There’s been a massive discount building in a pocket of the market where you can get big dividends that are entirely tax-free.

And I’m going to show you three “1-click” ways to tap this income investor’s wonderland today.

I know that tax-free anything these days sounds impossible, but in this case, I assure you it’s not. The key is investing in municipal bonds, which give you a passive income stream that is entirely tax exempt at the federal level. Plus it’s also exempt from state taxes in many situations, too.

That means a 4%-yielding municipal bond, or “muni,” is more like a 5.3%-yielding dividend stock for a family earning $100,000 per year—and that’s before we factor in state taxes.

Plus, there are some funds out there that hold munis that can get you much more than 4%. Below I’ll show you 3 of them with “regular” yields as high as 5.8%. First, let me tell you why now is the perfect time to buy them.

How to Amplify Your Muni Gains (and Dividends)

To get the biggest bang for your buck in munis, buy them through closed-end funds (CEFs). There are nearly 200 muni-bond CEFs out there, and most of them yield over 4%. And since they’re CEFs, several are priced far below their “true” value.

How can you tell?

Because the average municipal-bond CEF’s market price is 8.6% below its net asset value (NAV, or the market value of all the holdings in its portfolio).

That discount to NAV is a key number to watch in any CEF, and with a wide 8.6% average markdown, it’s easy to snap up a great muni-bond CEF cheap, then set yourself up for some nice price upside as that gap narrows to its traditional level.

Muni CEF Pick #1: A 4.9% Yield at a Massive Discount

A good example of a great marked-down fund is the Eaton Vance New Jersey Municipal Income Fund (EVJ), which pays a 4.9% dividend and currently trades at a massive 12.3% discount to NAV.

EVJ is no slouch in the performance department, either. On a NAV basis, the fund has earned an 11.5% return over the last 3 years, which is nearly double the gain posted by the muni-bond index fund, the iShares National Muni Bond ETF (MUB).

EVJ Demolishes the Benchmark

On top of that outperformance, EVJ’s yield is about twice that of MUB, making it both a market outperformer and a big yielder.

But should you worry that the fund focuses on just one state? In a word, no.

New Jersey’s average income is $62,554 per capita, the third highest in the union. And while the state’s GDP grew more slowly than that of America as a whole in 2017 (0.9% versus 2.1%), New Jersey is the eighth-wealthiest state in America, which means its growth rate will tend to be lower than those of poorer states.

That wealth has also resulted in fast-growing investment in infrastructure (this spending is budgeted to rise 172% in the next year), which tends to boost economic growth.

But here’s the real key: New Jersey revenues are set to rise 5.7% in 2019 after gaining in 2018. That 2019 estimate is far higher than the 4.2% growth in the state’s spending, so the bottom line here is that New Jersey’s fiscal health is getting better. And that makes EVJ worth considering for income and growth now.

Muni CEF Pick #2: Unbeatable Safety and 4.1% in Tax-Free Cash

Nonetheless, if you do want to go beyond a fund that focuses on just one state, you’d be smart to snap up the BlackRock Municipal Intermediate Duration Fund (MUI), one of the best-performing muni CEFs over the last decade. Just look at how it’s done compared to MUB:

MUI Quietly Delivers Big Profits

This outperformance isn’t rewarded with a premium price; MUI trades at a 13% discount to NAV, which is double its 6.5% average markdown over the last decade. That also means the fund’s 4.1% dividend yield is extremely sustainable, since MUI’s management only needs to get a 3.6% income stream in the muni-bond markets to keep the payouts coming.

Then there’s the diversification. Here’s a chart from BlackRock breaking down the fund’s exposure by state—you can see that it focuses on the biggest states with the healthiest budgets:

A Diverse Fund

Plus, MUI is exposed to the northeast, southwest and every area in between—the fund actually holds municipal bonds from 44 states in total!

If you’re looking for a sleep-well-at-night, high-yielding, tax-free income stream, MUI is a great option.

Muni CEF Pick #3: Crushing the Index for Over 2 Decades

The last fund I want to show you is another BlackRock fund, the BlackRock MuniHoldings Fund II (MUH), which is one of the best-performing muni CEFs of all time. Over the last decade, it’s returned 7.5% annualized. Just look at what it’s done compared to MUB!

Another Long-Term Winner

What’s the secret to this fund’s success?

Two things. First, it invests in municipal bonds that are income tax free but not alternative minimum tax (AMT) free. That limits the appeal of these bonds to some investors, making the market for them less efficient. That, in turn, lets the geniuses at BlackRock easily spot bargains that will boost your returns (as management has for the last decade).

Another big reason for MUH’s healthy gains is the fund’s use of derivatives. By using a mixture of futures, options and interest-rate swaps, MUH can boost your total return by actively playing the bond market as it relates to the Federal Reserve’s changing monetary policy. This approach has worked well over the fund’s history, going back to the 1990s.

Finally, MUH trades at a 7.6% discount to NAV, far higher than the 3.4% markdown it’s averaged over the last decade. That discount has gotten unusually big in the last year—but it’s also starting to recover:

Sale Ending Soon

That makes a good time to consider moving into MUH. You’ll collect a nice 5.8% income stream while you wait for its discount to close.

Beyond Munis: 4 Buys for 7.8% CASH Payouts and 20%+ Upside

As I mentioned earlier, a CEF’s discount to NAV is an incredibly reliable indicator that it’s poised to deliver serious price upside.

That’s true of the 3 funds I just showed you … and it goes double for the 4 other CEFs I want to show you now. Each one trades at an even more absurd discount to NAV than our 3 muni funds … so these 4 unsung funds are spring-loaded to catapult us to price gains of 20%+ in the next 12 months.

When you combine these 4 buys with our muni-fund CEFs, you get an “instant” portfolio that lets you dip a toe in some of the best income investments in the world: munis, high-yield REITs, preferred stocks, corporate bonds and dividend stocks, to name a few.

PLUS, these 4 amazing income plays also pay dividends 3 or 4 TIMES higher than your typical stock—up to 8.0%! So you’re getting paid very handsomely while you wait for these funds’ discount windows to slam shut.

Here’s a quick look at each of them:

• The real estate mogul: This fund has DOUBLED the market’s return since inception—including during the financial crisis—by investing in real estate, the very thing that caused the meltdown in the first place! It pays you 7.8% in cash today, and its silly discount points to a shockingly big price rise ahead.
• The bond play with a fat 7.2% payout: This one trades at a totally unusual 14.9% discount to NAV. And it has something I love in a CEF: management with skin in the game. The team at the top includes a Wall Street vet with $250,000 of his own cash in the fund, so you can bet he’ll be working for you.
• The perfect buy for rising rates: This one holds floating-rate loans, whose rates adjust higher with interest rates. If you want to hedge your portfolio against the Fed’s next move (and collect 6.4% in cash while you do) this fund is for you.
• The preferred-stock player: Preferred stocks trade around a par value, like a bond, but pay outsized dividends, fueling this fund’s amazing 6.9% payout. Better yet, preferreds have gone on sale in the last few months, driving this fund to a rare discount—and giving us our in.

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.

Source: Contrarian Outlook 

In the IPO world, new biotech or consumer tech stocks get all the attention. The financial news keeps close track of how much a new tech IPO climbs the first few days after a public market launch. This makes great news bites, but it is hard for individual investors to participate. IPOs in the high-yield stock world get little or no attention. I make a point of finding and tracking new dividend stocks, and then recommending them to my subscribers when my analysis confirms attractive total return potential. One such stock has returned 50% since I made the first recommendation last Fall. The 2018 second quarter earnings show that the positive run still has plenty of room to grow.

With a transformative acquisition in 2016, Arbor Realty Trust Inc. (NYSE: ABR) became a “new” company as far as investment potential. In July 2016 the REIT acquired privately held Arbor Commercial Mortgage, LLC. The acquisition diversified the company’s revenue stream, primarily by bringing in a larger commercial mortgage servicing portfolio. When well managed a portfolio of mortgage servicing assets can generate tremendous returns.

One of my long time recommendations, New Residential Investments (NYSE: NRZ) has generated a 100% plus total return over the last four years by focusing on residential mortgage servicing rights.

After the transaction, Arbor management noted that the move “Transitioned the REIT from a mono line dependent entity into a fully integrated franchise with a significant agency origination business with high barriers to entry providing a natural limitation on competition.”

Related: Is This the Best High-Yield Stock?

The investment returns from ABR since mid-2016 have been spectacular. The quarterly dividend has grown 56% from $0.16 per share to the current $0.25 per share. The share price has appreciated by a comparable 60%. I first recommended this REIT to my Dividend Hunter subscribers in October 2017, and we caught most of the gains with the stock generating a 51% total return since that time.

However, don’t worry that if you don’t yet own ABR you have missed the party. The recent 2018 second quarter earnings report shows that the Arbor growth story will continue. You may not earn 50% per year, but total annual returns in the 20% range are likely. Here are the catalysts for continued above average returns.

The current yield is 8.5%. This is above the peer group, which means for the yield to be in line with those peers, the share price must move higher.
The ABR market cap just surpassed $1 billion. That is a level which will draw more institutional investor interests.
The company grew its balance sheet by 18% in the first half of 2018, well ahead of expectations. This is a company that is generating strong growth across all its business lines.
A recent litigation win means the company will likely pay a bonus dividend near the end of 2018.
Stock stories like Arbor Realty are not found in the mainstream financial news outlets. You also can’t find them using a stock screener. To find these types of opportunities for my subscribers I follow hundreds of stocks that the mainstream ignores.

Source: Investors Alley

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:

3. 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.

Business Development Companies (BDCs) are the Jekyll and Hyde of the high yield stock universe. My analysis shows most of these stocks as not safe places to hunt for dividends. However, there are a handful that are attractive, high yield income stocks. The Small Business Credit Availability Act passed earlier this year loosened the leverage restrictions for BDCs. These new rules are likely to make the ugly even more unpleasant to own and the attractive BDCs even better income producing investments.

Business Development Companies operate under special rules that allow them to not pay corporate income taxes. They are required to provide investment capital—loans and equity investments—to small and midsized corporations. To retain its pass through tax status, a BDC must pay out at least 90% of net interest income as dividends to shareholders.

The problem with the BDC business model is that these companies make risky loans to businesses that cannot get financial through regular banking channels. At the same time, the companies must pay the majority of profits out as dividends. This means a BDC cannot set up reserves against bad loans. With the risk level of BDC loan customers, loan losses are unavoidable. Poorly managed BDCs experience a steady NAV erosion and are forced to slash dividends. Well managed BDCs have strategies to offset the NAV erosion using portfolio growth and equity investments in client companies.

A further restriction on the BDC business model limited debt to one times equity. That means a BDC with $500 million of equity could borrow another $500 million to own a $1 billion investment portfolio. Using leverage boost the net income per share of equity investors, i.e. shareholders. The Small Business Credit Availability Act allows a BDC to increase debt up to two times equity, effectively doubling the leverage available to these companies. A Board of Directors approval or vote by the majority of shareholders is required for a BDC to increase its debt limit. A one-year cooling off period is required for companies receiving board approval, but BDCs that seek approval via a shareholder vote will be able to make changes one day after a majority vote.

As with most things BDC associated, the new leverage rules will likely result in bad BDCs losing investor money even faster and the good management teams will be able to invest the added debt to produce dividend growth. Here are three of the better managed companies in the sector.

Goldman Sachs BDC, Inc. (NYSE: GSBD) is a newer BDC managed by the famed investment bank. The company launched with a March 2015 IPO. The dividend has been level at $0.45 per share since the IPO.

NAV per share has eroded over the last three years from $19.46 down to $18.10. For its annual meeting in June, the GSBD Board filed a proxy for shareholders to vote on a reduced management fee structure and to increase the company’s allowed amount of leverage. These should allow future growth of the portfolio and dividend.

The shares currently yield 8.4%.

TPG Specialty Lending (NYSE: TSLX) has been a publicly traded since March 2014. The BDC is managed by private asset manager TGP, which has $80 billion under management. The management team has demonstrated excellent discipline in its approach to making portfolio loans. As a result, the company has shown slow but steady NAV appreciation.

TSLX has not yet announced if or when it will take advantage of the new leverage limits. This BDC is unique in that it pays a base quarterly dividend of $0.39 per share and then each quarter if earnings justify it, an add-on dividend is also declared. A special dividend has been paid for each of the last five quarters, totaling $0.28 per share.

On the base dividend rate TSLX yields 8.1%.

Hercules Capital (Nasdaq: HTGC) is an internally managed BDC exclusively focused on making loans and equity investments in the venture capital space.

The company’s loans enabled some of America’s most promising, emerging growth, pre-IPO and M&A companies. It’s equity investments in these emerging growth companies have given Hercules an extra source of profits. For example, eight portfolio companies have completed or announced an IPO or M&A liquidity event so far in 2018.

HTGC has been a publicly traded BDC since 2005. The dividend has been steady to growing since 2018. The shares currently yield 9.1%.

One of the most reliable income-producing sectors has been hit hard over the past year, handing you a terrific shot at outsized dividend yields running all the way up to 10%.

In a moment, I’ll show you two funds that let you grab these huge income streams at a big discount—and one that looks like a strong buy but is way overpriced and headed for a fall. You’ll want to keep that one as far away from your portfolio as possible.

The sector all three of these picks come from is utilities—one of only two sectors of the S&P 500 that’s down over the past year (the other being consumer staples), with a 2.6% overall decline.

The fact that utilities and consumer staples are down tells us one thing: the market has a bigger appetite for riskier stocks on confidence that the economy is expanding, with GDP growth slated to reach 3% by the end of 2018.

But that confidence has resulted in some folks shifting cash away from so-called “boring” utilities—in effect throwing out the baby with the bathwater, as the old saying goes.

And for dividend investors like us, that adds up to a nice buying opportunity.

Because as you can see in the chart below, all four of America’s biggest utilities are having no trouble making their dividend payouts (the exception, Southern Company [SO], saw its payout ratio spike as it paid for an acquisition, but that’s quickly returning to normal):

Stable Dividends? Check.

And if you want more proof that these dividends are ironclad, take a look at the history:

Dividend Growth Is in Their DNA

That’s why utility stocks are often called “orphan and widow” stocks: they’re reliable payers you can buy, forget about and enjoy your dividend checks.

How to Grab Up to 10% Cash Payouts From Utilities Now

Unfortunately, this is where most people get hung up. Because despite their stable cash flows and rising dividends, utility stocks are far from easy to pick. They’re largely regional and, as a result, are exposed to demographic flows and local economic developments that are tough to track.

That’s why the benchmark ETF, the Utilities Select Sector SPDR ETF (XLU), is so popular.

With a 3.4% dividend yield, XLU’s payouts are nearly double those of the S&P 500. But the great news is that we can do even better, doubling XLU’s payouts again by digging into a high-yield corner of the market few people even know exists: closed-end funds (CEFs).

Right now, there are 9 utility-focused CEFs with dividends ranging from 6.4% to 10%, making them all intriguing options. But there are 2 in particular that should be high on your list.

Utility CEF Pick No. 1: This 8.6% Markdown Won’t Last Long

The first CEF is the Reaves Utility Income Fund (UTG), which is trading at an 8.6% discount to NAV after trading at a premium price for most of 2017. UTG gives investors a generous 7.3% income stream, or more than twice the payout of XLU.

That’s not the only thing UTG has going for it. This fund has crushed the benchmark ETF over the last decade, nearly doubling its total return while also giving investors a much higher payout. Bigger returns and a bigger income stream aren’t easy to find—but UTG offers investors both:

An Index Crusher

CEFs with this kind of outperformance are usually priced at a premium to NAV, and given that this one was priced at a premium itself just a few months ago, the time to make a move is now, before its current markdown bleeds away.

CEF Pick No. 2: More Risk, More Reward

In addition to UTG, there’s another utility CEF that is worth considering—although I’ll tell you upfront that there is more risk involved.

I’m talking about the Duff & Phelps Global Utility Income Fund (DPG), which is trading at a 10.6% discount to NAV.

I’m going to be honest: DPG doesn’t have a great history. It’s underperformed the index since its IPO in 2011, although a lot of that underperformance has shown up since 2014:

This Chart Is Ready to Flip

Why the poorer performance?

Well, remember back in 2014, when oil prices crashed? This was great for American utilities, which are net consumers of energy. But DPG is a global utility fund, and a lot of energy providers outside of America are also energy producers, so they’re much more sensitive to oil prices than their US cousins.

But oil is soaring in 2018. We’ve already seen West Texas Intermediate (WTI) prices jump 12.8% this year, and the strong economy probably means prices will go even higher. That could be a boon for DPG, as it benefits from higher consumption and higher oil prices.

Plus, DPG’s luxurious 10% income stream is nearly triple that of the index fund, so you’ll be well compensated by that hefty dividend while you wait for the fund’s discount to close and its NAV to rise.

Now we have to talk about another utility fund that has outperformed the market but isn’t the screaming buy it appears to be. Far from it.

An Overpriced Utility CEF to Avoid

The DNP Select Income Fund (DNP) is another utility CEF that has beaten XLU over the long term, as you can see here:

Another Outperformer

While DNP’s outperformance deserves to be rewarded, the market is going way too far, currently rewarding it with a 20% premium to NAV. Meanwhile, UTG—the first utility fund I told you about—trades at an 8.6% discount! Not only that, but UTG has beaten DNP for a long time, indicating that it is the superior fund.

The bottom line? DNP’s huge premium—and the downside it implies—alone make this CEF a fund to avoid right now.

Why Wall Street Ignores CEFs

At this point you may be wondering why you’ve never the media (and likely your own financial advisor) talk about the big yields and deep discounts in the CEF space, like the two I’ve showed you today.

The answer? They’d rather just talk about what’s popular—big-cap stocks or overbought ETFs. It saves them a lot of research, and they get paid the same amount anyway!

That’s too bad, because the totally inefficient CEF market is serving up some incredible deals on funds paying hugedividends right now, such as …

My No. 1 CEF Buy Now: 810% Gains and 8.4% Dividends in 1 Click!

My favorite CEF to buy right now has crushed the market since inception, with a monstrous 810% return!

1 Chart That Demolishes Conventional “Wisdom”

This is incredible—the kind of gain you might expect from, say, a small-cap tech stock, not a conservative fund like this one.

To give you a little more context, my No. 1 pick is a pharma fund run by some of the smartest minds in the business—researchers and doctors with “boots on the ground” experience zeroing in on the next billion-dollar-plus blockbuster drug.

That alone is reason enough to put this one on your short list.

There’s more, though. Because this dynamic fund also throws off an incredible 8.4% dividend, too!

You’d think a gain and a payout like that would at least get a few folks in the mainstream media talking.

No way. Not yet, anyway.

Why? For one, this low-key CEF is tiny, with just a $391-million market cap, so it gets even less attention than your typical CEF does.

Yet as I write, this fund trades at a 4% discount to NAV. That may not sound like much, but it’s traded at fat premiums MANY times in the past 5 years.

When it does so again, we’ll be locked in for fast 20%+ upside from here, on top of that massive dividend!

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. 

In my focus area of high yield stocks, I am regularly reminded how committed to losing money are many high-yield stock investors. Any whiff of bad news has them running for the exits, which drives down share price, which causes more fear based selling, which further drives down the share price. You get the picture. Investors who buy high yield stocks are often new to owning stocks, or less well informed on how stock prices fluctuate. To avoid being a money-losing, fear-based seller of dividend stocks, an investor needs to understand the difference between real and fake news that moves stock prices.

Real news about publicly traded companies is primarily quarterly earnings results and the associated management comments about business operations. Press releases directly from the individual companies count as real news. You may notice that these items come out just once to a few times per calendar quarter for most stocks. This is the information on which buy and sell decisions should be made.

Related: Separating Real News from Fake News in the Stock Market

However, the financial news media is hungry for items to fill websites and financial news networks’ broadcast time. The information from these news outlets come from Wall Street analysts and financial writers who share their opinions and try to predict the future. They have no deeper insight that what an investor can get from the information released directly by the companies.

Predicting future results are really just estimates or guesses. I refer to these forecasts as “fake news” because they do not add any real information to my knowledge about individual companies. When a “fake news” item results in a steep share price drop, I review the real news I know about a company and often recommend using the price decline as a buying opportunity. Here are two stocks that recently were affected this way.

Pattern Energy Group (Nasdaq: PEGI) recently experienced a 12.5% decline when the province of Ontario announced it was cancelling over 750 renewable energy contracts. While Pattern Energy was not singled out, the company has a significant presence with several projects under development in Ontario.

A few days after the big drop, a follow up report noted that none of Pattern Energy’s projects would be affected. However, even though the original cause of the decline has been proven to not affect the company, less than half of the steep drop has been recaptured.

This makes PEGI an attractive purchase now with its stable and growing dividend and 9.6% yield.

Over the course of just one week, the share price of Uniti Group (Nasdaq: UNIT) declined by 20%. The drop was almost entirely due to a Wall Street analyst putting a sell recommendation on the stock with a $15 price target.

The real facts are that UNIT at $17.40 per share is the same company with the same prospects as it was when the share price was $4 higher. The big dividend is not at risk, and this is a company that is growing and diversifying its business operations. UNIT now yields almost 14%. It is likely that the Q2 earnings release in early August will give a boost to the share price.

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.

It’s a question I get from investors all the time: “Should I take my dividends in cash or reinvest them through a dividend reinvestment plan (DRIP)?”

My answer: unless you want your cash sitting in your account earning zero, your best bet is to reinvest any dividend money you don’t need to pay your bills.

But we don’t want to practice “buy and hope” investing, either, whether we do it through obsolete DRIPs or the old-fashioned way.

When I say “buy and hope,” I mean putting your cash into household names like the so-called Dividend Aristocrats and “hoping” for higher stock prices when you cash out in retirement.

You’ve probably heard of the 53 stocks on the Aristocrats list, which have raised their payouts for at least 25 straight years. Trouble is, despite their lofty name, these companies hand us a pathetic current dividend of 2.2%, on average.

And many pay a lot less:

5 Dividend Paupers

So if you invest mainly in these stocks (as many people do), you won’t have to worry about reinvesting your dividends. You’ll need every penny of dividend income just to keep the lights on!

That’s because even with a $1-million portfolio, you’re only getting $22,000 in dividend income a year here, on average. That’s not far above poverty-level income for a two-person household.

Pretty sad after a lifetime of saving and investing.

Luckily, there’s a way we can rake in way more dividend cash. I’m talking a steady $75,000 a year in income on a million bucks. And if you’re not a millionaire, don’t worry: a $550k nest egg will bring in $41,200 annually, enough for many folks to retire on.

That’s 59% more income than our million-dollar Aristocrat portfolio, from a nest egg that’s a little over half the size!

How to Bank an Extra $41,200 in Cash Every Year

I know what you’re thinking: “Brett, that amounts to a 7.5% yield. There’s no way a payout like that can be safe.”

You can be forgiven for thinking that, because you hear it everywhere (heck, even my financially savvy personal trainer didn’t believe payouts like this were possible).

But the truth is, there are plenty of safe payers throwing off at least that much, like the 19 stocks and funds I recommend in my Contrarian Income Report service (which I’ll show you when you click here).

Right now, these 19 sturdy investments yield 7.5%, on average. And every month I personally run each one through a rigorous dividend-safety check, starting with 3 things that are absolutely critical:

1. Rising free cash flow (FCF)—unlike net income, which is an accounting measure that can be manipulated, FCF is a snapshot of how much cash a company is making once it’s paid the cost of maintaining and growing its business;
2. A payout ratio of 50% or less. The payout ratio is the percentage of FCF that went out the door as dividends in the last 12 months. Real estate investment trusts (REITs) use a different measure called funds from operations (FFO) and can handle higher payout ratios, sometimes up to 90%;
3. A healthy balance sheet, with ample cash on hand and reasonable debt.

Making DRIPs Obsolete

The best part is, these 19 investments are perfect for dividend reinvestment because each one gives us a dead-giveaway signal of when it’s time to buy, sit tight—or sell and look elsewhere for upside to go with our 7.5%+ income stream.

That makes DRIPs obsolete!

Because why would we mindlessly roll our dividend cash into a particular stock every quarter when, at a glance, we can pinpoint exactly where to strike for the biggest upside?

To show you what I mean, consider closed-end funds (CEFs), an overlooked corner of the market where dividends of 7.5% and up are common. We hold 11 CEFs in our Contrarian Income Report portfolio, mainly larger issues with market caps of $1 billion or higher.

(By the way, my colleague Michael Foster focuses 100% on CEFs in his CEF Insider service, where he keys in on funds with sub-$1-billion market caps trading at ridiculous discounts due to their obscurity. That sets you up for fast 20%+ upside and dividends up to 9.4%. You can check out a recent interview I did with Michael here.)

We don’t have to get into the weeds, but CEFs give off a crystal-clear signal that a big price rise is coming. You’ll find it in the discount to NAV, which is the percentage by which the fund’s market price trails the market value of all the assets in its portfolio.

This number is easy to spot and available on pretty well any fund screener.

This makes our plan simple: wait for the discount to sink below its normal level and make your move. Then keep rolling your dividend cash into that fund until its discount reverts to “normal.”

That’s exactly what we did with the Nuveen NASDAQ 100 Dynamic Overwrite Fund (QQQX) back in January 2017—and the results were breathtaking.

How We Bagged a 42% Total Return (With a 7.5% Yield) in 15 Months

QQQX is run by portfolio manager Keith Hembre, who cherry picks the best stocks on the NASDAQ, juices their high yields with a safe options strategy, then dishes distributions out to shareholders.

It’s hard to imagine now, after the huge run tech stocks have put in over the past couple years, but back in January 2017, QQQX was trading at a 6% discount to NAV and paid a 7.5% dividend.

That triggered our initial move into the fund. And over the next 15 months, we bagged two dividend increases and watched as QQQX’s discount swung to a massive premium—so much so that by the end of that period, the herd was ready to ante up $1.13 for every buck of assets in QQQX’s portfolio!

Discount Window Slams Shut…

That huge swing from a discount to a premium catapulted us to a fat 42% gain (including dividends). But the fund’s outrageous premium meant its upside was pretty well maxed out by the time we took our money off the table on April 6, 2018.

… and Delivers a Fast 42% Gain

And what’s happened since?

QQQX has moved up slightly—a 1% gain. But that’s way behind the market, which has cruised to a 7.5% rise.

Premium Gives Us the Perfect Exit

Forget QQQX: Grab These 8% Monthly Dividends Instead

Luckily, the herd has cooled a bit on QQQX, but it still trades at a 5% premium to NAV. And why the heck would we overpay when the ridiculously inefficient CEF market is throwing us bargain after bargain as I write this?

And there’s one more thing I have to tell you: many of these cheap CEFs pay dividends monthly instead of quarterly.

So if you hold them in your retirement portfolio, their massive dividend payouts will roll in on exactly the same schedule as your monthly bills!

Convenience isn’t the only reason to love monthly payers, though. Because they also let you reinvest your payouts faster, amplifying your gains (and income stream) as you do.

I’m talking about an automatic “set-it-and-forget-it” CASH machine here!

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