These Huge Dividends (up to 7.4%) Are Perfect for the Next 6 Months

The trade-war panic is in full retreat—and it’s left us three ridiculously cheap funds set to soar even higher than the market in the coming months.

Best of all, we’ll bag some very nice dividends from this trio: I’m talking outsized yields up to 7.4%!

Before I show them to you, let’s talk about why the market looks set to head higher.

Right now, the SPDR S&P 500 ETF (SPY) is up 18.3% for 2019. This sounds too good to last, but keep in mind that this jump started near the depths of the late 2018 correction—a low level.

That makes the year-to-date number misleading; a longer-term view shows signs of consistent and slow recovery from 2018’s major volatility:

A Steadying Market

There are a lot of reasons for this, but the two most important ones are good signs for stocks.

For one, US GDP growth is strong, up 3.1% in the first quarter, and second-quarter growth is forecast at a still-robust 1.9%, according to the Federal Reserve. That means the recession fears that were priced into stocks in 2018 were wrong—and stocks still need to rise to fully price in this current growth clip.

Speaking of the Fed, the market now expects the central bank to cut interest rates, and the Fed itself has said as much. Why? Because even with strong growth, inflation is stubbornly low, so there’s no reason to keep raising rates, as the Fed has already done over the last five years.

So if America’s economy is growing and interest rates are about to fall again, we should expect American stocks to benefit the most. But which will be the biggest winners?

Instead of picking them one by one, let’s look at three funds that not only choose stocks well, thanks to smart strategies, but also pay out above-average dividends to investors from the capital each fund earns.

Dividend Fund #1: Playing 2 Disrespected Sectors for Big Gains

The first fund playing this economic growth right is Source Capital (SOR), which has put a quarter of its assets in companies like Broadcom (AVGO)United Technologies (UTX) and American International Group (AIG)—three stocks that alone account for 10% of SOR’s assets. Those holdings are up 24.5% since the start of the year, but we’ve only seen tech and financials begin to recover from their 2018 weakness—setting us up for more gains ahead.

Monster Gains for Source’s Wise Picks

More importantly, SOR trades cheap, which means you get these stocks at a discount. That’s because SOR is a closed-end fund (CEF), a type of fund that often trades at market prices below their net asset value (or NAV), another name for the liquidation value of a CEF’s portfolio.

And right now, SOR’s market price is 13.7% lower than its liquidation value, so you’re getting these stocks cheaper than if you got them through an index fund like the Invesco QQQ Trust (QQQ), or if you bought them one by one.

Dividend Fund #2: A 6% Dividend From a CEF All-Star Team

There is a downside: SOR’s dividend yield is just 2.8%, which is low for a tech-heavy CEF. If you want more income and top-performing tech stocks, the BlackRock Science and Technology Trust (BST) might be for you. It yields 5.7%.

I’ve written about BST before—including last Thursday, when I named it my favorite of the tech-focused CEFs. Just look at its total return versus QQQ:

Outperforming the Market—With Income

BST has a dividend yield over five times higher than that of QQQ and it’s still able to outperform the index fund by a huge and growing margin.

How does it do it?

The answer may surprise you: management. BST’s managers have consistently picked winning stocks that outrun the well-known stalwarts of the tech world.

What this means is that, beyond the FAANG stocks you’d expect (those account for 25% of BST’s portfolio), the fund’s managers have shrewdly picked and timed purchases in breakout names like top holdings Alibaba (BABA)Salesforce.com (CRM) and Tencent (0070).

That strong record usually comes at a price, though; thanks to its market-beating returns, BST has attracted a high valuation in the past and recently traded at a 9% premium to NAV. But today it’s trading at a rare 1.5% discount, which means the premium could very easily return in the coming months.

Dividend Fund #3: Greater Income, Greater Safety

If 5.7% still isn’t enough of a dividend yield, I have just the fund for you: the Eaton Vance Tax-Advantaged Dividend Income Fund (EVT), which trades at its NAV and pays a huge 7.4% dividend yield.

EVT has given investors a monster 29% total return over the last year, versus just 19% for the S&P 500, making it yet another market outperformer.

That’s not surprising; EVT’s biggest holdings are popular S&P 500 names like JPMorgan Chase (JPM) and Johnson & Johnson (JNJ). This fund is very balanced, with about 10% or less of its assets in sectors such as tech, industrials, healthcare, energy, utilities and real estate.

Its biggest exposure is to the financial sector, which is up 15.4% in 2019 and set to keep going higher thanks to the booming economy.

20 More Rock-Solid Dividends—Up to 10.5%—Waiting for You Here

Steering you toward safe—and growing—7%+ payouts is exactly what I do in my CEF Insider service

And right now I’m ready to share my very latest high-yield picks with you: I’m talking about a fully stocked portfolio of 20 CEFs yielding 7.3% on average (with two throwing off monster payouts of 10% and up!).

This portfolio is the beating heart of CEF Insider—and you should NOT miss this special invitation: you get to “kick the tires” on all 18 funds in my portfolio with no obligation whatsoever!

The buys you’ll discover are poised to hand you 7% to 15% price upside in the next 12 months, along with their outsized dividends. That puts the total returns on many of these picks 20% and even more, thanks to the incredible discounts they’re trading at now.

Good luck finding a gain-and-income punch like that in your typical S&P 500 stock!

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

Three All-American High-Yield Dividend Stocks for Independence Day

For me, there are few things more patriotic than earning fat dividend checks from U.S. companies. I like dividends more than apple pie.

For some fun today, I want to highlight a few attractive, dividend paying stocks with at least a plausible tie to an All-American theme.

I hope you have some fun plans for the 4th of July. It is one of my favorite holidays. I think it comes from my time in the U.S. Air Force and because it comes right in the middle of summer. This year, with the holiday falling on a Thursday, I am sure if your holding down a job, there will be temptation to turn this into a four-day holiday weekend. That’s my plan!

Let’s get to my Independence Day themed list of stocks going.

What could be more American than the Ford F-150 pickup truck. As Ford Motor Company (F) is proud to remind us in their ads, the F-150 has been the top selling vehicle for 42 consecutive years.

I find it an interesting fact, considering how much the investing public is focused on electric cars. Unfortunately for electric car manufacturers, two-thirds of vehicle sales are trucks and SUVs, with the percentage of cars declining each year.

According to CNBC, Ford is forecast to be selling 90% trucks and SUVs by 2022. Ford shares are a solid dividend investment.

The current yield is 5.9% and the dividend has been increased for seven straight years.

One thing Americans like to do when they drive their F-150’s is to go shopping. While the financial media may be convinced that e-commerce is taking over America, the U.S. Census Bureau reported than in the 2019 first quarter e-commerce sales accounted for 10.2% of total sales. My math calculation from that says that almost 90% of retail still occurs in brick-and-mortar stores and shopping centers.

Tanger Factory Outlet Centers (SKT) is the only shopping center REIT that is a pure play outlet mall investment. The Tanger share price has been hit hard over the last three years on the e-commerce will take over the world theme. I think the numbers show that belief is not backed by data.

Tanger has increased its dividend for 26 consecutive years.

The current low share price means SKT yields 8.75%. This is a great turnaround story.

Another theme tied to the 4th of July, or at least to summer, is air conditioning. I am sure you know how your power bill goes up as you keep your home cool this time of year.

NextEra Energy (NEE) is the world’s largest utility company one of the best dividend growth utility stocks. NextEra primarily provides power in Florida, operating as Florida Power & Light Company.

The NEE dividend has been increased for 24 straight yields. Dividend growth has been at a 9.5% compound growth rate for the last decade and increased at 13% compounded for the last three years. Current yield is 2.4%.

The dividend growth rate is the force to power the stock higher.

Pay Your Bills for LIFE with These Dividend Stocks

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

Click here for complete details to start your plan today.

Source: Investors Alley

5 Dividend Stocks That’ll Keep You From Drowning in Retirement

Your 2% bonds are going to make you broke. You need to buy these safe, higher paying dividends instead.

We’ll get to these “real yields” (up to 9.3%!) in a moment. First, let’s recap. Treasury yields just took their biggest bath in weeks, sending the 10-year T-note to 2%. Less than a year ago, the 10-year was flirting with (a not exactly nosebleed) 3%.

And now that Fed chair Jay Powell has fallen in love with the doves (whether by choice or by force), he’s going to keep rates low for a long time. Which means bonds will have no place in a retirement portfolio geared towards income.

It wasn’t always this way. Decades ago, bonds rightfully earned their reputation as a source of not just safe, but substantial income that could actually support a high-quality retirement.

But Times, They’ve Been A-Changin’

But for nearly a decade, investors subject to traditional wisdom have been put in peril. They’ve been told that bonds are safe, that they’re “wealth preservers.” However, they now yield so little that their income is almost completely gobbled up by inflation, and their paltry coupons don’t even support basic necessities.

Put another way: If you rely on plain-Jane bonds in retirement, you’ll be underwater paying for even the most bare-bones lifestyle.

The table below shows the monthly income from a $1 million nest egg 100% invested in Treasuries, as well as the average Social Security paycheck, stacked up against a list of basic retirement costs compiled by NerdWallet.

Bond investors come up $380 shy each and every month under this low-frills budget. And even if they didn’t spend a penny in “entertainment,” they’d still be broke.

This “new normal” requires a different set of income strategies. You need better yields and substantial payout growth to make sure you’re ahead of the inflation curve.

Of course, you’re not going to get those from Uncle Sam at 2%. You will, however, find them in this five-pack of bigger paying bonds.

BlackRock Core Bond Trust (BHK)
Type: Multi-Sector
Distribution Yield: 5.6%

The BlackRock Core Bond Trust (BHK) closed-end fund (CEF) lives up to its name, providing a core collection of primarily investment-grade bonds. Investment-grade corporates make up about a third of the portfolio, with double-digit holdings in U.S. government bonds, junk debt and agency mortgages. It also holds developed- and emerging-market debt, securitized products, bank loans and more.

About three-quarters of the portfolio is rated BBB or above, so quality is no issue. And you even have roughly 15% exposure to international debt, which gives you a splash of geographic diversity.

A core ETF such as the iShares Core Aggregate Bond ETF (AGG) will offer typically a little better overall credit quality, but less than half the yield. That’s the power of closed-end funds, which can use leverage and wily active management to juice returns and distributions.

A 7% discount to the fund’s net asset value (NAV) would seem to cinch the deal. After all, who wouldn’t want broad bond-market exposure with 2x the yield for 93 cents on the dollar?

The problem is that there are better options. BHK has delivered 7.1% in annual total returns since inception, versus a 7.6% category average. Plus it has underperformed in most other time periods, too.

Luckily, BlackRock has more to offer, as I’ll show you in a minute.

Calamos Convertible & High Income Fund (CHY)
Type: Multi-Sector
Distribution Yield: 9.3%

Calamos offers another type of somewhat-blended fixed income, though it’s far from the “core” allocation you’d get via BHK.

The Calamos Convertible & High Income Fund (CHY) invests in a portfolio of convertible securities and other high-yield fixed income instruments. Convertible securities are the lion’s share at 57%, followed by corporate bonds at 32%.

Convertible bonds get very little press. They’re like traditional bonds in that they make regular, fixed coupon payments. But as the name implies, they can be converted–into common stock. So, you can enjoy the income of bonds with the potential upside of equities.

While convertibles’ yields are typically less than regular bonds, CHY’s other holdings, as well as a hefty amount of leverage, help fuel a massive distribution of more than 9% despite a slight reduction in the payout late last year. Its 7.7% annualized total return since inception is in line with the category average.

A 3% discount to NAV is a bargain considering CHY has traded at a premium on average over the past year.

Convertibles Are Cruising in 2019

BlackRock Taxable Municipal Bond Trust (BBN)
Type: Taxable Municipal
Distribution Yield: 6.1%

It’s hard to read “taxable municipal bond” without doing a double-take. Isn’t the whole appeal of a municipal bond the fact that you get to pull a fast one on the IRS?

Sure, tax-free munis can offer smaller yields thanks to that tax benefit. But what happens when you collect that income in a tax-advantaged account like an IRA?

That’s right: You lose municipal bonds’ primary perk.

Enter the BlackRock Taxable Municipal Bond Trust (BBN), which invests at least 80% of its assets in taxable munis, including Build America Bonds. The fund can, if necessary, invest in other assets, from Treasuries to even tax-exempt bonds, but it mostly stays faithful to its charge.

There’s plenty to like here. BBN is able to juice a 6.1% yield its taxable municipal bonds, which it has converted into a 9.4% average annual total return since inception. That’s better than the category mark by 50 basis points. And you can purchase that outperformance at a tidy little discount of about 4% to NAV right now.

That makes BBN an unorthodox but nonetheless attractive buy.

High Taxable Muni Yields Get BBN Over the Hump

Cohen & Steers Limited Duration Preferred & Income (LDP)
Type: Preferred
Distribution Yield: 7.6%

I love preferred stocks. These under-covered, under-loved “hybrid” securities fall well off the radar of many investors. But for those in the know, they’re a dependable source of high yield.

Cohen & Steers skims a lesser-traveled area of the preferred world with its Limited Duration Preferred & Income (LDP) closed-end fund, which, as the name suggests, invests in low-duration preferreds. Just like many investors will duck into low-duration bonds to fight off interest-rate risk, they can tap into this fund when they’re worried about rising rates.

Given the Fed’s current disposition, that’s a big strike against it for now. So is a mere 2% discount that sits below its 52-week average discount of about 5%. (In other words, we’re likely to see this fund trading at a bigger bargain down the road.)

But I always make sure to have a plan for every market condition, and that includes an eventual return to rising rates, whenever that might be. Under that condition, LDP and its collection of about 150 holdings–including preferreds from JPMorgan Chase (JPM) and Bank of America (BAC)–will be the right way to play this asset class.

BlackRock Corporate High Yield Fund (HYT)
Type: High Yield
Distribution Yield: 8.1%

Junk debt has looked less like a fixed-income product and more like a hard-charging blue chip in 2019. That has led to stellar returns for the likes of the BlackRock Corporate High Yield Fund (HYT).

BlackRock’s HYT: Don’t Throw This Junk Away!

HYT’s more than 1,100 holdings aren’t exclusively junk debt, of course. While 83% of the fund is dedicated to junk, another 11% of assets are piled into term loans, with a peppering of collateralized loan obligations, preferred stocks and other assets.

This closed-end fund takes chances, too. Only a little more than a third of the fund is in the highest credit-quality level of junk (BB); much more is in B (45%), and another 14% is dedicated to CCC-rated bonds. That’s much farther down the ladder than what you get in typical junk index funds such as iShares iBoxx $ High Yield Corporate Bond ETF (HYG) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK). BlackRock’s managers double down on those risks, too, with a healthy 28% leverage ratio.

The chutzpah is worth it. BlackRock Corporate High Yield has stomped its category return, 8.3%-6.7%, since inception. And anyone who steps into the fund today can buy HYT’s high-performing assets at a 9% discount.

How Retirees Can Collect $3,125 Per Month in Dividends Alone

These CEFs all have one important trait in common: They distribute cash to shareholders not every quarter, but every month.

That’s a boon to retirees who will have to pay all their monthly bills with retirement income.

But how much will you need every month to get by?

The experts at Merrill Lynch say you need a $738,400 nest egg to retire. The talking heads on CNBC and Fox Business will tell you the magic number is $1 million or $1.5 million. Suze Orman collectively dropped our jaws when she said “You need at least $5 million, or $6 million. Really, you might need $10 million.”

$10 million?

They’re right—if you invest in low-yield bonds or the types of so-so-yielding blue-chip stocks that the financial media deems as “safe.” But there’s nothing safe about collecting so little income in retirement that you have to start taking large chunks out of your nest egg, which in turn saps your income potential even more.

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: Investor Place

Sell These 5 Risky Funds Luring Investors Looking for High Yields

I receive a lot of questions concerning the different investments on closed-end funds (CEFs); particularly the category of high yield investment types. A lot of investors see the yields and monthly dividends and decide to jump into CEFs without understanding what they are buying.

You can find several danger signals that will tell when to stay away from particular funds. Today I will discuss one such signal.

A closed-end fund is an actively managed investment portfolio whose shares trade on one of the stock exchanges. The closed part comes about because after an initial IPO a fund’s sponsor does not issue new shares.

The amount of capital in a CEF only changes by the investment results and dividends paid.

These funds cover the gamut of investment types. Tax-free municipal bonds funds are a popular category.

The CEF Connect website shows 83 municipal bond focused CEFs. Taxable income funds cover a wide range of fixed income investment types including convertible bonds, high-yield bonds, preferred stock funds and senior loan funds.

The website shows 144 funds in taxable income category. U.S. Equity has 13 sub-categories including sectors such as MLPs, commodities, real estate and health/biotech. This category includes 134 funds.

Lastly, there are the non-U.S. funds, with global funds and area specific funds. You will find 70 CEFs in this group.

Related: Dump These 3 Popular Income Funds Before They Blow Up Your Portfolio

With this broad mix of investment types and very loose rules governing the category, there are a lot of ways a poorly managed CEF can lead to investor losses.

In this article I cover one danger signal related to the basic nature of a closed-fund. Since a fund’s sponsor won’t redeem shares, and the shares only trade on the stock exchange, it is common for CEF’s to trade at premiums or discounts to their net asset values or NAV.

The NAV is the real value of a share if the fund was liquidated and the proceeds paid out to share owners. If you buy a CEF trading at a discount, you are paying less than the share is currently worth.

Paying a premium means you are paying more than the current real value.

Here are five closed-end funds trading at big premiums to NAV. There is no reason to buy one of these and if you own one, a collapsing premium would cost you money even if the fund is performing satisfactorily.

PIMCO California Municipal Income Fund (PCQ) seeks to provide current income exempt from federal and California income tax.

Since October 2018 the premium on PCQ shares has expanded from under 11% to the current 34.3%. A return to the previous premium would offset five years of the current 4.9% tax free yield.

I guess California based investors really don’t want to pay taxes!

Oxford Lane Capital Corp. (OXLC) is a senior loans fund that seeks to achieve its investment objective of maximizing risk-adjusted total return by investing in debt and equity tranches of CLO vehicles.

Investors are attracted to this fund due to the 15% distribution yield.

OXLC is a CEF that could be the poster child for closed end fund dangers, and the 34.8% premium to NAV is just one of the problems with this CEF.

Stone Harbor Emerging Markets Income Fund (EDF) primary investment objective is to maximize total return, which consists of income on its investments and capital appreciation.

The Fund will normally invest at least 80% of its net assets Emerging Markets Securities.

In regular speak, this is an emerging markets debt securities fund. It owns bonds issued by countries such as Argentina, Indonesia, Russia and Ghana.

The fund launched in 2010 and has produced an average 2.8% annual return on NAV. Not a good reason to justify the 15% distribution yield or 35.4% premium to NAV.

PIMCO Strategic Income Fund (RCS) seeks high current income with capital appreciation through investments in global sovereign debt securities.

Despite the “global” in its stated investment goals, the fund has over half its assets in Fannie Mae mortgage backed securities.

While most CEFs limit themselves to 25% to 30% leverage, this fund is 67% leveraged, doubling the equity with borrowed money.

I see a time bomb when interest rates start to rise. RCS currently trades at a 35.5% premium to NAV.

Gabelli Utility Trust (GUT) invests primarily in foreign and domestic companies involved in providing products, services, or equipment for the generation or distribution of electricity, gas, water, and telecommunications services.

The primary claim to fame is the fund is run by celebrity investment manager Mario J. Gabelli, CFA.

Neither his management, the 6.78% 5-year average annual return nor the 8.6% yield justify this fund’s 37.8% premium to NAV.

Pay Your Bills for LIFE with These Dividend Stocks

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

Click here for complete details to start your plan today.

How to Squeeze a 13.6% Dividend From Gold (No One Does This)

Let’s face it: you hardly ever get decent income from commodity stocks. And when you do, these payouts are usually first to get the axe next time, say, oil nosedives.

And with oil doing this…

Oil Falls—Oil Companies’ Profits to Follow 

… you may worry that it’s about to get harder to squeeze income out of oil companies.

Still, if you’re worried about inflation or the Federal Reserve distorting markets, or if you just want to hedge your stock portfolio, you’ll likely turn to commodities at some point. And there’s no more established inflation hedge than gold.

There’s just one problem: gold doesn’t produce anything.

As Warren Buffett said, you could put all the world’s gold in one big cube and it still wouldn’t produce income for you. That’s usually how it goes—and most gold miners don’t pay dividends because they’re too busy pumping cash into the business to mine more gold.

Fortunately there’s another way to get cash out of gold—and no small amount, either: I’m talking a 13.6% dividend yield.

How? With the GAMCO Global Gold Natural Resources & Income Trust (GGN), an actively managed closed-end fund (CEF) that holds energy and gold stocks, and pivots between them when the time is right.

Current holdings include Barrick Gold (GOLD), Newmont Mining (NEM), Chevron (CVX) and Exxon Mobil (XOM).Plus, as I just mentioned, GGN now yields a whopping 13.6%.

And if you’re worried that GGN’s strategy can’t beat its benchmarks, don’t be. Here’s what the fund has done in 2019:

GGN Tops Gold, Energy—and the Market Itself

Here we see that GGN has easily beaten stocks. Plus it’s also topped the energy sector and physical gold—the latter of which is tracked here by the SPDR Gold Shares (GLD). Both energy and gold are far below stocks in general, due to worries that inflation won’t rise soon, despite the Fed’s hints it may cut rates shortly.

If you’re wondering how a gold/energy fund can crush both gold and energy while also beating the stock market, let me explain.

With its portfolio flexibility, GGN can pivot between the two asset classes and buy what’s undervalued at the time. It can also avoid the worst of a downturn by cutting back on the weaker asset class, whether it’s gold or oil. This is why the supposedly safer energy index fund, the Energy Select Sector SPDR (XLE), fell further than GGN in late 2018—and while XLE still hasn’t recovered, GGN is already in the black:

Flexibility Is GGN’s Strength

What about the dividend?

GGN hasn’t cut distributions since early 2017, when the fund was still picking up the pieces from the 2014 oil crash, which also resulted in a dividend cut for GGN in 2014 (it’s worth noting XLE’s dividends were also cut at the same time, as were those of almost all energy companies). Fortunately, oil has been predictably range-bound since, making it easier for energy-fund managers to maintain their portfolios and payouts:

Oil’s New Normal 

And with GGN’s recent solid showing, it looks like the fund has found the perfect strategy for oil’s new normal, while also dipping into gold markets when necessary. If the Fed follows through with rate cuts to inflate the economy, expect inflation to follow, making GGN’s gold holdings, its strategy and its dividend a decent hedge against a Fed-driven stock market.

Urgent: Grab This Growing 10.7% Dividend Now—While It’s Cheap

If you want to go beyond volatile commodities, you can bulk up your portfolio’s safety and bag a mammoth 10.7% income stream with my top stock-focused CEF pick now.

I’ve made this top-secret CEF my No. 1 pick in stock-focused funds for 2 reasons:

  • It boasts an amazing 10.7% dividend yield.
  • Its cash payout is exploding, up an incredible 150% in the last decade!

How does this fund do it?

It’s run by an investment all-star team cherry-picked from 5 of the sharpest management firms on Wall Street.

Together, this crew invests in a “no-gimmicks” portfolio of value and growth stocks, all of which have deep moats protecting their businesses: names like Visa (V), Microsoft (MSFT), Alphabet (GOOGL) and Abbott Laboratories (ABT).

So how has this all-star team performed?

They’ve dominated, with most of my pick’s monstrous total return coming in cash, thanks to that huge dividend payout:

Crushing the Market in Cash

Finally, this fund trades at an unreal 5% discount as I write this. It’s only a matter of time before that shifts to a massive premium, propelling my pick’s market price higher as it does.

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

4 Video Game Stocks Breaking Out

Source: Shutterstock

The major U.S. averages are holding near fresh record highs, fueled by optimism over the Federal Reserve’s recent dovish turn. Still, markets remain worried about ongoing geopolitical tensions as well as tepid economic data.

The futures market is eagerly pricing in multiple interest rate cuts before the end of the year.

Setting aside the macroeconomic discussion, the underlying health of the American consumer seems solid as we approach the mid-point of the year — which is about when everyone starts focusing on the holiday shopping season and the stocks that are best poised to perform as spending ramps up. No surprise then that a number of video game stocks are perking up on the heels of the recent E3 entertainment expo in Los Angeles. Hype is building for new titles and a coming console hardware refresh.

Here are four stocks to watch:

Video Game Stocks: Electronic Arts (EA)

Video Game Stocks to Buy: Electronic Arts (EA)

Electronic Arts (NASDAQ:EA) shares are breaking up and over their 50-day and 200-day moving averages, setting the stage for a move up and out of a five-month consolidation range. Analysts at Nomura initiated with an overweight rating.

The company will next report results on July 30 after the close. Analysts are looking for earnings of two cents per share on revenues of $722 million. When the company last reported on May 7, earnings of 69 cents per share beat estimates by 10 cents on an 8.7% rise in revenues.

Video Game Stocks to Buy: Take Two Interactive (TTWO)

Take Two Interactive (TTWO)

Take Two Interactive (NASDAQ:TTWO) stock has been surging, on an upward trajectory since bottoming in March. Analysts at the Benchmark Company recently raise their price target to $130 after witnessing a jubilant reaction to its Borderlands 3 demo at the recent E3 show. They are also looking ahead to the next Grand Theft Auto game. The last installment, Grand Theft Auto V, was initially released in 2013.

The company will next report results on Aug. 1 after the close. Analysts are looking for earnings of four cents per share on revenues of $383 million. When the company last reported on May 13, earnings of 50 cents per share missed estimates by 25 cents on an 18.7% rise in revenues.

Video Game Stocks to Buy: Activision (ATVI)

Activision (ATVI)

Analysts at Needham recently sat down with management of Activision (NASDAQ:ATVI), who noted an intent to focus on monetizing core franchises including Call of Duty and sticking to a more frequent and predictable schedule of content releases. Coverage was recently initiated with a neutral rating by analysts at Citigroup.

The company will next report results on Aug. 1 after the close. Analysts are looking for earnings of 26 cents per share on revenues of $1.2 billion. When the company last reported on May 2, earnings of 58 cents per share beat estimates by 33 cents per share on an 8.7% decline in revenues.

Stocks to Buy: Facebook (FB)

Facebook (FB)

While Facebook (NASDAQ:FB) might not be the first name one thinks of when it comes to video games, the company is a major player both through its Oculus VR subsidiary as well as its social media-based games. Facebook as well as competitors are in the midst of the launch of “Gen 2” VR headsets with better tracking and resolution, among other features.

The company will next report results on July 24 after the close. Analysts are looking for earnings of $1.87 per share on revenues of $16.5 billion. When the company last reported on April 24 earnings of $1.89 per share beat estimates by 27 cents on a 26% rise in revenues.

As of this writing, William Roth did not hold a position in any of the aforementioned securities.

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Source: Investor Place

10 Highest Yield Dividend Stocks Going Ex-Div This Week

Stock SymbolEx-Div DatePay DateDiv PayoutYield
DX06/25/197/3/190.238.50%
PVL06/271907/15/19018.13%
ORC06/27/1907/31/190.115.00%
TWO06/28/1907/29/190.412.66%
NRZ06/28/1907/26/190.512.63%
MITT06/27/1907/31/190.512.36%
CHMI06/27/1907/30/190.511.82%
ANH06/27/1907/29/190.111.52%
AGNC06/27/1907/10/190.211.35%
CLNC06/27/1907/10/190.111.29%

Data current as of market close 06/19/19.

Pay Your Bills for LIFE with These Dividend Stocks

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

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Source: Investors Alley

This 6.5% Dividend Loves a Market Meltdown

Today I’m going to give you a strategy—and a strong 6.5%-yielding fund—that both shine when the market throws a tantrum.

And both are way better than what most people do when things get rough: cash in.

Many studies have shown that trying to time the market simply doesn’t work. And even if you did have the superhuman ability to get in and out perfectly, you’d still underperform a buy-and-hold approach. Thanks to compound interest, keeping skin in the game is more important than trying to save your skin.

Options: Your (Surprising) Friend When Markets Roil

Instead of fruitlessly trying to time the market, we’re going to do something that actually works (and takes far less effort!).

We’re going to hedge our stock portfolio with a tool many folks think is dangerous but really isn’t (when used the way we’re going to use it).

I’m talking about options.

Now it is completely true that buying options is akin to gambling. But we’re not going to buy options; we’re going to sell options (call options, specifically). And that changes the game completely.

Best of all, we’re going to sell our call options through a “covered-call fund,” a special type of closed-end fund (CEF)run by professionals who do all the work for us.

(Call options give the holder the right, but not the obligation, to buy a security before a certain date. The buyer pays the seller—in this case our fund—for this right, and that cash stream helps smooth out covered-call funds’ volatility.)

Funds that sell call options against a portfolio of stocks can do better than funds that simply buy and hold in volatile times, while also outperforming in sideways markets. Since stocks have been both volatile and sideways for the last year, this strategy is tailor-made for today.

That brings me to our pick, which both buys high-quality companies at a good price and limits its downside with options.

This Fund Defends Your Nest Egg and Yields 6.5%

Our CEF is one of the largest of its class and one of the most discounted: the BlackRock Enhanced Equity Dividend Trust (BDJ).

This is a 6.5%-yielder trading at an 8.9% discount to NAV, even though its discount was half that just a few months ago. Those two facts are important because they mean BDJ’s managers only need to get a 6% return in the stock market to maintain the fund’s dividend payout, which is easy, since the market averages an 8% annual return over the long haul.

And BDJ has done even better, with a 9.4% annualized return over the last decade.

A Sparkling History

In fact, BDJ’s dividend has remained the same for the last four years—ever since the Fed started raising rates and volatility in stocks increased. That makes sense, considering the fund’s portfolio and strategy.

Large-Cap Safety Through and Through

With a portfolio of large-cap stocks from all sectors and a focus on cash-flow generation, BDJ marries value-investing and covered-call strategies in one easy-to-buy fund.

Plus, those 6.5% dividends are a nice treat.

Yet BDJ isn’t getting much respect—at least not yet. After its discount to NAV widened at the end of 2018, when investors panicked, BDJ is still cheaper than it was a year ago, even though its NAV has pretty much fully recovered:

An Underappreciated Bargain

If volatility comes back, that NAV recovery may slow down a bit, but it should stay on the same trajectory. And if volatility disappears, expect BDJ’s discount to NAV to continue to vanish. That spells out a rare win-win for income investors looking to protect themselves while still getting a reliable income stream.

This 7% Dividend Is Recession-Proof—and Tax-Free, Too

Covered-call funds aren’t the only CEFs that can build some Zen into your portfolio during a market wipeout.

There’s another type of high-yield CEF that does the exact same thing. I’m talking about municipal-bond funds.

I know. Just the name is enough to make your eyes glaze over. But don’t let that put you off, because “muni” funds are perfect for any investor’s portfolio.

That’s because they’re backed by the most reliable consumer there is: the government!

States, counties and cities issue munis to fund badly needed infrastructure, such as roads, bridges, airports and railroads.

That makes them a solid source of income on their own—and you can boost your dividend stream even more if you buy your munis through a CEF, like the one I just recommended in the latest issue of my CEF Insider service.

Check out the steady upward climb my new pick has put on over the past year (in blue below), compared to the motion sickness your typical S&P 500 investor suffered:

Imagine Holding This “Steady Eddie” Fund

And it still has plenty of room to run!

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Is This Often-Overlooked Gold Sector About To Take Off?

Do you remember what happened to the price of gold in 2011? It was a banner year for commodities as the US Dollar was down and demand from China was soaring. But perhaps no commodity had a more memorable run that year than gold.

If you remember, central banks around the world were buying gold by the boatload. And the global financial crisis very much sparked fears of holding fiat currencies. Physical assets became highly sought after. On many street corners you could find shops buying gold and silver in any form they could get their hands on.

That was the year the price of gold hit nearly $2,000 per ounce. The funny thing is, gold has mostly remained elevated since then even though the price has dropped quite a bit (not adjusted for inflation).

Since 2013, gold has swung between roughly $1,100 and $1,400 with the median price somewhere around $1,200. But perspective is important, and as recently as 2004, the precious metal was only $400 an ounce! It’s back up to about $1,350 these days with the USD once again potentially heading south.

Gold investors will buy everything from physical gold (like gold coins) to gold ETFs to gold mining companies. Looking at gold miners, their fortunes are clearly tied into the price of gold. For example, VanEck Vectors Gold Miners ETF (GDX) is down from the $60 level in 2012 to about $23.

But it’s been an even tougher road for junior gold miners. These companies are generally more about prospecting and less about maintaining cash flows. In other words, they’re riskier… and it shows.

VanEck Vectors Junior Gold Miners ETF (GDXJ) was trading at around $160 in gold’s heyday (2011-2012). Now it’s trading about $32. From a percentage standpoint, junior miners got hammered at far bigger clip than established miners.

Of course, this makes sense. If the price of gold is falling, why take a chance on companies which are risky bets to begin with? Investors are far more likely to take risks with gold trading at $1,800 an ounce.

So are junior miners going to make a comeback now that the price of gold has been climbing? Let’s take a look at the options market for some clues.

Regarding GDXJ, options order sentiment has definitely been positive over the last month. On average, 77% of the options contracts which have traded every day over the last 30 days have been bullish. That’s about as lopsided as you’ll see as far as a 30-day average.

In addition, I recently came across a pretty sizable bullish trade on GDXJ options. With the share price at $32.16, a bullish trader grabbed 1,200 November 35-strike calls for $1.61. That’s a $193,000 bet that GDXJ will be above $36.61 by November expiration.

First off, that one block makes up about 10% of the average daily options volume for GDXJ. Relatively speaking, it’s a huge trade for this stock. Second, even though expiration isn’t until November (5 months away), the position doesn’t even break even until GDXJ climbs 14% higher.

In other words, this is a very bullish trade on junior gold miners. And, it likely suggests that gold is going to keep climbing in the coming weeks and months.

Finally, this is an easy trade to make in your own account if you are bullish on gold in the second half of this year. You only risk the money you spend on the calls, but you have unlimited upside potential should gold and junior gold miners take off.

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Source: Investors Alley

Four Big Reasons You Need to Stick with Microsoft Stock

At the start of this decade, there were some concerns that the innovation curve at Microsoft (NASDAQ:MSFT) was falling flat, and that the company was growing stale, resting on its laurels, and becoming increasingly irrelevant in a rapidly changing big tech landscape. As a result, there was something of a lackluster enthusiasm for Microsoft stock

microsoft stock msft stock

Source: Johannes Marliem Via Flickr

Then, just over seven years ago, in February 2014, Satya Nadella succeeded Steve Ballmer as the CEO of Microsoft. He promised change. Specifically, he promised to shift Microsoft’s focus to cloud services, and in so doing, returning Microsoft not just to big tech relevancy, but once again make Microsoft one of the most important companies in the world.

He’s done just that. Microsoft is once again one of the largest companies in the world, and its stock has risen 250% since early 2014.

Will this big rally in MSFT stock continue? Yes. For four very simple reasons.

Four Reasons to Love Microsoft Stock

First, the big cloud pivot isn’t over just yet, and Microsoft’s many cloud businesses continue to fire on all cylinders.

Second, every other business at Microsoft continues to move in the right direction, and make revenue and profit gains.

Third, the company is side-stepping big tech regulation which is threatening other tech giants like Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Apple(NASDAQ:AAPL), and Alphabet (NASDAQ:GOOG).

Fourth, the valuation underlying MSFT stock remains reasonable relative to long term growth prospects.

Net net, cloud growth plus tangential business growth will drive continued revenue and profit growth over the next several years. The lack of a regulation threat means that this growth trajectory has tremendous clarity. At the same time, the valuation is reasonable enough to allow for that growth to drive healthy share price gains.

The takeaway? Stick with Microsoft stock for the long run.

The Cloud Business Is Firing on All Cylinders

The first, and most important, reason to stick with MSFT stock is that the company and stock’s biggest driver – the cloud business – remains on fire.

The cloud pivot has been the core of Microsoft stock’s big 250% rally since early 2014. This pivot is far from over. Last quarter, commercial cloud revenue rose more than 40%. That’s a big growth rate. It won’t head much lower anytime soon. Only 20% of enterprise workloads have migrated to the cloud. That number will move towards 100% in the long run, meaning that the global cloud market still has a long runway for growth.

Further, Microsoft continues to innovate and expand share in that market, meaning Microsoft cloud growth rates should continue to outpace cloud market growth rates. Thus, with Microsoft, you have a leading cloud player that’s growing share in the secular growth cloud market. Ultimately, that means Microsoft’s cloud business will continue to fire off 20%-plus growth quarters for a lot longer.

All Other Businesses Are Moving in the Right Direction

Although the core cloud businesses steal the spotlight at Microsoft, the company’s other businesses are actually doing very well, and will continue to support higher prices for the stock.

On the gaming front, Microsoft just announced its next-gen Xbox console, dubbed “Project Scarlett”, which is set to be four times more powerful than its predecessor, the Xbox One X. Microsoft is also testing the waters in the cloud gaming world with its “Project xCloud” video game streaming service.

Meanwhile, on the office products front, Microsoft just incorporated real-time financial data into Microsoft Excel spreadsheets, a move that could help offset the subtle migration from Microsoft Excel to Google Sheets.

At the same time, LinkedIn has continued to expand its reach in the business networking world, and Microsoft’s PC business has made steady share gains thanks to the huge popularity of the Surface.

All in all, it isn’t just Microsoft’s cloud business which is doing really well right now. All of Microsoft’s businesses are doing well.

The Company Is Side-Stepping Big Tech Regulation

Importantly, Microsoft does not have the regulation risks which are weighing on fellow big tech stocks.

There are five big tech stocks in the U.S. which have $500 billion-plus market caps – Microsoft ($1 trillion market cap), Amazon ($930 billion), Apple ($900 billion), Alphabet ($760 billion), and Facebook ($535 billion). Of those five big tech giants, Microsoft is the only one not being probed by either the FTC or DoJ for anti-competitive reasons.

From a market psychology perspective, that’s a big deal. Investors with Amazon/Apple/Alphabet/Facebook exposure may not want that exposure anymore because of the regulatory risks, but because the tech growth narrative remains vigorous, those investors will still want big tech exposure. Where can they get big tech exposure without the regulation headwind? Microsoft is the only place.

Consequently, we could see a migration of investment dollars from other big techs stocks to MSFT stock as regulation headwinds build.

Valuation Remains Reasonable

Lastly, the valuation underlying Microsoft remains reasonable relative to the company’s long term growth prospects.

Microsoft stock trades around 29-times forward earnings. That’s as rich as the valuation has been in the past decade. But, growth is also as big as its been in the past decade. According to Street estimates, profits are expected to rise 18% this year, 11% next year, and 15% the following year.

In other words, Microsoft projects as a steady double-digit profit grower over the next several years, and that growth has tremendous visibility thanks to secular growth tailwinds in the cloud market and the lack of regulation risks. A near 30-times forward multiple for that magnitude of growth and that level of growth clarity seems reasonable.

Bottom Line on Microsoft Stock

Microsoft stock has been a big winner for the past seven years. It will continue to be a winner over the next several years, too, because the cloud business remains on the fire, the company’s other businesses are doing well, the growth trajectory has tremendous clarity, and the valuation remains reasonable.

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

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Source: Investors Place

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