaust its reserves and leave the world supply with a continuing shortage with a much smaller safety net.

Related: What’s In Store For Oil Now That Half of Saudi Arabia’s Production is Offline?

Another concern is that oil traders seem to be completely ignoring the potential for another attack. I am a former Air Force pilot, and my thoughts are that when the attackers see that 30 drones and cruise missiles didn’t get the job finished, I would start to ready the next one with 60 drones and missiles.

The powers behind the first attack want to shut down the capitalist world. The capitalists trading oil seem to have blinders on that their way of life has been attacked.

I think the world of oil traders is insulated from the dangers of the world and are underpricing the risks to crude oil. There is a strong possibility of another event that will drive the price of a barrel of crude much higher, and the next time it will stay higher. Here are three dividend-paying stocks that would benefit from higher oil prices.

Royal Dutch Shell (RDS.A) (RDS.B) is a global energy producer that would be a significant beneficiary of another or continued production reductions out of Saudi Arabia.

The company is truly a global producer with production areas in the Gulf of Mexico, Canada, Norway, Malaysia, Nigeria, Brazil, and Russia.

Royal Dutch Shell appears to be a prime player to provide oil to end-users that find they are not getting what they need from Saudi Arabia.

RDS shares currently yield 6.4%.

Occidental Petroleum Corp. (OXY) is a crude oil and natural gas production company whose share price is down 40% since it announced earlier this year that the company would acquire Anadarko Petroleum Corp. The merger is now complete. OXY is a global energy producer with a large footprint in the U.S. Permian, Rockies and Gulf of Mexico production areas.

The U.S., especially the Permian, is where most of the world’s crude oil production growth is being fueled.

Higher oil prices will allow the Permian and other U.S. production areas to ramp up their growth further.

OXY shares currently yield 7.0%.

Plains All American Pipeline LP (PAA) is a master limited partnership (MLP) that owns the largest independent crude oil pipeline and storage network in the U.S.

The company is a major mover of crude oil out of the Permian.

The company has additional pipelines under development and typically partners with crude oil end users as partners in any new projects.

While the company doesn’t count on the results of its Logistics Division to support the dividend, this trading business can generate huge profits when energy prices get disrupted.

PAA currently yields 6.6%.

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Source: Investors Alley

The Home Run Stocks Wall Street Doesn’t Want You To Know About

Imagine there’s a stock that’s up nearly 30-fold since 2000 and not a single Wall Street investment analyst follows it.

This investment has crushed just about every hedge fund out there, yet Wall Street is entirely unaware of it.

Worst of all, it’s stock in a company that’s known by many. It’s a favorite of people who work on Wall Street.

The stock I’m talking about is Nathan’s Famous (NATH).

That’s right, the hotdog place. It’s a New York institution. Not only that, it’s a July 4thinstitution. They sponsor the annual July 4thhotdog-eating contest. When you have a moment check out the ESPN video of this year’s contest featuring record-holder Joey Chestnut.

Nathan’s is currently in its 102nd year of business. The hotdog stand was started by a guy named, wait for it, Nathan. In this case, Nathan Handwerker.

Today, there are tons of Nathan’s located across the country, and several locations around the world. (Earlier this year, I was at the location near Manila in the Philippines.)

I bet you didn’t know Nathan’s has also been an astounding winner.

In late 2000, shares of Nathan’s were going for $2.50 apiece. Lately, Nathan’s is going for $70 each. (That’s down from its high of $107.)

Nathan’s is what we call an “Orphan Stock.” That means that it has zero or near-zero analyst coverage.

I love Orphan Stocks. They’re a great place to find overlooked values. Consider a stock like Amazon (AMZN). I love Amazon, and I wish I had bought it years ago, but what new information can I find on the company now?

Amazon is already worth $900 billion. There are 50 firms in Wall Street that follow the stock. The stock basically lives in a glass fishbowl. That’s not the case with Nathan’s which, despite its name, apparently isn’t as famous as I thought.

How can a stock rise so much for so long and no one on Wall Street has ever thought to start covering it? Part of the reason is probably because they don’t bring Wall Street any investment banking business.

That’s more of a plus than a minus. It suggests the company hasn’t entered into any unwise mergers. Or taken on too much debt. Or has been acquired at a poor price. Not needing a banker is hardly a bad thing.

Every earnings season, investors gather to see what companies have beaten expectations and what companies have fallen short. It’s interesting because a company can have a lousy quarter, but as long as it was less lousy than expected, then it can be a good quarter for its stock. Investors are expecting expectations.(awkward sentence) maybe; investors are expecting the stock to meet expectations.

With Nathan’s and other Orphan Stocks, there’s nothing to expect. Why? Because no one follows them. For an investor, that’s another bonus. They don’t have to worry about the Wall Street earnings game.

Have you ever heard of Atrion (ATRI)? Don’t worry. You’re not alone.

Atrion is a medical products company based in Dallas. Even though they’re small ($1.5 billion market cap), they’re active in some very niche markets like soft contact lens disinfection cases. Ever wonder who makes valves for life vests? There’s a good chance it’s Atrion. I particularly like that Atrion has wide operating margins.

Thirty years ago, you could have picked up one share of ATRI for $6. Recently, the stock got up to $927 per share. A few weeks ago, Atrion boosted its dividend by 15%.

Now I’m going to ask you a straightforward question: Guess how many firms on Wall Street cover Atrion? I’ll give you a hint. It’s the same as Nathan’s.

That’s right. Zero.

Let’s also remember how hard the financial crises blew through Wall Street. The big houses simply don’t have the big research departments that they used to. The budgets have been cut back. As a result, there are lots of companies that get no analyst coverage.

Many Orphan Stocks have been orphaned for good reasons; they’re not very good. But if you look closely, there are many incredible orphan stocks like Nathan’s Famous and Atrion.

With fewer eyes watching, it’s easier to find overlooked gems. Make sure there are some Orphan Stocks in your portfolio.

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Source: Investors Alley

The Secret to Growing Your Retirement Income 107% (with 69% upside)

Let’s brush aside some financial noise today, as I’d like to show you the best retirement investment you can make.

I’m talking about secure dividends that’ll grow every year, fund your regular expenses today, plus grow your capital so you don’t have to ever worry about running out of money.

You won’t have to worry about what the Fed says, either, because this worry-free strategy is ahead of Jay Powell and his crew. In fact, this “1-click” indicator not only tells you what to buy, but it nails the “when” better than any armchair (or professional) Fed watcher.

We’re going to use real estate investment trusts (REITs) as our vehicles of choice.

Why REITs? For starters, they’re pullback-proof. For most of the late 2018 downturn, REITs actually rose. And even when they did get caught in the downdraft, they only fell half as much as the rest of the market:

REITs Show Their “Pullback-Proof” Chops

What’s more, by simply watching REITs, you can tell where the Fed will go next. Consider last January: as the Fed chief stubbornly stuck to his rate-hike plans throughout the month, investors in REITs—which are an ideal play on falling rates, as we’ll dive into in a moment—saw right through him.

They piled in!

Before poor Powell could find his way to a microphone to swear off his rate hikes, savvy REIT buyers had pounded these trusts a lot higher than the market—even though REITs were starting from a higher base, thanks to their resilience in the pullback:

REITs Call Powell’s Bluff

Fast-forward to today and we’ve got ideal conditions for REIT investing. First off, interest rates are low, and traders betting through the futures market expect them to go lower:

Source: CME Group

Second, the yield on the 10-year Treasury has collapsed, sitting at 1.75% after hitting highs above 3.2% late last year.

And some Wall Street vets, like Bob Michele, CIO and head of global fixed income at JPMorgan Asset Management, say they see the yield on the 10-year going to zero. Others see negative interest rates as a real possibility here in the US.

I think you’ll agree that REITs’ big dividends (roughly double, on average, what your typical S&P 500 stock pays) will be irresistible to a lot of investors if the other option is to pay the bank to hold onto their money!

You can set yourself up for bigger gains—and greater safety—if you look for REITs whose dividends are not only growing but accelerating. That’s because an accelerating dividend acts like a magnet on a company’s share price—pulling its payout higher with every single increase.

You can see this pattern in stock after stock—and not just REITs. Check out how shares of Coca-Cola (KO) rolled higher with each payout hike:

Coke’s “Dividend Magnet” in Action

It’s uncanny! And it shows that you just can’t keep a good dividend-payer down.

But we’re not going to buy shares of Coke today, because, as you can see above, its dividend growth is slowing. To lock in our upside (and hedge our downside), we need stocks whose payouts are, as I mentioned earlier, delivering bigger and bigger hikes every year.

When you buy “dividend accelerators,” gains can come fast—I’m talking 32% in just 10 months fast!

How “Dividend Magnets” Propelled Us to a Quick 32% Gain

To see this dead-simple dividend-growth strategy in action, look at American Tower (AMT), a REIT I recommended in my Hidden Yields advisory in November 2018.

The REIT is a lynchpin of the world’s data networks, with 150,000+ cellphone towers scattered around the planet.

AMT is one of four major cell-tower REITs—the others being SBA Communications (SBAC), Crown Castle International (CCI) and Uniti Group (UNIT).

The REIT yields 1.6% today. But that low current yield masks the fact that management hikes the payout every quarter, and by no small amount: the dividend has soared 338% since American Tower declared its first payout in March 2012.

But a funny thing happened: after tracking the dividend closely, AMT’s share price fell off the pace. And when that gap got particularly wide late last year, we pounced:

AMT’s Dividend Magnet (Temporarily) Loses Its Grip …

The result? In the following 10 months, we bagged three dividend hikes (a nearly 10% raise in all) and 32% in total returns as AMT’s price raced to catch up to its dividend! That’s nearly three times the S&P 500’s 11.7% gain in that time.

… Then Yanks Us to Big Gains (and Dividends!)

69% Gains, 5 Payout Hikes and 107% Dividend Growth—in 3 Years!

If you’re still not sold on the power of a surging payout, let me show you what happened to another data-center REIT: CoreSite Realty (COR). Before I recommended CoreSite in March 2016, it was showing the very same dividends-up, share-price-up pattern:

CoreSite Auditions for Our Hidden Yields Portfolio

It is true that, unlike with AMT, CoreSite’s dividend hadn’t fallen behind its payout. But that didn’t matter because management was flush with cash!

Driven by top-quality tenants like Microsoft (MSFT) and Verizon (VZ), CoreSite had seen its revenue grow 17% annually and funds from operations (FFO, the REIT equivalent of earnings per share) surge 24% over the preceding three years, so management had plenty of runway to grow the dividend.

I’d seen enough—I issued a buy call on the stock in Hidden Yields on March 18, 2016.

What happened? By February 2019, when we closed our position, management had hiked the payout five times—more than doubling it in size—and driving us to a 69% total return in just under three years!

CoreSite Rolls to a Fast Dividend Double

That’s the punch a soaring dividend packs. When you combine it with plunging (and possibly even negative) interest rates, you get a setup for even bigger upside.

This is the perfect time to mention my 7 top dividend-growth picks now. They’re set to hand out for life-changing gains and surging yields, thanks to their powerful “dividend magnets.”

In fact, I fully expect these 7 dividend stars to …

DOUBLE Your Money Every 5 Years (or less!)

I can’t wait to tell you about these 7 off-the-radar buys, whose payouts are growing so fast that I fully expect them double an investment made today by 2024—and likely a lot sooner. 

And because these gains will be driven by these 7 stocks’ surging payouts, you can expect a huge slice of that win to come your way in cash!

Imagine turning a retirement “pot” of $250,000 into $500,000, or $500,000 into $1 million. That’s the kind of upside I’m talking about here.

These 7 dividend wonders are ridiculously cheap NOW—and they’re growing payouts at an accelerating pace.

Even if the market does take a tumble, these stocks’ soaring dividends give you protection as more yield-seekers spot their surging income streams and buy in, eager to hedge their downside with a reliable wave of dividend cash.

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

Trade of the Week: Major Options Action In Financial Sector Stocks

A couple of large covered call trades in Financial Sector Select SPDR ETF (XLF) imply smart money is taking a moderately bullish position on financial stocks. There is likely a cap to how high financial stocks can go due to lower interest rate expectations.

However, covered calls are mostly considered bullish trades because they generally make money when the stock goes up. These long-term XLF covered calls provide some ability for capital appreciation, add a small amount of yield, and offer a small measure of downside protection.

It’s harvest time for option traders.

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The ‘Secret’ Ingredient Set to Send Marijuana Stocks Soaring

Call it the secret ingredient that compels a stock to move higher. It’s like an unstoppable magnetic force that pulls stocks up.

marijuana stocks

Source: Shutterstock

It really shouldn’t be a secret. It’s discussed in every company analysis and every Finance 101 class. It’s available for everyone to see for every publicly traded company.

And yet, investors look right past it, especially in early stage companies and industries when the stocks and numbers tend to be more volatile.

This not-so-secret, secret ingredient is sales. Or revenue, as it’s called on the balance sheet.

The more a company brings in, the more upside potential for a stock.

Here’s the deal: Marijuana companies are right now hitting the investing sweet spot where they are starting to generate significant revenue — yet stock prices are still down.

That makes NOW the time to buy.

A Proven Path to Big Profits

When we look back on 2019, I think we’ll clearly see it was one of the best buying opportunities ever in marijuana stocks. Prices are down even as legalization spreads and sales jump. Eye-popping long-term growth is in the cards, but investors aren’t focused there yet.

History shows the massive profits you can earn. Take a look at both Netflix(NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) and some of the mouth-watering opportunities along their growth paths.This is the chance to buy big growth at low prices.

Netflix & Amazon Chart

Now let’s look at a few marijuana stocks so you can see how they are in that same early stage sweet spot.

Acreage Holdings (OTCMKTS:ACRGF) is a big name in the cannabis industry. Its board includes three of the most connected people on the planet: former U.S. Speaker of the House John Boehner, former Massachusetts Governor and current U.S. presidential candidate William Weld, and former Prime Minister of Canada Brian Mulroney. The company is also central to perhaps the blockbuster marijuana story of the year (so far). Canopy Growth (NYSE:CGC), the biggest cannabis company on the planet, agreed to buy Acreage for $3.4 billion when marijuana becomes legal in the U.S. It was practically a flashing neon sign that U.S. legalization is coming sooner than most expect.

Still, the stock has been cut in half this year despite expectations for revenue to soar more than 3,800%, from $21.1 million in 2018 to $838 million by the end of 2021.

Acreage Holdings Chart

Remember Netflix earlier? If that doesn’t look like a buying opportunity, I don’t know what does.

Harvest Health & Recreation (OTCMKTS:HRVSF) is a lesser-known but equally dramatic example. It has the most retail licenses to open marijuana dispensaries in the U.S., and it has aspirations to be the biggest cannabis company in the world. That’s bold, but the company also has strong management, a solid cash position, and a path to profitability thanks to growing revenue.

Harvest Health Chart

Here again, we have a stock down 50% since April — at a time of exploding revenues … as in from $47 million in 2018 to $1.3 billion by 2022. That 2,665% growth if executed on can be bought for pennies on the dollar.

Now Is The Time

I could show you plenty more similar charts, but I think you get the point. Marijuana stocks are cheap, especially considering the explosive revenue growth that’s anticipated from the biggest players.

Last year, legal marijuana sales in the United States hit $10.4 billion, which is nearly 100% growth over the three-year period going back to 2015. This year, sales should grow nearly 24% to $12.9 billion.

Now just imagine when legal weed is opened up to the entire $21 trillion U.S. economy. We’re talking exponential growth potential in a single stroke.

Marijuana is a massive trend still in its early stages, with the U.S. waiting in the wings to become the biggest market in the world. Any time governments open a huge new market like legal marijuana, investors can win very big. The key is to own the right investments before that happens, and now is the perfect time to start.

Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, 

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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: Investor Place

How To Get Paid An Income By Avid Coffee Drinkers

Coffee is one of those consumable goods that you simply don’t want to mess with. The country may fall into a deep recession. The ocean may rise to levels that engulf the coastlines. A meteor at this moment may be hurtling towards Earth. And yet, it won’t stop coffee drinkers from going to buy their next cup of joe.

As an avid coffee drinker myself, I can certainly appreciate the necessity of a good cup of coffee. There’s even a better than average chance that I’d ignore an alien invasion in order to make sure my coffee supply was in full stock.

Of course, no one capitalizes on people’s love of coffee more than Starbucks (SBUX). The ubiquitous coffee chain now has over 31,000 stores worldwide. What’s more, the business seems to be nearly recession-proof. The company is one of the few out there which can seemingly continue to raise prices on its drinks without losing sales.

SBUX also does an excellent job of introducing new products to its mix to keep the menu from becoming stagnant. In fact, the company now sells more cold drinks than hot… an interesting trend for a coffee shop.

It’s been a great year for SBUX stock as well, up 40% so far year-to-date. The stock price reached 52-week highs of nearly $100 before recently pulling back to $90. So what’s next for the share price? Is it too late to buy the stock at these levels?

At least one prominent trader believes SBUX has limited upside through October. This trader purchased a large number of covered calls expiring in October with the stock trading at about $90.50.

More specifically, the trader bought 500,000 shares of stock while simultaneously selling 5,000 October 97.5 calls for $0.37. The position collects $185,000 in premium, which works out to about half a percent in yield for the next five weeks.

It may not seem like much but annualized that yield works out to about 5%. Tack that on to the 1.5% dividend yield and you are pulling in a decent income for a growth stock.

Of course, the covered call doesn’t cap the gains on the stock until $97.50, so the position can still generate another $7 in capital appreciation. Overall, this looks like a moderately bullish trade on the stock. Otherwise, if the trader didn’t assume the upside potential was there, the call would have been sold at a closer (to the money) strike to increase yield.

I like trades like this because they add a small yield component to a stock that is generally purchased for its aggressive growth characteristics. And while SBUX customers aren’t directly paying you the yield, it is their business which leads to the company’s growth potential, which gives the upside calls their value.

In other words, by making this trade – which does allow you to participate in some of SBUX’s upside potential – you are getting essentially getting paid a small income by coffee addicts (like myself)!Read this if you’ve ever lost money trading options

Does everything seem to go wrong right after you place an options trade?

You watch the stock and everything is going right.

Then you open the trade… and within an hour, you’ve lost money.

It’s not your fault. You just simply weren’t given the “behind the scenes” knowledge every options professional knows.

If you knew how they worked, in 2018 – when the markets lost 6% – you could’ve booked gains of:

  • 127% in 23 days on GLD
  • 148% in 28 days on SQ
  • 229% in 36 days on SMH
  • 213% in 13 days on Netflix
  • 79% in 22 days on SPY
  • 63% in 24 days on SPY
  • 117% in 21 days on SPY
  • 96% in 36 days on QQQ
  • 114% in 42 days on MRVL

Just like I did.

The road to success for your first big, triple-digit options win is simple.

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Source: Investors Alley

This Easy “Hack” Delivered 70% Gains in 9 Months

Today I’m going to show you the one market indicator you can use to grab gains as high as 70% in nine months (or less!), plus dividends growing double-digits, too.

It’s a measure of market panic you’ve probably heard about, but here’s the funny thing: everyone is looking at this indicator backwards.

Let me explain.

First, I’m talking about the CBOE S&P 500 Volatility Index, or VIX for short. You’ve probably heard of the VIX: dubbed the market’s “fear gauge,” it’s a measure of how volatile traders see stocks in the next 30 days.

In other words, when investors are twitchy, the VIX rises—and when they’re confident, it trends down. But to reallyprofit off this measure of terror, you have to be a gutsy contrarian and buy when fear shoots up.

It’s one of the most reliable buy indicators there is! Take a look:

VIX Up, Stocks Up

As you can see, every time the VIX spikes, the market takes off soon after. Take a look at the end of that chart: you can see that the VIX is a bit higher than it’s been for most of 2019.

That means our buy window is easing open once again.

And if history is any guide, our opportunity will soon get better. That’s because September is one of the more volatile months, according to Yardeni Research, and typically turns in the worst performance.

And with profits and sales still strong, unemployment low and wages rising, any pullback (and spike in the VIX) this month would be a great buying opportunity.

But we’re not going to settle for ho-hum dividends from darlings like McDonald’s (MCD) or Coca-Cola (KO). To ride our “fear gauge” to market-beating gains, we need stocks whose dividends are not only growing but accelerating.

Last week, in “3 Dividend Stocks That Are Near-Perfect for High Volatility,” I showed you how a rising dividend is a magnet, pulling a company’s share price higher as the payout grows. And the lure of a rising dividend is very strong now, with the yield on the 10-year Treasury note plunging below the yield on the typical S&P 500 stock.

To show you how potent buying a rising dividend against a spiking VIX can be, let me take you back to December 21, 2018, when the “fear gauge” hit 30—the highest level in nearly five years.

That prompted me to do something unusual in my Hidden Yields advisory.

You see, Hidden Yields comes out monthly, and every issue brings you one new dividend-growth pick. But in December, with my favorite contrarian indicator going wild, I decided the time was right to pound the table on not one but two dividend-growth picks.

How Fear Drove a 70% Gain

The first was NRC Health (NRC), a low-key maker of “back-end” systems for the healthcare industry, specifically surveys that solicit patient feedback on doctors, nurses and staff.

It’s a low-key firm with a smart business model: it’s free for patients to use but charges thousands of dollars a year to cash-rich healthcare providers! That gave it:

  • Recurring annual payments from customers with
  • Recession-proof businesses.

I also liked the fact that NRC had plenty of room to grow by building customized systems for clients and cross-selling its other products. It nearly tripled its “regular” dividend since 2014 and was kicking out regular special dividends, too:

NRC’s Dividend Grows 2 Ways

How did that buy turn out? Fast-forward nine months, and NRC had soared 70%!

NRC Triples the Market’s Gain

We weren’t done.

Because with my “fear gauge” still redlining back in December, I added a second dividend grower I’d been watching to our Hidden Yields stable.

That would be NexStar (NXST), a midcap stock that had been dragged down by a misunderstanding of its business: NexStar is one of the biggest local-TV operators in the country, reaching an impressive 38% of US households.

This was a classic “disrespected dividend,” trading at 6.5-times earnings when I recommended it. But here’s what most folks missed:

  • NexStar’s retransmission revenue—the money it collects from broadcasters for the local content it provides—was growing quickly. Plus,
  • Its digital-media revenue (from its 114 local websites, 202 local mobile apps and online videos) was growing even faster.

Add these channels together and you had a company growing profits, sales and dividends at an amazing clip:

We Bought This for Just 6.5X Earnings

Over the following nine months, NXST handed us a fast 31% return, easily eclipsing the market!

“Fear Gauge” Ignites Another Market-Beating Return

Now let’s turn our attention to 7 of my very best dividend-growth picks. They’re perfect for the markets we’re in right now.

7 Buys to DOUBLE Your Money Every 5 Years (High VIX or Low)

I can’t wait to tell you about these off-the-radar buys, which are poised to throw off strong double-digit gains—year in and year out—with much of that return coming your way in cash dividends! 

So what kind of upside am I talking about?

Enough to DOUBLE your money every 5 years—and likely less time than that!

Imagine turning a retirement “pot” of $250,000 into $500,000, or $500,000 into $1 million. That’s the kind of upside I’m talking about here.

And you don’t have to wait for the VIX to spike to buy them. These 7 dividend wonders are cheap NOW—and like NexStar and NRC, they’re growing payouts at an accelerating pace.

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Source: Contrarian Outlook

Are Tech Stocks Going To New Highs By Year-End?

The funny thing about stocks this year is that it feels like we’re having a rough year.  The last few months have brought quite a bit of volatility to the market, and with it comes the feeling that the stock market is struggling.

However, looking at the numbers, you may be amazed to see the S&P 500 is actually up 16% for the year.  Moreover, the Nasdaq-100, comprised of most of the big tech names, is up over 20%.  It doesn’t feel like a big up year for stocks, but it has been precisely that.

Most likely, investors feel like stocks have been struggling because most of the gains came before the summer.  While we haven’t seen a correction so far this year, stocks are about 6% off 52-week highs.  There’s almost always a recency bias when it comes to investing, so it should be of little surprise if investors have soured on the market.

Anecdotally, it seems like more investors are bearish on the remainder of the year.  The uncertainty of the China trade war is weighing on stocks.  There’s also been mixed signals from the Fed on its willingness to cover for the self-imposed battle of tariffs between the US and China.

On one hand, the Fed cannot ignore adverse economic developments, regardless of the cause.  On the other hand, some in the Fed believe it’s not a prudent course of action to let the administration pursue controversial economic policies simply because the Fed can bail the U.S. out if the policies backfire.

Of course, all of this may be moot if lowering interest rates stop being a crutch for the economy.  After all, there’s only so much further rates can go before getting into negative territory.

So what’s all this mean for stocks?

I took a look at options action in the Invesco QQQ Trust (QQQ) to see what traders think about the possibility of a Nasdaq-100 rebound.  It turns out; there’s a least one considerable, very bullish trade which recently hit the tape.

A trader bought 1 million shares of QQQ at $186.17 while selling 10,000 December 20th 208 calls for $0.72.  This covered call trade brought in $720,000 in premium, which works out to a 0.4% yield in not quite 17 weeks.  The max gain is capped at $208, but that’s 12% higher from current levels.

Clearly, it’s a very low yield.  Annualized we’re only talking about 1.2%.  However, the dividend yield on QQQ is only 0.8%.  If this covered call trade is made roughly every four months, the annual yield of holding QQQ shares climbs to a total of 2%.

And that is very likely the goal of this trade.  Hold QQQ and keep the upside potential in the index, but earn 2% in yield over the course of the year.  After all, tech stocks aren’t generally known as income stocks but are rather purchased for their growth potential.

In that respect, 2% isn’t a bad yield at all to receive for stocks with significant upside potential.  And let’s not forget how low rates are right now and could be close to zero by year’s end.

Ultimately though, you have to view this trade as extremely bullish.  If getting to $208 by the end of the year seemed impossible, the trader would have used a lower strike to collect more yield.

If you want to make a similar trade, it may make sense to use a lower strike and cap the upside of QQQ in exchange for higher income from the calls.  However, if you use QQQ as your aggressive growth component in your portfolio, selling a much higher call like the trade above does make sense.

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

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

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

Let’s dive in.

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

First, though, if you’ve been reading my columns on Contrarian Outlook, ISD’s name might sound familiar: two weeks ago, I highlighted a buying opportunity in the fund, writing that its huge discount is “going to disappear soon.” The reason? Its “improving dividend-growth potential.”

As if on cue, Prudential, the fund’s managers, announced less than a week later that ISD would hike its dividend—part of a recent trend that’s seen the fund raise its payout 24% this year alone:

8.8% Dividends and 24% Payout Growth—in 1 Buy

Heck, we’d be happy if ISD kept its 8.8% dividend where it is. But an 8.8% yielder with a payout growing this fast is unheard of.

And those hikes will likely keep on coming, for one reason: the Federal Reserve.

Management Reads the Fed Like a Book

Let’s quickly go back a few years. In 2015, when the Federal Reserve started raising interest rates, ISD had a strategy specifically designed to profit from the Fed’s hikes. At the time, ISD specialized in buying short-term corporate bonds, which are less sensitive to rate hikes than longer-term bonds.

That strategy helped ISD’s net asset value (NAV, or the value of its underlying portfolio) top the high-yield bond index, shown below by the SPDR Bloomberg Barclays High Yield Bond ETF (JNK):

ISD Taps the Fed for Benchmark-Beating Returns

Not only did ISD investors get corporate-bond exposure, they also snagged bigger gains and bigger dividends than they would have with JNK, which only yields 5.6%. The result was a larger total return and a bigger income stream.

“Powell Pivot” Leads to a Strategy Shift—and More Gains

Then, in early 2019, ISD changed its name and its mandate. As the Fed made clear at the start of the year, the central bank would pivot from raising rates to cutting them. The first cut came in July, and the market is expecting another later this year, with the possibility of two or more over the next 12 months.

In response, ISD pulled a 180. In March of this year, Prudential announced that the fund would abandon its focus on short-term corporate bonds and become a broader high-yield bond fund. The reason is simple: in a market where interest rates are going down, long-term high-yield bonds tend to go up in value.

And ISD is taking advantage, riding its new strategy to market-beating returns, with much less volatility than stocks:

New Strategy Ignites ISD

About That 13% Discount …

By now you might be wondering about that 13% discount I mentioned earlier, and how it can exist on a fund that yields 8.8%, has hiked its payout twice in six months and is whipping the index.

Part of the reason is the market jitters of the past few months, which have helped push ISD’s discount about as wide as it’s been since the fund’s new investment policy began:

A Buying Opportunity Appears

But that’s not the only reason. Another one is the fund’s small size.

As I said earlier, ISD only has $552 million in assets. That makes it too small for most big investors—the multi-billion-dollar hedge funds and investment banks—to take advantage of. The fund is just too tiny for them to make noticeable profits, and that’s led to a lack of coverage of ISD. And that means plenty of folks have missed the big shift in the fund’s mandate.

That inefficiency is an opportunity for CEF investors, because it won’t last forever. While some CEFs can have their discounts last for years, well-performing and high-yielding funds like ISD will more often than not see investors rush in. That means grabbing a position now will likely pay off handsomely in gains, dividends and payout hikes in short order.

More Safe 8.7%+ Dividends (with 20% Upside) Waiting for You Here

Here’s the best news: there are dozens more smaller CEFs that, like ISD, offer fast-growing dividends and smooth, steady gains.

But because small CEFs get so little coverage, hardly anyone knows! (Though in today’s world, where Treasuries yield less than 1.6%, more folks are starting to catch on.)

That makes now a great time to buy ISD, but there’s no reason to stop there when there are so many more high—and growing—dividends available. Like the 4 CEFs I’ll share with you right here. They pay 8.7% dividends as I write, their payouts are growing and, yes, these “stealth” funds are terrific bargains!

So much so that I’m calling for 20%+ price upside from each of them in the next 12 months.

The 4th fund on my list is a great example: it yields an incredible 10.7% and, like ISD, its payout is growing—up 150% in the past decade!

A Rare 10.7% Dividend That Soars

More folks are starting to catch on—which is why this fund has clobbered the market so far in 2019:

Income-Starved Hordes Pile In

The funny thing is, even though this fund should be trading at a big premium, you can still grab it at a discount! And with interest rates headed lower (making its huge payout even more appealing), its gains are just getting started.

But even if I’m wrong and it just trades flat from here, you’re still beating the market’s average yearly return in dividends alone, thanks to this fund’s outsized 10.7% dividend yield!

If that’s not the definition of a win-win, I don’t know what is.

Full details on all 4 of these income (and growth) powerhouses are waiting for you now, and, as with ISD, this is the very best time to buy them.

Michael Foster has just uncovered 4 funds that tick off ALL his boxes for the perfect investment: a 7.4% average payout, steady dividend growth and 20%+ price upside. — but that won’t last long! Grab a piece of the action now, before the market comes to its senses. CLICK HERE and he’ll tell you all about his top 4 high-yield picks.