All posts by Brett Owens

Want Dividends and Price Upside? 7 Stocks for 162% Returns

If you’re not yet as rich as you hoped you’d be by now, don’t worry – we still have plenty of time to get you there.

And I’m not talking about investing your “growth capital” into risky fly-by-night names like Tesla (TSLA) and Snap (SNAP).

We can scale our money more securely – but just as spectacularly – by purchasing sound dividend payers that happen to be growing their payouts rapidly. Here’s why.

The Most Lucrative Way Shareholders Get Paid

There are three – and only three – ways a company’s stock can pay us:

  1. A cash dividend.
  2. A dividend hike.
  3. By repurchasing its own shares.

Everyone loves the dividend, but investors usually don’t give enough love to the dividend hike. Not only do these raises increase the yield on your initial capital, but also they often are reflected in a price increase for the stock.

For example, if a stock pays a 3% current yield and then hikes its payout by 10%, it’s unlikely that its stock price will stagnate for long. Investors will see the new 3.3% yield, and buy more shares.

They’ll drive the price up, and the yield back down – eventually towards 3%. This is why your favorite dividend “aristocrat” – a company everyone knows and has paid dividends forever – never pays a high current yield. Its stock price rises too fast!

If you don’t believe me, consider 3M (MMM), a “stodgy” company with a ho-hum 2.6% yield. So once inflation bites, you’re left with almost no actual income!

But don’t forget that 3M is a charter member of the Dividend Aristocrats, having hiked its payout for 60 straight years. The connection between its rising dividend and its rising share price is unmistakable.

Check out how the payout drives up the share price at almost exactly the same rate over just about any time period you can imagine, starting with 3 years:

Dividend Up 33%, Shares Up 36%

And then 5 years:

Dividend Up 114%, Shares Up 109%

10 years:

Dividend Up 172%, Shares Up 173%

Since share prices move higher with their payouts, there’s a simple way to maximize our returns: Buy the dividends that are growing the fastest.

The Path to Fast 162% Gains From Safe Blue Chips

Have you always wanted to buy a safe blue chip stock like Coca-Cola (KO) and get rich from it like Warren Buffett?

It’s doable. But most investors “live in the past” and fixate on dividend track records rather than a payout’s forward prospects. And looking ahead is the key to yearly gains of 12%, 27.1% or even 54% or more with blue chip stocks.

(Yes, that’s no exaggeration. It is possible to make 54% annualized gains on a safe blue chip stock. I’ll share an example in a moment.)

Let’s first consider the case of Coke, which achieved its dividend royalty status in 1987 (its 25th straight year with a dividend hike). The firm hit its coronation with a head of steam, rewarding investors with a 362% payout hike in just five years (from 1986 to 1991). Its stock price raced to keep up with its dividend, rising 234% over the same time period:

Great Dividend Growth, Great Returns

It didn’t really matter if you bought shares before or after the company was officially a dividend aristocrat. The driving factor for profits was the dividend’s velocity – it was moving higher quickly, so its stock price followed.

Fast forward to the last five years, and we see that Coke’s youthful exuberance has slowed considerably. The firm still hikes its payout every year, but it’s a slower climb – totaling 45% over the past five years. Which means its stock price merely plods along too (+25% in five years):

Average Dividend Growth, Average Returns

Why is Coke’s dividend slowing down? Simple – just look at the top line.

Shrinking Business is Bad for Payouts

It sounds obvious, but income investors often wade so deep into the dividend weeds that they ignore obvious cues – such as shrinking sales.

Let’s add Coke’s top line into the last chart, and we’ll see that the fact that the payout is growing at all is an act of financial wizardry:

Shrinking Sales Slow the Dividend

Coke’s top line has shrunk by 22% over the last five years. Which makes its dividend growth quite the feat!

Contrast this with the 1986 to 1991 period, when the company was younger and still growing. It boosted its sales by 30% over that time period.

Of course it’s possible to grow payouts faster than profits and sales. In fact, this is what often happens with dividend payers. But even the most gifted managers can only squeeze so much in payouts from a shrinking pie. It’s better to focus on businesses with the winds at their backs.

And That Can Include Spry Blue Chips, Too

Two-and-a-half years ago I told my Hidden Yields subscribers to buy Boeing (BA) because:

  • Its business was booming,
  • Its stock was quite cheap with respect to cash flow, and most importantly
  • Management was plowing profits into payout growth.

Boeing wasn’t a dividend aristocrat like Coke. But it was a much better buy. Here was the tale of the tape in December 2015 (pay special attention to the last column, because it’s the most important):

Boeing vs. Coke (December 2015)

If you want to make real money with stocks, you should always put your money with the faster dividend grower. Boeing was no exception – its two massive dividend raises in the last two years have sent the stock soaring to 150% total returns:

Boeing Soars With Its Payout

Our secret, as usual, is we purchased the payout that was growing the fastest. We enjoyed a 57% cumulative “raise” from Boeing, which in turn rocketed its stock price higher.

Since share prices move higher with their payouts, there’s a simple way to maximize our returns: Buy the dividends that are growing the fastest.

7 Dividend Growers to Buy Now (for 162%+ Upside)

How much money should you allocate to dividend growth?

As you can see – as much as possible. This strategy is such a “slam dunk” for investing returns that there’s no reason to collect more current yields than you need right now. If you can “forego” some amount of income today, I would encourage you to consider investing that capital into dividend growers.

It’s a simple three-step process:

Step 1. You invest a set amount of money into one of these “hidden yield” stocks and immediately start getting regular returns on the order of 3%, 4%, or maybe more.

That alone is better than you can get from just about any other conservative investment right now.

Step 2. Over time, your dividend payments go up so you’re eventually earning 8%, 9%, or 10% a year on your original investment.

That should not only keep pace with inflation or rising interest rates, it should stay ahead of them.

Step 3. As your income is rising, other investors are also bidding up the price of your shares to keep pace with the increasing yields.

This combination of rising dividends and capital appreciation is what gives you the potential to earn 12% or more on average with almost no effort or active investing at all.

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

3 Shocking Ways to Get a Double-Digit Dividend From Amazon

Brett Owens, Chief Investment Strategist 

Amazon.com (AMZN) blatantly defies all of my investing rules, and gets away with it every time.

It drives me crazy! But instead of staying mad, we’re going to “get even” by banking some backdoor payouts the firm’s landlords dish out.

Of course Jeff Bezos’ company pays no dividend, nor does it buy back shares (and as I’ve written before, growing dividends and well-timed buybacks are sacred cows to me—and 2 keys to a rising share price).

In fact, the e-commerce giant has done the opposite, thumbing its nose at repurchases—busily adding to its share count since the late ’90s!

Amazon Waters Down Its Shares …

But just to show you what an incredible business this is, you can see that even though Amazon has diluted investors’ holdings with these share issues, that’s done zilch to crimp its massive per-share earnings and cash-flow growth:

… and Banks Huge Profits Anyway

To top it off, this stock is the definition of pricey: it’s never traded below 25 times earnings in its history—and today it trades at an absurd 158 times!

It’s infuriating for a value-focused, dividend-growth investors like us, but the numbers don’t lie: if you steered clear of Amazon, you missed one of history’s greatest stocks, with an unimaginable 101,000% gain in the since its IPO.

Too Expensive? Think Again

Tapping Amazon’s “Hidden” Dividend

So am I pounding the table on Amazon stock today?

Nope.

As much as I admire what Bezos has done here, I’m a dyed-in-the-wool dividend investor, and I still can’t make the leap.

So instead, we’re going to take a different tack, tapping big cash dividends from Amazon indirectly.

We’ll do it by buying smartly run high yielders that profit from the same megatrends Amazon is riding (and in many cases, the same megatrends the mavens at Amazon’s Seattle headquarters invented in the first place).

Think of it as a back-door way of wringing a dividend from a company that refuses to pay us one on its own.

Our first pick is about as close as you can get to doing just that. It literally is Amazon’s landlord: it rents space to the e-tail colossus and drops them straight into our accounts as dividends!

Amazon’s “Hidden” Dividend: Pick No. 1

I’m talking about Duke Realty (DRE), a 46-year-old real estate investment trust (REIT) with 499 warehouses in 20 markets.

Amazon is Duke’s No. 1 tenant, and Duke knows its best customer well, having teamed up with it for more than a decade:

A “Prime” E-Commerce Play

Source: Duke Realty NAREIT REIT Week Presentation

The e-commerce leader isn’t the only online-shopping play on that list, either.

Web-based furniture retailer Wayfair.com (W)—whose revenue surged 47% in the second quarter—has a spot, too, as do brick-and-mortar plays with growing online divisions, like Home Depot (HD) and Target (TGT). And courier XPO Logistics is another strong play on the online-shopping boom.

It is true that you’re only getting a 2.8% dividend yield here, but Duke has been goosing its payout in recent years and even handed shareholders a gaudy $0.85 special dividend last December, after unloading its medical-office business.

That was a canny move that frees up management to smoke out more opportunities in its core warehouse operation.

This was also the second special dividend in three years—and Duke can afford another, with the regular dividend eating up just 52% of funds from operations (FFO, the REIT equivalent of earnings per share), a very low ratio for a REIT.

Finally, Duke trades at 21.6-times the midpoint of management’s just-boosted 2018 FFO forecast of $1.33. That’s still a good level for a company that truly is Amazon’s landlord—and way cheaper than buying Amazon itself!

Amazon’s “Hidden” Dividend: Pick No. 2

I know American Tower (AMT) doesn’t seem like an online-shopping play, but it’s a no-brainer that as we move more of our lives online (including shopping), we’ll gobble up more mobile data.

And the cell-tower operator is cashing in through its 170,000 towers. Check out the chart below, which compares growth in the number of cellular subscriptions in the US with rising e-commerce sales:

2 Tech Megatrends With Huge Growth Ahead

Two things stand out here: first, while cell subscriptions grew more slowly, they didn’t miss a beat during the Great Recession, while e-commerce stalled out. That shows you just how durable this business is.

And keep in mind that this chart just focuses on the US. With the rollout of 5G technology, breakneck growth of the Internet of Things and ballooning middle classes in developing countries, there’s plenty of runway for AMT, which has 76% of its towers outside America’s borders.


Source: Digital Realty Trust August 2018 investor presentation

Management agrees: in fact, it’s so confident that it hikes AMT’s dividend every quarter. That’s paid off handsomely for shareholders, whose payouts have surged 182% in just the last five years.

More payout growth is dialed in: AMT’s adjusted per-share FFO surged 13.1% in the second quarter, and the company sent just 39% of its last 12 months of adjusted FFO out the door as dividends—ridiculously low for a REIT.

Finally, this stock’s a screaming bargain at 19.7 times the midpoint of management’s 2018 adjusted FFO forecast of $7.52 per share (which in itself is up a nice 12% from 2017).

So don’t be thrown off by AMT’s meager 2.1% dividend yield. It’s a smokescreen for a company whose dividend—and share price—have lots of jump left.

Amazon’s “Hidden” Dividend: Pick No. 3

Now that we’ve covered bursting warehouses and soaring data use—both of which we can directly tie to Amazon—let’s get into the guts of any e-commerce setup: the places they store the computer hardware that makes it all happen.

Enter Digital Realty Trust (DLR), which houses this gear for 2,300 customers at its 198 data centers across the globe.

As you probably know, demand for these facilities is exploding, due in no small part to booming e-commerce. Because every online purchase, Google search or Facebook “Like” on the planet is processed through a data center somewhere.

DLR buys and develops these facilities, then leases them to its clients, which include some of the biggest names in e-commerce, telecom, finance and media, including serial disrupters like Uber.

This top-quality tenant list is dropping a rising tide of cash into DLR’s coffers; in Q2 alone, FFO jumped 35%—and management is dutifully handing that cash to investors in the form of a dividend whose growth is accelerating:

An “Accelerating” Dividend—With Plenty More to Come

The best news? You can expect another big hike this March, when DLR usually rolls out payout hikes.

Why do I say that?

Because the company’s state-of-the art portfolio continues to draw in tech’s elite, which are in full-on expansion mode. That’s driving management’s bullish FFO forecast: the midpoint of its 2018 range is $7.51, up a nice 7% from 2017.

But we’re not just counting on FFO to backstop our payout growth. DLR also boasts a payout ratio of 61% of FFO—again, ridiculously low for REIT-land, where these ratios regularly top 80% and are still rock solid thanks to the predictable rent checks REITs collect.

And here’s something else that’s ridiculously low: DLR’s valuation, at just 18.8 times the midpoint of management’s 2018 FFO estimate of $6.55 a share. That’s a steal for a company that’s riding e-commerce, data usage, cloud computing and pretty well every other tech megatrend there is.

Forget Amazon: These “Hidden” Dividends Will Double Your Money FAST

Unless you’ve got a time machine and can go back and buy Amazon 10 years ago, or even better in 1997, you’re stillbetter off buying rapid dividend growers—especially accelerating dividends like DLR’s runaway payout.

Because I know I don’t have to tell you that you can only spot megatrend winners like Amazon in hindsight.

Back in 1997, if someone told you that you needed to put your nest egg in a tiny company selling books on something called the Internet, you probably would have thought they were nuts!

Dividend growth, on the other hand, is a slam-dunk strategy that’s proven itself over and over and over again throughout history.

It’s a simple 3-step process:

Step 1. You invest a set amount of money in a “dividend accelerator” like DLR and immediately start getting regular returns on the order of 3%, 4% or maybe more.

That alone is better than you can get from most other conservative investments now!

Step 2. Over time, your dividend payments go up, increasing the yield on your original buy as they do—so you’re eventually earning 8%, 9% or 10% a year on your upfront investment.

That should not only keep pace with inflation and rising interest rates, it should stay ahead of them.

Step 3. As your income is rising, other investors are also bidding up the price of your shares to keep pace with the increasing yields.

This combination of rising dividends and capital appreciation sets you up to earn 21.1% or more a year, on average, with almost no effort or active investing at all.

So which “dividend accelerators” should you buy today?

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!

Earn $40K in Dividends on $500K? My 8-Step Plan to 8% Yields

Even with the 10-year Treasury “rallying” of late, it still pays just 2.9%. Put a million bucks in T-Bills, and you’re banking $29,000 per year. Barely above poverty levels!

Hence the appeal of closed-end funds (CEFs), which often pay 8% or better. That’s the difference between a paltry minimum-wage income of $29,000 on a million saved or a respectable $80,000 annually.

And if you’re smart about your CEF purchases, you can even buy them at discounts and snare some price upside to boot!

Here’s why: CEFs (unlike their ETF and mutual fund cousins) have fixed pools of shares. Meanwhile their prices trade up and down like stocks – which means these funds can sometimes trade at a discount to the value of their underlying assets!

And even though stocks-at-large are expensive today, this rising-rate (ironically) environment has income seekers scared of CEFs. Many of my readers have actually asked me if they should bail on our high paying vehicles. The financial media is in their heads, and they’re concerned that their funds are suddenly going to drop in price.

Please, don’t toss yourself into poverty by following this misguided herd!

With the markets in flux, we should review the principles of successful CEF investing. They are more nuanced than classic stock picking, because we’re analyzing managers, strategies and holdings versus simple businesses models. After all, for lazy investors, it’s easier to count on dividends via AT&T’s (T) declining subscriptions than it is to determine how much income for payouts Cohen & Steers’ Infrastructure Fund (UTF) has!

(The answer? Plenty. UTF not only pays 8% today, but the fund has raised its payout four of the last five years.)

Step #1: Be Careful With Price Charts

PIMCO’s Dynamic Income Fund (PDI) has been a great performer since its inception almost five years ago – but it’s price chart understates its brilliance:

Looks Like Pedestrian 33% Gains…

… Until You Add the Payouts Back for +192%!

Make sure the chart you’re reading includes dividends paid (so that it reflects total returns).

Step #2: Demand Alpha

Past performance can be an educational indicator about the quality of the management team and its strategy. PDI has had the benefit of the brightest bond minds on the planet calling the shots (from “Bond King” Bill Gross to current superstar Dan Ivascyn) and it delivered 192% total returns over the last six years, with most of these coming in the form of cash payouts.

Meanwhile Alpine’s Global Dynamic Dividend Fund (AGD) has delivered the worst of all worlds to dividend investors. It crashed harder than the broader markets in 2008, then provided almost no rebound as stocks themselves bounced back.

Dynamic dividends? Not here – this dog is still down 18% over the last eleven years!

More Downside, None of the Upside

Don’t be fooled by the siren song of its fat 7.6% current yield. Which brings me to our next point…

Step #3: Check Every Yield’s Back Story

Some funds pay big distributions that look great – but they’re not sustainable. However they continue to attract new (sucker) investors because they are able to fund their payouts – they just happen to shed their net asset value (NAV) at a similar pace!

For example, here are three more dogs that have grinded sideways or worse over the last three years (even when accounting for dividends paid) as the S&P 500 has soared:

Big Yields, But Lackluster Returns

Step #4: Know What’s Funding Your Distributions

A closed-end fund can pay you from some combination of:

  1. Investment income,
  2. Capital gains, and/or
  3. Return of capital.

Of the three, investment income is preferable because it’s usually the most reliable. Many CEFs pay monthly distributions, so it’s best if they match up their payouts with steady income streams themselves.

Capital gains from rising bond or stock prices can further boost distributions. But they are at risk of disappearing if the markets turn unfavorably.

Finally, everyone assumes return of capital is bad, because it’s simply shipping your money back to you. But as my colleague, the “CEF professor” Michael Foster, recently wrote, it’s often very good for investors.

What’s more, if the fund trades at a sizeable discount, this can actually be a savvy way to kick start the closing of a discount window. More on this shortly.

Step #5: Don’t Be Cheap About Fees

Most investors are conditioned by their experience with mutual funds and ETFs to search out the lowest fees, almost to a fault. This makes sense for investment vehicles that are roughly going to perform in-line with the broader market. Lowering your costs minimizes drag.

Closed-ends are a different investment animal, though. On the whole, there are many more dogs than gems. It’s an absolute necessity to find a great manager with a solid track record. Great managers tend to be expensive, of course – but they’re well worth it.

The stated yields you see quoted, by the way, are always net of fees. Your account will never be debited for the fees from any fund you own. They are simply paid by the fund itself from its NAV.

Step #6: Ignore Short-Term Interest Rates

Many funds are selling at bargain prices today thanks to the headline worry that higher rates hurt CEFs. But that’s just not true.

Libor is tied closely to the Fed funds rate. And the last time the Fed hiked its rate significantly, CEFs did just fine.

In June 2004, Fed chair Alan Greenspan began boosting rates from then-historic lows. Over a two-year period, he increased the federal funds rate from 1% to 5.25%. An earthquake.

How’d CEFs perform? Three prominent funds all outperformed the market during Greenspan’s aforementioned run:

Higher Rates No Problem for Top CEFs 2004-06

Regular readers will recognize the Greenspan example quite well, because I’ve been using it repeatedly to drive this point home. And I’m glad to share another data point – our own profits from this rate hike cycle!

The chart below illustrates three of my CEF recommendations rolling higher in lockstep with the Fed funds rate (and that rate is the orange line stair stepping from the lower left to the upper right):

This Rate Hike Cycle, Our CEFs Have Rolled Higher

Once again, the best CEFs are gaining value in the face of rate rises.

Step #7: Demand a Discount

One aspect of the CEF structure lends itself perfectly to contrary-minded investing: fixed pools of shares.

Mutual funds issue more shares whenever they want. But closed-ends have a fixed share count, with their funds trading like stocks. As a result, from time to time a fund will fall out of favor and find its shares trading at a discount to its NAV.

This is basically “free money” because these underlying assets are constantly marked to market. If a fund trades at a 10% discount, management could theoretically liquidate the fund and cash out everyone at $1.10 on the dollar immediately. Or it can buy back its own shares to close the discount window (and boost the share price).

A discount is a great start, but do make sure that management has a plan to close that window!

Step #8: When Possible, Buy Along Insiders

It’s rare to see any fixed income manager put his or her own money on the line at all, unfortunately. According to a recent Barron’s article, nearly half of all closed-end funds have no insider ownership whatsoever.

Why would we want to own any of them, if the managers don’t?

The 3 Best Closed-End Funds to Bankroll Your Retirement

Closed-end funds are a cornerstone of my 8% “no withdrawal” retirement strategy, which lets retirees rely entirely on dividend income and leave their principal 100% intact.

Well that’s not exactly right.

Their principal is more than 100% intact thanks to price gains like these! Which means principal is actually 110% intact after year 1, and so on.

To do this, I seek out closed-end funds that:

  • Pay 8% or better…
  • Have well funded distributions…
  • Trade at meaningful discounts to their NAV…
  • And know how to make their shareholders money.

And I talk to management, because online research isn’t enough. I also track insider buying to make sure these guys have real skin in the game.

Today I like three “blue chip” closed-end funds as best income buys. And wait ‘til you see their yields! These “slam dunk” income plays pay 8.7%, 8.9% and even 10.1% dividends.

Plus, they trade at 10 to 15% discounts to their net asset value (NAV) today. Which means they’re perfect for your retirement portfolio because your downside risk is minimal. Even if the market takes a tumble, these top-notch funds will simply trade flat… and we’ll still collect those fat dividends!

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 

Invest Alongside the World’s Top Managers for Dividends Up to 13%

No one likes digging through pages of regulatory filings, but they can often yield valuable information.

For example, institutional investors with at least $100 million of assets must file a 13F form with the Securities and Exchange Commission once a quarter. Think of this as a quarterly scorecard or a window into the holdings of some of the most successful and often secretive investors in the market.

Should you follow suit and piggy-back some of these trades? Well, it’s certainly cheaper than the $1 million minimum buy-in it often takes to invest with the most successful hedge funds, if you’re even invited.

However, there are two important caveats with 13F’s: First, the data can be stale. Holdings at the end of the second quarter aren’t often reported until mid-August, which is an eternity in some investing circles. In addition, a lot of these investors keep their cards close to the vest, so you can’t be entirely sure the purchase is a vote of confidence in the dividend.

The following two stocks have been gleaned from the pages of recent 13F filings and offer readers the opportunity to invest alongside some of the most successful managers on Wall Street.

Top Investment Manager Stock No. 1: New Leader Can Resuscitate Growth

Plains Group (PAGP) is the general partner for energy midstream operator, Plains All-American Pipeline (PAA). The company’s underlying assets transport and store crude oil and natural gas across North America. While commodity prices can be volatile from one-quarter to the next, 93% of Plains’ business is fee-based, providing more stability.

Plains Group was recently listed as a new position of Keith Meister’s Corvex Management. Meister was previously the chief executive officer of Icahn Enterprises (IEP), a vehicle of noted activist investor, Carl Icahn.

Meister and Corvex have yet to show any activist intentions with the company, which is already going through a transition. Plains Group yields 4.6%, in part because of a 45% cut in its quarterly distribution last year. Willie Chiang, COO of the company, is also stepping up to become chief executive officer later this year. He is replacing Greg Armstrong, who was at the helm of Plains for more than two decades.

In the meantime the company’s investment thesis is two-fold: grow its midstream business in the Permian Basin and reduce debt on the balance sheet. Management made progress on both fronts in the second quarter and boosted its earnings before interest, taxes, depreciation and amortization (EBITDA) guidance by 4% earlier this month.

Plains is seeing higher growth in its supply and logistics division and has cut debt by over $1 billion in the past four quarters. Management expects 179% coverage of the dividend this year and is targeting another double-digit increase in adjusted EBITDA in 2019. The company still has progress to make in the coming quarters, but could soon begin rebuilding its dividend.

Top Investment Manager Stock No. 2: Propane Dividend Could Still Burn Investors

Ferrellgas Partners (FGP) could certainly be seen as a contrarian pick, as the master limited partnership has been as volatile as the propane the company sells under the popular Blue Rhino brand. The shares trade in the low-single digits, sport a 13% dividend yield and recently showed up as a new holding of Leon Cooperman’s Omega Advisors.

Whatever potential value Cooperman and Omega see in Ferrellgas, it likely isn’t in the lofty dividend yield. Similar to Plains Group, the company slashed its payout in late 2016, but even the current payout of $0.10 a quarter could be in peril.

Earlier this month, management declared the next distribution to be paid in September, which carried an ominous warning. Ferrellgas isn’t generating enough cash to cover the fixed charges of its $2 billion mountain of debt. Because of these covenants in the bonds, the company has said it may not be able to pay its dividend beginning in December.

Bondholders always receive their interest payments before stockholders get paid dividends. This is especially the case of Ferrellgas, whose balance sheet is “upside down” and has negative shareholder equity.

Following Carl Icahn or your other favorite investors into new stocks is a popular strategy. But buyer beware— the reliability of the dividend yield may be secondary to these top managers. They are often placing bets in the midst of a diversified portfolio and willing to wait several quarters, if not years to see a positive return.

If, however, you’re nearing retirement, or have already retired and are living off income from your investments, there are better bargains to be had for secure 7% to 8% yields with upside and monthly payouts to boot.

Like These Plays: The 8 Best 8% Dividends with Big Upside to Buy Today

The biggest investment managers and Wall Street brokers say you can’t have both the income and safety of bonds and the upside of stocks. You either have to pay hefty fees or be “lucky” enough for the privilege to be invited to invest with them.

They’re wrong. They don’t realize that the nine bond funds in our Contrarian Income Report portfolio have delivered average annualized returns of 23.9% (including dividends)!

Our three top picks today are poised to continue the tradition. These funds are a cornerstone of our 8% “no withdrawal” retirement strategy, which lets retirees rely entirely on dividend income and leave their principal 100% intact.

Well that’s not exactly right. Their principal is more than 100% intact thanks to price gains! Which means principal is actually 110% intact after year 1, and so on.

To do this, we seek out closed-end funds that:

  • Pay 8% or better…
  • Have well-funded distributions…
  • Trade at meaningful discounts to their NAV…
  • And know how to make their shareholders money.

And we talk to management, because online research isn’t enough. We also track insider buying to make sure these guys have real skin in the game.

Today we like three “blue chip” closed-end funds in particular. And wait ‘til you see their yields! These “slam dunk” income plays pay 8.5%, 8.7% and even 8.9% dividends.

Plus, they trade at 10-15% discounts to their net asset value (NAV) today. Which means they’re perfect for your retirement portfolio because your downside risk is minimal. Even if the market takes a tumble, these top-notch funds will simply trade flat… and we’ll still collect those fat dividends!

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

9 Upcoming Dividend Hikes to “Front Run” Today

If you want to clobber the stock market – and double your money every two or three years – then buying companies with accelerating dividends is the easiest and safest way to do it.

And I’ve got good news for you: there are nine blue chip payers likely to raise their dividends next month. So why not “front run” this good news and consider these shares now?

The benefit of dividend hikes? Getting a fatter income stream is an obvious reason, but it’s just the start. A rising payout acts like a lever on a company’s share price, prying it higher and higher with every single dividend hike.

The pattern is plain as day in this chart of NextEra Energy (NEE), a supposedly “boring” utility that’s been quietly sending its shareholders bigger and bigger dividend checks over the past five years.

Look at how NEE’s stock has jumped with each and every dividend hike NextEra has delivered—and how its latest monster payout hikes have magnified those gains:

Bigger Dividend Hike, Fatter Share Price Pop

NextEra just delivered a 13% dividend hike earlier this year. But you and I can do even better by focusing on stocks that are due for a payout hike ASAP. Here are nine raise announcements we’ll probably see next month.

American Express (AXP)
Dividend Yield: 1.4%

American Express (AXP) announced in June that the Federal Reserve gave its adjusted capital plan the green light. As part of that plan, American Express will buy back $3.4 billion in shares between Q3 2018 and Q2 2019, and it’ll boost its dividend by 11% to 39 cents per share – the company’s seventh consecutive year of payout hikes. The official declaration should come sometime in the final week of September.

Another feather in the cap for AXP, which has recovered from its Costco (COST)-sparked woes in 2016, rallying for nearly two years to its current all-time-high perch.

American Express (AXP): Dividend Growth Leads the Charge!

Microsoft (MSFT)
Dividend Yield: 1.6%

Microsoft (MSFT) is the poster child for what should happen with a faithful dividend-growth stock – as the payout expands, so should the stock price.

Microsoft’s (MSFT) Price Has Finally Caught Up With Its Dividend

And come mid-September, the IT blue chip will likely announce its annual dividend increase.

Microsoft closed out its fiscal year with a boffo fourth-quarter report released in July, announcing 17% top-line growth, 11% bottom-line growth and better-than-expected profits and revenues. Better still, its fiscal 2019 guidance surprised to the upside. And even after cranking up capital expenditures to build out its burgeoning cloud business, Microsoft still generated $7.4 billion in free cash flow.

Microsoft has gobs of money. It could do with a significant payout bump – the yield has been crushed by a 145% run in three years (a wonderful problem to have, if you’re an existing shareholder) – on what would be its 15th consecutive increase. It also may be ready to update its $40 billion buyback program initiated two years ago.

JPMorgan Chase (JPM)
Dividend Yield: 1.9%

Like American Express, JPMorgan Chase’s (JPM) next dividend increase is, ahem, money in the bank.

The Fed approved JPMorgan’s capital plan near the end of June, and that included an absolute whopper of a dividend-and-buyback package. JPMorgan will buy back an impressive $20.7 billion worth of shares between July 1, 2018, and June 30, 2019. But the real eye-opener is a 43% spike in the payout to 80 cents per share.

JPMorgan has been the cream of the big-bank crop over the past five years, doubling over that time as it has recovered and retooled following the 2007-09 financial crisis. JPMorgan has benefitted from (and will continue to enjoy the fruits of) continued economic expansion as well as a return to gradually rising interest rates … and shareholders aren’t being left behind. The stock has rocketed 120% higher over the past five years, and its dividend (including the expected hike, which should be announced in the second half of September) has grown 47% in that time.

JPMorgan Chase (JPM): One of the Best Big Bank Stocks

American Tower (AMT)
Dividend Yield: 2.0%

My readers should be plenty familiar with telecommunications infrastructure REIT American Tower (AMT), as it regularly shows up in my lists of dividend stocks to watch for payout hikes, so we’ll just do a quick check-up.

AMT isn’t setting the world on fire with a 6% year-to-date return. But when you look at the flat return for the Vanguard REIT ETF (VNQ), it’s clear this REIT is doing something right. And so it has! Second-quarter funds from operations (FFO) of $1.90 per share easily clubbed Wall Street’s expectations for $1.78. That came on revenues of $1.78 billion that also climbed over analysts’ estimates.

But American Tower’s draw is its impressive streak of 26 consecutive quarterly dividend increases – every three months since 2012, AMT has upped the ante like clockwork. Q3 should be no different, with the company typically making its announcement sometime in the middle of September.

Texas Instruments (TXN)
Dividend Yield: 2.2%

Chipmaker Texas Instruments (TXN) is another perfect example of dividend growth and capital appreciation going hand in hand:

Texas Instruments (TXN): A Chip Off the Ol’ Block

Texas Instruments, by the way, isn’t your typical chip play. When you think semiconductors, your mind probably conjures names like Intel (INTC)Nvidia (NVDA) and Advanced Micro Devices (AMD) that fuel graphics and high-end computing.

Texas Instruments is, in fact, increasingly focusing on cutting-edge technologies, including the Internet of Things, artificial intelligence and even blockchain – the tech behind Bitcoin. But its core business is the uninteresting but very necessary analog chips that power simple gadgets such as calculators and alarm clocks.

This one-two punch puts Texas Instruments in most of the devices in your house, your workplace – you name it. That has enabled this blue-chip chipmaker to explode like a growthy startup, all while fueling fantastic expansion in the dividend.

The next chapter in this dividend-growth story should come in mid-late September.

McDonald’s (MCD)
Dividend Yield: 2.5%

McDonald’s (MCD) smacked down the naysayers in 2017, showing that the world’s most ubiquitous fast-food chain still had gas in the tank with a red-hot 44% gain. But the Golden Arches have come back to earth in 2018, dropping 10% to make it one of the worst performers in the Dow.

But I can’t find much fault with the company. McDonald’s has posted earnings beats in both of its quarterly reports so far this year. Yes, same-store sales limped in a little bit for Q2, in part because the company’s $1-$2-$3 Menu hasn’t resonated the way analysts hoped it would. But I love the fast-food chain’s vow to become “more aggressive” on value and launch a “2-for-$5 mix-and-match” offering.

There’s little room for complaint on the dividend front, too. McDonald’s is a Dividend Aristocrat with 41 consecutive payout hikes under its belt – another raise, likely in the back half of September, would be No. 42. And MCD’s raises lately might not have been spectacular, but they’re decent, at about 25% growth since 2014.

OGE Energy (OGE)
Dividend Yield: 3.6%

No list of dividend-paying companies is truly complete without a utility stock, and that’s what we have in OGE Energy (OGE).

OGE isn’t as familiar as names like Southern Co. (SO) and Duke Energy (DUK). But its primary subsidiary, Oklahoma Gas & Electric (hence the OGE), serves more than 843,000 customers across Oklahoma and Arkansas. It also holds both limited partner and general partner interest in Enable Midstream Partners, LP (ENBL), which owns natural gas and crude oil infrastructure.

It’s also a little growth monster for the utility space. While the Utilities Select Sector SPDR Fund (XLU) is up just 2% in 2018, OGE shares have ripped off a market-beating 11% run. That came on the back of a stellar fiscal Q1 report that saw residential revenues grow 5.1% to prop up the top line by 8%, and a massive 50% pop in earnings to 27 cents per share – far better than the 17 cents Wall Street’s pros expected.

OGE Energy is no slouch on the dividend front, either. The payout has exploded by 48% since 2014, and you can expect another improvement to the dividend in the last week or two of September.

Can OGE Energy’s (OGE) Generosity Push Shares Over the Top?

Verizon Communications (VZ)
Dividend Yield: 4.5%

Telecom giant Verizon Communications (VZ) hasn’t exactly been blowing the doors off their hinges with its annual payout hike. While you can find plenty of companies averaging double-digit dividend growth every year, Verizon has managed to grow its distribution by only 11% since 2013 – a snail’s pace.

It’s understandable. Operating and free cash flow have been trending downwards for years as the telecom industry has grown completely saturated, forcing the likes of AT&T (T) and Verizon to slug it out against lower-cost providers such as T-Mobile (TMUS) and Sprint (S).

That said, investors could be in for something a little special this time around. The change in corporate tax rate benefits just about every U.S. business in one way or another, but it does wonders for companies such as Verizon that derive almost all of their revenues domestically. VZ’s corporate tax rate should sink from 35% to between 24%-26%. While Verizon still has other cash considerations, such as building out its 5G infrastructure, the telecom may, in either early September or very late August, take the rare opportunity to give shareholders something to cheer about.

Because sub-5% stock gains in five years sure aren’t doing the trick.

Verizon (VZ) Is Crawling Along … Just Like Its Dividend

Realty Income (O)
Dividend Yield: 4.6%

Realty Income (O) already has secured its place in the minds of investors as “The Monthly Dividend Company” – not just by paying monthly dividends, but by advertising this fact everywhere, including on the front page of its website.

But in September, it also will be eligible to join the ranks of the Dividend Aristocrats via its 25th consecutive payout hike.

Realty Income (O), while one of the most trusted REITs on Wall Street, hasn’t had the most promising 2018. Shares have barely budged northward, but it must be Wall Street following the narrative of the retailpocalypse rather than reality. In Q2, this retail REIT reported an increase in occupancy – 98.7% that was better year-over-year and quarter-over-quarter. Adjusted funds from operations (AFFO) climbed 5%, too.

That surely will help Realty Income afford its 84th consecutive quarterly increase, which you can expect to be announced sometime around the second week of September.

7 Dividend Growth Stocks with 112% Price Upside or More

You’ve probably noticed that a lot of these dividend-growth dynamos have pretty chintzy-looking yields. That’s OK. In fact, that’s a “hidden” bullish signal.

You see, the very best dividend stocks rarely show high yields because their prices keep rising in line with the increasing payments.

Most people don’t realize this. But those of us who do realize it stand to profit handsomely and almost automatically!

It’s a simple three-step process:

Step 1. You invest a set amount of money into one of these “hidden yield” stocks and immediately start getting regular returns on the order of 3%, 4%, or maybe more.

That alone is better than you can get from just about any other conservative investment right now.

Step 2. Over time, your dividend payments go up so you’re eventually earning 8%, 9%, or 10% a year on your original investment.

That should not only keep pace with inflation or rising interest rates, it should stay ahead of them.

Step 3. As your income is rising, other investors are also bidding up the price of your shares to keep pace with the increasing yields.

This combination of rising dividends and capital appreciation is what gives you the potential to earn 12% or more on average with almost no effort or active investing at all.

I’ve scoured thousands of stocks out there right now, looking for the very best companies that have both rising dividends and strong buyback programs in place … the kind of stocks that could easily spin off annual total returns of 12%, 17%, even 25% or more … doubling your money in very short order.

Right now, at this very moment, there are 7 in particular that I think you should consider buying.

They stand to do well no matter what the broad market does … regardless of what happens in Washington … and irrespective of interest rate trends.

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!

4 Unstoppable Megatrend Stocks to Buy Now (and 2 to Avoid)

You’ve no doubt seen tons of articles splashed across the Web (over)hyping the hottest investing trends to jump on now. But which promising technologies can we actually tap for payouts and dividends (preferably today)?

The “mainstream” list is endless: cryptocurrencies, marijuana stocks—even gene editing (where the white coats actually alter DNA to wipe out diseases like cystic fibrosis).

I hope you’re not taking the bait, because gambling on shaky themes like these can put a huge dent in your nest egg. Check out the stomach-churning ride pot stock Aurora Cannabis (ACBFF) has been on this year:

Aurora’s Bad Trip

That nasty fall even includes a 19% gain last week after Constellation Brands (STZ) invested $5 billion in Canopy Growth (CGC), the biggest marijuana stock by market cap.

And don’t even get me started on Bitcoin!

Bitcoin Crushes Retirement Dreams

Of course, we know neither of these wagers will put dividend cash in our pockets.

Big-Picture Thinking Is Key

That’s why, if you want to profit from huge trends remaking society, you need to zero in on megatrends like exploding energy demand, surging online shopping and retiring baby boomers. Shifts like these will power our price gains and dividends (with yields up to 9.2%, as I’ll show you below)—for decades.

Today we’re going to dive into 4 of these megatrends, plus my 4 top stock picks for cashing in on each one, starting with…

The Megatrend: The Web Beats Brick and Mortar

If you watch CNBC, you’ve may have heard Mad Money host Jim Cramer preach about the stay-at-home economy, where more folks entertain themselves, shop and order meals from home instead of going out.

And he’s right.

You only need to look at the sales of Netflix (NFLX), in blue below, and Amazon.com (AMZN), in red, over the last five years compared to their brick-and-mortar counterparts, AMC Entertainment Holdings (AMC) and Wal-Mart (WMT).

Online Sellers Pull Ahead

Too bad many of Cramer’s top “stay-at-home” stocks, like Take-Two Interactive Software (TTWO) and ConAgra Brands (CAG)—the latter due to its frozen-food business—pay low (or no) dividends. Heck, CAG even recently cut its payout!

CAG’s Stale Dividend

That’s far from the case for my favorite way to play this trend.

The Stock: Duke Realty

Imagine being Amazon’s landlord—collecting rent as the e-commerce giant spreads across the world … filling your warehouses as it does.

Well, imagine no more, because you can start (indirectly) collecting those checks through Duke Realty (DRE), a 46-year-old real estate investment trust (REIT) with 499 warehouses in 20 markets.

Amazon is Duke’s No. 1 tenant, and the REIT knows its best customer well, having worked with the online retailer for more than a decade:

A “Prime” E-Commerce Play

Source: Duke Realty NAREIT REIT Week Presentation

You are only getting a 2.8% dividend yield here, but Duke has been raising the payout in recent years and handed shareholders a nice $0.85 special dividend last December, after unloading its medical-office business.

That was a canny move that frees up management to smoke out more opportunities in its core warehouse operation.

The payout was the second special dividend in three years—and Duke can do much more, with the regular dividend eating up just 52% of funds from operations (FFO, the REIT equivalent of earnings per share), a very low ratio for a REIT.

Finally, Duke trades at 21.7-times the midpoint of management’s just-boosted 2018 FFO forecast. That’s still a decent level for a company that truly is Amazon’s landlord. You won’t find a more direct tie to the online shopping megatrend than that—and it will light up Duke’s share price and dividend for decades to come.

The Megatrend: Aging Baby Boomers

No matter what happens with the Affordable Care Act, we can be sure of one thing: healthcare spending will keep spiking higher. There’s no other way for it to go!

According to recent numbers from the Centers for Medicaid and Medicare Services, the nation will spend 5.5% more on healthcare every year through 2026. By then, we’ll be dropping $5.6 trillion on it annually.

Much of that rise will come from huge increases in costs for Medicare (up 7.4% annually) and Medicaid (up 5.8% a year). I don’t have to tell you who’s driving that increase: boomers, 10,000 of whom are turning 65 every day.

The Stock: Physicians Realty Trust

Our play to watch on retiring boomers is Physicians Realty Trust (DOC), which has 249 medical-office buildings, almost all of which (96%) are rented out to doctors, hospitals and healthcare systems.

One thing I love about DOC is its long tenant list, with no one client chipping in more than 6% of annualized base rent. That means the REIT avoids getting stuck with a big, trouble-prone tenant, a problem that’s beggared healthcare REITs in the past.

Here’s another plus: its tenants specialize in the services elderly folks need most, like orthopedic surgery and oncology, so you can bet its buildings will stay full.

Which brings me to the trust’s dividend, which clocks in at a gaudy 5.5%. And before you ask, yes, that payout is safe, accounting for a manageable (especially for a well-run REIT like DOC) 86% of FFO.

The real kicker is that you can buy in at just 16-times FFO. That’s a smoking deal, given DOC’s top-notch portfolio, price upside from the “gray wave” that’s surging our way, and it’s superb 5.5% dividend.

The Megatrend: Soaring Energy Demand

The strong global economy is goosing energy use, with demand rising 2.1% last year, doubling 2016’s rate, according to the International Energy Association.

All sources of power saw higher demand: coal, natural gas, oil and renewables. And that trend will continue: the US Energy Information Administration sees global energy demand spiking 28% by 2040.

The Stock: Duff & Phelps Global Utility Fund

Our play here is the Duff & Phelps Global Utility Fund (DPG), a closed-end fund (CEF) that owns major US utilities like NextEra Energy (NEE) and Enterprise Products Partners (EPD), along with big global names like French electric utility ENGIE (ENGI) and Canadian telecom BCE (BCE).

Two numbers stick out here. The first is DPG’s outsized 9.2% dividend, which is as consistent as they come.

A Retirement-Friendly Payout

Source: CEFConnect.com

The other? DPG trades at a ridiculous 10.1% discount to net asset value (NAV). That’s another way of saying that its market price is lagging the value of its portfolio by 10.1%. And since this fund has traded at narrower discounts (and even premiums) in the past, we can expect price upside as that markdown narrows.

But even if it stays where it is, you’re still getting 9.2% every year in cash. That discount also helps steady the dividend. Because while DPG’s yield on market price is 9.2%, its yield on NAV is 8.2%, a figure that’s easier for management to cover with investment returns.

The Megatrend: US Economic Growth

Finally, while I’d never go as far as to say recessions are a thing of the past, as my colleague Michael Foster recently reported, US economic numbers are sparkling. And I’m betting we’ve got plenty of room to run.

To wit:

  • The economy grew 4.1% in the second quarter, the fastest since 2014.
  • The unemployment rate fell to 3.9%, near 18-year lows.
  • According to FactSet, 73% of S&P 500 companies are reporting second-quarter sales that top analysts’ expectations.

So we’re going to bet on the roaring economy with a fund that gives us “one-click” exposure to the picks of one Warren E. Buffett.

The Stock: Boulder Growth & Income Fund

You won’t find a bigger cheerleader for America’s economy than Buffett, and that

shows up in the stock portfolio of Berkshire Hathaway (BRK.A), which is riddled with US success stories like Apple (AAPL), Costco Wholesale (COST) and Johnson & Johnson (JNJ).

And thanks to a CEF called the Boulder Growth & Income Fund (BIF), you can get access to Berkshire itself and Buffett’s top picks, while pocketing a 3.7% dividend—more than twice the payout on the average S&P 500 stock.

The best part: BIF is far cheaper than it should be, trading at a 15% discount to NAV, which basically means you can buy every dollar of the shares BIF holds for 85 cents.

As with DPG, that markdown builds in price upside as it erodes away, as it’s been steadily doing for more than two years.

Investors Slowly Catch on to BIF

That narrowing markdown has helped BIF crush the market as a whole.

Shrinking Discount Slingshots BIF Higher

The bottom line?

I expect BIF’s discount to keep narrowing (and its outperformance to continue) as the US economy rolls on and more folks realize how easy it is to double their dividends by swapping their miserly blue chips for this Buffett-friendly fund.

That means your buy window is still open—but it may not be for long.

Yours Now: An Entire 19-Stock Portfolio With Safe Cash Payouts Up to 10.4%

As I showed you above, REITs and CEFs are the solution to your income worries if you feel trapped “grinding out” dividend income with the pathetic sub-2% payouts paid by your typical stock.

And the great thing—as you can see with BIF and DPG—is that you can often make the switch to these cash-rich dividend buys without actually switching investments!

$40,000 in Income on $500k

I’ve got 6 more life-changing dividend plays to give you—all REITs and CEFs—that tap into the same bulletproof trends as the 4 picks above, with one crucial difference:

I’ve hand-picked these 6 dividend powerhouses to give you a steady $40,000 a year in income on a $500k nest egg! That’s an 8% average yield—and it’s why I call this my “8% No-Withdrawal Portfolio.” I can’t wait to show it to you.

That’s not all, either.

Because I just released a NEW issue of my Contrarian Income Report newsletter, with fresh updates on the 19 stocks and funds in our service’s portfolio, which hands our savvy CIR members massive yields up to 10.4%!

I want to send all 19 of these cash-rich plays your way, too. This latest issue just went out to members a few days ago, and your copy is waiting for you now.

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 

10 Dividend Doublers Ready to Soar

Moe Ansari, host of the popular Market Wrap radio show and podcast, asked me on air:

“Brett, how do you find dividend paying stocks that will double your money?”

He was intrigued enough by my analysis to ask me on his show, but I knew he was a bit skeptical as well. And that’s perfectly normal – even experienced investors and money managers like Moe think of dividend payers in terms of their current yields only.

Price appreciation potential often gets ignored, and the thought of achieving 100%+ profits from a safe dividend payer sounds absurd. But smart investors bank their payouts while their stocks double in price.

(Want to hear me describe this strategy in detail? Click this link for the full interview.)

Subscribers to my Hidden Yields service know the three-step formula that I explained to Moe well. In fact, our “dividend doubling” portfolio has earned 23.3% yearly gains since inception three years ago – which means we’re closing in on 100% profits already.

How’d we do it buying safe dividend paying stocks? Let me walk you through the simple three-step formula. (And shortly I’ll show you how to get your hands on my latest research, which features ten dividend stocks likely to double, too.)

Step 1: Buy Dividend Growth for 10%+ Annual Gains

On the show we discussed Verizon (VZ), which has piqued the interest of many income investors lately. The stock yields 4.6%, and the dividend is covered by monthly cell phone bills across America.

Here’s the problem buying Verizon in hopes of a double – it’s not going to happen. Its 4.6% yield would get us repaid in 15 years. That’s not fast enough for our purposes, so we would need to look to dividend growth to fill the gap and speed up the pace of our profits.

Problem is, Verizon raises its payout every single year. But it’s barely moving in absolute terms! A sleepy 7.3% cumulative dividend increase over the last four years has rocked its share price to sleep (+6% over the entire time period):

Verizon’s Dividend “Growth” Rocks Its Shares to Sleep

For double-digit price appreciation, we must buy dividends destined to grow by 10% or more annually in the years ahead. This means we need to find businesses that are booming (with higher profits driving higher payouts). To do so, it helps to focus on stocks that are threat-proof.

Step 2: Be Sure to Threat-Proof Your Purchase

The classic “Dogs of the Dow” strategy advises buying the then highest-yielding Dow Jones Industrial Average stocks, then holding onto them for a year. The idea is that higher yields are a signal of a beaten-up share price in which the business struggles are temporary. When business picks up again, so will the undervalued stock.

The problem using this strategy blindly today is that many businesses are becoming obsolete before our very eyes. Look no further than Jeff Bezos and his firm Amazon, which crushes entire sectors for sport additional growth.

To qualify for our Hidden Yields portfolio, a business model must be Amazon-proof, rate-proof and heck, even tariff-proof.

Incidentally, this doesn’t mean we must avoid all brick and mortar stores. Best Buy (BBY), for example, decided to take Amazon head-on in 2012 when turnaround CEO Hubert Joly took the helm. And not only did the electronics giant live to tell about it, but it’s now leveraging Jeff Bezos’ website as a shopping channel of its own!

In recent years, Joly has been smartly “doubling down” on the quality of its retail stores (which Amazon doesn’t have). This has powered impressive free cash flow (FCF) growth, which has in turn driven serious stock returns:

Expert Service. Unbeatable Stock Price.

What else doesn’t Amazon have? A dividend, of course. Meanwhile Best Buy pays one, and its growth has been spectacular. Joly & Co. just raised their dividend by 32%. This “high velocity payout” is now up 165% in the last five years!

Its stock has followed its dividend higher, delivering 187% total returns (including those payouts). But are BBY shares truly a best buy today? It depends if the price is still lagging its payout.

Step 3: Greedy for Gains? Only Buy a Dividend That Lags

Dividends are magnets that pull their share prices along with them. If you’re looking for the stock market’s tail that wags the dog, pay attention to the payouts attached to a given share price.

Steps one and two help us lock in double-digit yearly gains. But if we’re looking for quick triple-digit (100%+) upside, we should only buy stocks that are lagging their payouts.

Texas Instruments (TXN) is a great example of a stock we’ve profited from in Hidden Yields (+46% returns in the 14 months we’ve owned it).

Since 2012, its share price (blue line below) as consistently lagged its payout (orange line below). Try as it might, TXN the stock (+358%) hasn’t been able to catch up with TXN the dividend (+464%):

TXN’s Magnetic Dividend Drives 358% Stock Gains

Since dividends follow their share prices higher, we can make the most money by buying when these payouts are most likely to “snap higher” towards their runaway dividend curves.

In other words, we buy the price dips when the dividend appears to be running away. Anyone who says you can’t time stocks hasn’t used this surefire strategy for buying shares ready to “catch up” to their runaway payouts.

It’s simple:

  1. Plot a stock price versus its dividend,
  2. Look for a “lag” between the shares and the payout, and
  3. Buy any big lags you see.

Bonus: An Extra “Steroid” for Upside

The stock market can do its own thing over any set of days, weeks or month. But over many years, dividends are the tail that wags the (price) dog. As payouts go, so will their corresponding stock price.

This is where share repurchases become a compelling natural steroid for our portfolio. When management teams repurchase their own stock smartly (when it’s cheap), they reduce the number of outstanding shares. Which means any dividend raises get an added boost on a per share basis.

Ideally, we look for a pattern like this one. This firm has reduced its share count (red line) by 10.8%. It’s tripled its dividend per share over the same time period. And its stock hasn’t kept pace, indicating pent up value (it has another 85% to go to catch up!)

Share Count Down, Dividend Up & Price is Due

This stock boasts an ideal setup for us. Shares are too cheap, the business owns a profitable niche with business momentum, and the broader investing herd isn’t paying attention because they don’t understand how the company truly makes money.

If you like this setup, you’ll LOVE nine more that I’ve identified. All of these stocks pay dividends today. And they’re all likely to double your money in the months ahead.

Coming This Friday: 10 Dividend Payers with 100% Upside

How much money should you allocate to pursuing dividend stocks that will double your money?

As you can see – as much as possible. This strategy is such a “slam dunk” for investing returns that there’s no reason to collect more current yields than you need right now. There are three big benefits to buying dividend payers that are likely to double your money.

Benefit 1. You invest a set amount of money into one of these “hidden yield” stocks and immediately start getting regular returns on the order of 3%, 4%, or maybe more.

That alone is better than you can get from just about any other conservative investment right now.

Benefit 2. Over time, your dividend payments go up so you’re eventually earning 8%, 9%, or 10% a year on your original investment.

That should not only keep pace with inflation or rising interest rates, it should stay ahead of them.

Benefit 3. As your income is rising, other investors are also bidding up the price of your shares to keep pace with the increasing yields.

This combination of rising dividends and capital appreciation is what gives you the potential to earn 20% or more on average with almost no effort or active investing at all.

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

3 Unloved High-Yielders That Will Rise With Rates (and pay up to 7% in cash!)

Once again, almost everyone has gotten sucked in by a tired investor slogan that’s dead wrong—and it’s costing them big gains (and income).

But that’s good news for contrarians like us, because we can bank some easy profits thanks to this all-too-predictable reflex.

That’s especially true now that the Federal Reserve has sent out a blaringly obvious signal that it’s stuck to its rate-hike track, calling the economy “strong” after its latest meeting last week.

But let’s not get ahead of ourselves. Before I go further, the shopworn myth I’m talking about is that REITs nosedive when interest rates rise.

Many folks just can’t be talked out of it, despite all evidence to the contrary, including the fact that REITs skyrocketed during the last sustained rising-rate cycle, in 2004–06.

Taking the Short View

This “wisdom” is deceiving because it looks true: around the time the Fed raises rates or the yield on the benchmark 10-year Treasury takes off, REITs do take a hit.

To see this in action, check out the movements of the Vanguard Real Estate ETF (VNQ) and the yield on the 10-year Treasury in the first two months of 2018. There’s no doubt the higher Treasury yield weighed down REITs back then:

Rates Up, REITs Down?

But that’s a very short timeframe—just two months! And folks who dumped perfectly good REITs over the side back then have missed out on a huge rally since.

Because after plunging as low as 13% on the year in February, VNQ has surged, mainly on strong REIT earnings as the growing economy powers rent increases and demand for space.

The result? As of this writing, VNQ is underwater by a mere 1.5%!

REIT Worriers Miss Out—and Our Buy Window Narrows

That means just one thing: our time to buy REITs cheap is running out.

But if you’ve been on the sidelines this year, don’t worry. Even though REITs aren’t the screaming deal they were six months ago, there are still bargains waiting for us in this rebounding sector.

I’ll show you 3 great examples (with dividend yields up to 5.2%) in a moment. First, we need to talk about one popular REIT sector that’s gotten way ahead of itself.

Retail REITs: Great for Gamblers, Lousy for Investors

Mall landlords are so popular, they’re all most people think of when they hear about REITs—totally forgetting all the other (and often higher-yielding) corners of the sector: everything from cell tower REITs to apartment landlords, self-storage operators and warehouse owners.

The truth is, retail REITs are fine to trade in and out of … in the short term.

For example, if you’d bought one of the biggest retail REITs out there—Simon Property Group (SPG)—when REITs hit their 2018 low on February 8, you’d have racked up a huge 18% gain in just 6 months:

Retail REITs: Short-Term Upside …

But stretch that out over a longer time—say over the last three years—and performance has been dismal: barely a 6% return! You’d have been way better off dropping your cash into the SPDR S&P 500 ETF (SPY).

… But Longer-Term Mediocrity

I know what you’re thinking: “Brett, retail REITs like Simon have outperformed in the past—and for long stretches, too.”

That’s true. But much of that growth came before Amazon.com (AMZN) was taking a huge bite of mall tenants’ bottom lines, as it is today.

And the fact is, while some mall owners are having success re-leasing shuttered locations of Payless Shoe Source, RadioShack, Toys R Us and Bon-Ton Stores—just a few of the major retailers to go bankrupt last year—many still have a long way to go.

The numbers tell the tale: US malls are at their lowest occupancy since 2012 (according to CNBC), with 8.6% of their floor space sitting empty. This at a time when consumer spending and GDP are exploding!

The bottom line? The easy gains in mall REITs have been banked, so it’s a great time to look to these 3 cheap non-mall REITs instead:

REIT Pick No. 1: A 37% Dividend Grower on a Roll

Alexandria Real Estate (ARE) is still available for a lower price than you could snag it for in early January. But that won’t last after the trust’s second-quarter results poured in last week—a greatest-hits list that was the envy of the REIT world.

To wit: revenue jumped 19% year over year; adjusted per-share funds from operations (FFO; the best measure of REIT performance) spiked 9%; and management upped its full-year FFO forecast to between $6.57 and $6.63 a share, a big leap from the $6.02 ARE generated in 2017.

There’s more to come: unlike the average mall landlord, ARE is enjoying superb occupancy, with 97.1% of its operating properties taken up as of quarter-end. That’s thanks to its focus on the growing life-sciences industry: biotech firms working on the latest breakthrough drugs.

Don’t confuse “biotech” with “speculative”: ARE’s clients are some of the biggest in the business, including Novartis AG (NVS), Bristol-Myers Squibb (BMY), Sanofi (SNY) and the Massachusetts Institute of Technology.

Which brings us to the dividend, which gives you the best of both worlds: a decent yield (2.9%) and superb payout growth. Over the last five years, ARE’s dividend has surged 37%—with the payout regularly getting bumped up twice a year:

Annual Raises Are for Suckers

The kicker?

The payout is safe, at just 53% of FFO (low for a REIT) and reasonably priced: ARE trades at 19.4 times the midpoint of forecast FFO, cheap for a stock with rock-solid tenants and a surging dividend (which will drag the share price higher as it rises).

REIT Pick No. 2: A “Surprise” Special Dividend on the Way

Don’t let the name fool you: Boston Properties (BXP) goes way beyond Beantown, with 164 office buildings (48.4 million square feet) in Boston, New York, Los Angeles, San Francisco and Washington, DC.

It cuts its risk further by evenly spreading those properties out among those growing metropolises. Check it out:


Source: Boston Properties

Like Alexandria, BXP boasts top-notch clients, including ultra-steady Verizon (VZ): in Q2, BXP leased 440,000 square feet to a subsidiary of the telecom giant and broke ground on its 627,000-square-foot office tower in Boston (50% owned). Verizon will lease 70% of that space for 20 years.

Meantime, management is calling for serious FFO growth, with forecast FFO coming in at $6.36 to $6.41 a share in 2018, up from BXP’s previous estimate and way ahead of last year’s tally of $6.22.

Like ARE, BXP’s shares are below where they were in January, and they boast a similar valuation: 20.6 times forward FFO—again, reasonable for a REIT with an above-average dividend yield (2.4%) a growing payout (up 23% in the past five years) and a healthy balance sheet (its $10.3 billion of long-term debt is around half its market cap).

Plus there’s a hidden benefit no one pays attention to: BXP loves to drop outsized special dividends on shareholders, having done so in three of the past five years. With the “regular” payout accounting for a meager 49% of forecast FFO, another one of these surprise “specials” could come our way any day.

Let’s buy now, before that happens.

REIT Pick No. 3: Familiar Monthly Payer Still Looks Great

STAG Industrial (STAG) gets a lot of space in my Contrarian Outlook articles. There are several good reasons for that: the warehouse owner pays dividends monthly; offers the highest dividend yield of our 3 picks (5.2%); and delivers strong dividend growth, too (the monthly payout has jumped 18% in the last five years).

How does management do it?

For one, they follow one of the oldest rules in investing: diversification. Right now, STAG has 360 buildings across 37 states and doesn’t lean too heavily on any one of them. Its client list is 312 strong, and these tenants are well balanced across sectors, as you can see here:

A Diverse Industrial Player

Source: STAG summer 2018 investor presentation

And second, management is constantly re-evaluating the portfolio, selling properties when it feels their values have peaked and plowing the cash into better opportunities. In just the second quarter, STAG bought 15 buildings for $185 million while unloading five for $31.2 million, making a gain of $6.3 million on those sales.

Meantime, the crew at the top does a great job of attracting and retaining tenants, resulting in STAG’s sky-high 96.6% occupancy rate and helping boost FFO by 9.8% year over year in Q2.

And yet STAG is still overlooked, trading at the same price it did in January and at a bargain 15.8 times FFO. The dividend is safe, too, at just 81% of FFO. Grab this one and kick-start its fat monthly payout stream now.

My Favorite 7.7%-Paying REIT Is Also Cheap Now—But Not for Long

My favorite REIT pick for 2018 boasts a higher dividend than the 3 trusts I just told you about—an eye-popping 7.7% yield—so you’re starting out with a huge CASH gain right off the hop here.

This trust lets us play monopoly from the convenience of our brokerage accounts! It’s a well-connected commercial real-estate lender that does all the work for us—building a secure, diversified loan portfolio featuring offices, retail space, hotels and multi-family units.

Management then collects the monthly payments, deposits the checks and sends most of the profits our way as dividends!

This REIT’s mammoth 7.7% payout is easily covered by FFO, and its loan growth is soaring, setting us up for massive dividend hikes, too!

Big Loan Growth Today, Big Payout Growth Tomorrow

Plus this firm has smartly eliminated interest-rate risk because it uses floating rates. In fact, it’s actually set up to make more money as interest rates move higher!

More Income as Rates Rise

It’s the perfect play as the Fed heads for two more rate hikes this year, and three or more in 2019!

And as this REIT’s income—and dividend—march higher, they’ll haul the share price right up along with them.

I’m ready to share my full REIT-investing strategy, plus the names of my top REIT pick and another urgent buy with a 7.5% payout, too.

Please don't make this huge dividend mistake... If you are currently investing in dividend stocks – or even if you think you MIGHT invest in any dividend stocks over the next several months – then please take a few minutes to read this urgent new report. Not only could it prevent you from making a huge mistake related to income investing, it could also help you earn 12% a year from here on out! Click here to get the full story right away. 

How to Bank $7,050 in Cash Payouts in 4 Weeks

I was not supposed to be sharing my favorite income strategy (for weekly payouts) with you today. But I convinced my publisher to make an exception – so please take advantage of his rare act of leniency and read this carefully today.

As you probably know I’m the rare “income guy” who thinks that these “elevated” Treasury yields are still a joke. As I write, the 10-year IOU from Uncle Sam is rallying back towards 3%. Is anyone who is not already rich retiring off of these yields?

A 3% yield on a $1 million portfolio generates just $30,000 per year before taxes. A better idea is my now-famous “No Withdrawal” Portfolio, which currently pays a blended 7.7% yield. Put the same million bucks into it, and you’ll receive $77,000 per year in dividends – with potential gains upside to boot:

BUT – what if you don’t have $1 million? Or need more in income than $77,000 annually? That’s where my dividend accelerator comes in.

Don’t Reach for Dicey Dividends – Accelerate Secure Ones, Instead

Many income investors get desperate and reach for double-digit yields. Unfortunately most are dividend traps. (If these payouts were safe, the stocks or funds would already be in our No Withdrawal Portfolio!)

Let’s pick on Triangle Capital (TCAP), a business development company (BDC) that pays 10.2% today. On the surface, this looks great. Unfortunately for each dividend payment investors receive, they tend to lose more in price erosion:

TCAP: It’s a (Dividend) Trap!

Low yields on blue chip stocks make yield seekers thirsty enough to consider traps like TCAP. Fortunately, there’s a better way – and it’s as easy as buying or selling any blue chip stock.

Rather than “buying and hoping” that a modest paying stock will also go up in price, I prefer to accelerate its 1% or 2% yield into weekly payouts that annualize to 20%+. Here’s how.

Safer – and More Profitable – Than Buying Stocks Outright

When I mention stock options to “basic” investors, they tend to have one of two levels of experience:

  1. They stay away from options (perceiving them as a form of gambling), or
  2. They buy options (which is a form of gambling).

Few are aware of the third – vastly superior – option:

  1. Selling options to the gamblers, banking the premiums as weekly income.

Why is it better to be a seller than a buyer? The real question is when – it’s better to be a seller than a buyer when options are within 30 days of expiration.

We have a phenomenon called “option decay” to thank. Stock options, after all, have two dimensions:

  1. Their strike price – the level the stock needs to be for the option to pay, and
  2. Their expiration date – the time-based deadline for this to happen.

Put options are bets that a stock will decline in price. Call options are bets on a bullish move higher. Both “decay” in price as they get closer to expiration, and their prices decline faster and faster the closer we get. As a seller, I like to catch the last 30 days – which really tips the odds in my favor:

I also prefer selling put options on high quality dividend payers and growers. And, if you choose right (and I’ll show you how in a minute), you’ll be amazed with the level of payouts that you can generate with this safe strategy (I’m talking about 20%+ cash returns per year).

It’s safe because we only use it on stocks we’d be happy to own outright. Selling puts on the best blue chip dividend payers gives us a “heads we win, tails we win” outcome:

  1. If the put expires worthless (the most likely scenario), then we bank the put premium free and clear without ever having to buy the stock.
  2. If the stock declines below the put price, then we still keep our premium – and we get to purchase the stock at a discount.

Once you learn this strategy, you’ll probably never want to buy a stock outright again. After all, why would you want to pay the “list price” when you can lock in a discount – or simply use the strategy to accelerate pedestrian yields to 20% or higher!

Here’s an Example Using an Excellent Utility Stock

“First-level” thinking says that utility stocks sink as interest rates rise. Since these “bond proxies” are nothing more than pretty yields to many investors, their payout attractiveness wanes as competition from fixed income rolls in.

This may be true for stalwarts like Duke Energy (DUK) and Southern Company (SO), which are merely giving their investors token annual raises. Their dividends have climbed only 12% and 7% respectively over the last three years combined.

These stocks are indeed basically bond proxies.

But not all utilities should be sold in advance of rising rates. There’s a notable exception that leaves these tortoises (and their middling dividends) in the dust.

NextEra Energy (NEE) is the largest developer of renewable energy in North America. The firm has been a fast grower for decades. It’s increased its dividend for 23 straight years.

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

Why NEE is the Best Utility to Buy

Thanks to the firm’s most recent payout raise, it now shovels out $1.11 per share per quarter (for 2.7% yearly). But we can accelerate this payout to 19.5% yearly.

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

$7,050 in Payouts in Just 4 Weeks

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

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

And again, these trades were as simple as buying or selling any stock (or CEF). We simply sold put options on NEE instead of buying or selling the stock itself.

It was just a different click of the mouse. And if you’re interested in turning NEE into your personal ATM, then this click will net you $1,850 in two-and-a-half short weeks:

Click Here for $1,850 in Payouts

Can I give you a hand with the specifics? If so, I have some easy-to-follow instructions that you can get started with today.

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.

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!
  • How to INSTANTLY boost the 2% to 3% dividend yield on a familiar stock like, say, Boeing (BA) to a 24%, 32% or even 51% payout.
  • You’ll also get 2 FREE trades that will fatten your account by THOUSANDS as soon as you enter them … and it will only take you 10 minutes, tops!
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.