Last year, I was reminded of one of the most important keys to building a successful income-generating portfolio. The epiphany came when I was stuck at the airport while on a family vacation, of all things. #-ad_banner-#Most of us wait to board our plane with little thought to the activity going on outside the terminal. While we check our email one last time, a bevy of critical activities are taking place to ensure our flight arrives and leaves in a safe and timely fashion. This may seem arbitrary, but in fact… Read More

Last year, I was reminded of one of the most important keys to building a successful income-generating portfolio. The epiphany came when I was stuck at the airport while on a family vacation, of all things. #-ad_banner-#Most of us wait to board our plane with little thought to the activity going on outside the terminal. While we check our email one last time, a bevy of critical activities are taking place to ensure our flight arrives and leaves in a safe and timely fashion. This may seem arbitrary, but in fact it’s the premise of a highly profitable, often overlooked business. You may not know this, but these vital services are commonly performed by private contractors known as fixed base operators (FBOs). In addition to the sale of aviation fuel, FBOs also handle parking, hangaring and tie-down. In some cases, they offer ancillary services ranging from maintenance and repair to in-flight food and beverage catering. Imagine a town with only one gas station, and you appreciate the advantageous position that these FBOs are exploiting. Most (but not all) airport operating authorities grant a single FBO… Read More

While Wall Street analysts focus on how a company will fare in the next quarter, I’m always thinking about what a business will look like in five, 10 or even 20 years down the road. Some companies simply hope that business will be good in future years, while others can speak with a high degree of confidence about their long-term goals. That’s because these firms share one key trait: they have a “sticky” customer base. #-ad_banner-#Let’s take Automatic Data Processing, Inc. (Nasdaq: ADP) as an example. The company provides outsourced payroll… Read More

While Wall Street analysts focus on how a company will fare in the next quarter, I’m always thinking about what a business will look like in five, 10 or even 20 years down the road. Some companies simply hope that business will be good in future years, while others can speak with a high degree of confidence about their long-term goals. That’s because these firms share one key trait: they have a “sticky” customer base. #-ad_banner-#Let’s take Automatic Data Processing, Inc. (Nasdaq: ADP) as an example. The company provides outsourced payroll management and other services typically handled by human resources departments. Although ADP provides clear value to its clients, the company boasts of a 91% annual retention rate for another reason: switching costs. You see, once a client has agreed to turn over its business processes to ADP, it becomes awfully hard to take that business back. That means a new customer that ADP signs up today is likely to stick around through the next bear market and the next bull market. We can see proof of this by looking at how ADP fared during… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were. In a previous issue of StreetAuthority Daily, I detailed the raw power of dividend investing (here), but this isn’t the whole story. #-ad_banner-#You see, there’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon is due to a glitch in the way the financial… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were. In a previous issue of StreetAuthority Daily, I detailed the raw power of dividend investing (here), but this isn’t the whole story. #-ad_banner-#You see, there’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon is due to a glitch in the way the financial media reports certain companies’ financial information. We call this group of stocks “Hidden High Yielders.” And if you know where to look, you can find companies yielding three, six… even seven times more than the yield posted on financial websites. For Hidden High Yielders, their true payout is actually much higher because there are dozens of supplemental dividends that go unreported each quarter. But by “unreported,” I don’t mean some secret way of transferring cash to a select group of well-connected insiders. These extra payments are dished out openly and uniformly… Read More

Ever rooted for the underdog when you knew it couldn’t win? In basketball — as in many sports — this happens all the time. In the recent NCAA tournament, for example, Hampton (17-17 in the regular season) was pit against Kentucky (34-0). The chance that Hampton would upset this perennial powerhouse was slim to none. And yet, millions of dollars were put down on this underdog by betters all across the country. Why? Because these folks were betting on another game entirely. One with better odds and higher… Read More

Ever rooted for the underdog when you knew it couldn’t win? In basketball — as in many sports — this happens all the time. In the recent NCAA tournament, for example, Hampton (17-17 in the regular season) was pit against Kentucky (34-0). The chance that Hampton would upset this perennial powerhouse was slim to none. And yet, millions of dollars were put down on this underdog by betters all across the country. Why? Because these folks were betting on another game entirely. One with better odds and higher rewards… One that casual fans had no idea was going on right in front of them. A similar thing plays out every day in the investing world. If you understand it you stand to profit from high-yield opportunities that most investors will never see. Let me explain… Let’s consider the bond market for a moment. You can put your money on corporate bonds backed by stalwart blue-chip companies like Microsoft and Treasury IOUs. Or you can choose “junk” bonds issued by smaller, shakier businesses. Read More

$71.8 billion. That’s the amount of cash this one sector in the S&P 500 paid stockholders in 2007. Put another way, this industry accounted for nearly one-third of all dividends in the entire S&P 500. However, the financial crash took its toll on this industry — all but eliminating these hefty shareholder payouts in recent years. As a result, investors went elsewhere for income. But now the tides have turned. These companies have mounted an amazing comeback and recently reclaimed their spot as the market’s top dividend-payers. Read More

$71.8 billion. That’s the amount of cash this one sector in the S&P 500 paid stockholders in 2007. Put another way, this industry accounted for nearly one-third of all dividends in the entire S&P 500. However, the financial crash took its toll on this industry — all but eliminating these hefty shareholder payouts in recent years. As a result, investors went elsewhere for income. But now the tides have turned. These companies have mounted an amazing comeback and recently reclaimed their spot as the market’s top dividend-payers. In the next 12 months, this group is slated to distribute $56.5 billion in payments. That’s a full $1 billion more than the runner-up: technology. I’m talking about the financial sector. You see, these companies are not free to raise their dividends whenever they like. New regulations implemented after the financial crisis force them to seek permission from the Federal Reserve. Well, permission granted. Having successfully completed the gauntlet of tests, the nation’s biggest banks were given the green light to share their growing wealth with… Read More

If I asked you to name one of America’s greatest companies, then I would undoubtedly receive a wide range of responses. Many might say Apple (Nasdaq: AAPL) for the way it transformed our daily lives with its revolutionary mobile devices. Some would choose Exxon Mobil (NYSE: XOM), which generates a staggering $437 billion in annual sales. Still others might point to Walt Disney (NYSE: DIS), an iconic business whose beloved movies, characters and theme parks are enjoyed by millions. There is no right or wrong answer, merely opinion. The point is to provoke a… Read More

If I asked you to name one of America’s greatest companies, then I would undoubtedly receive a wide range of responses. Many might say Apple (Nasdaq: AAPL) for the way it transformed our daily lives with its revolutionary mobile devices. Some would choose Exxon Mobil (NYSE: XOM), which generates a staggering $437 billion in annual sales. Still others might point to Walt Disney (NYSE: DIS), an iconic business whose beloved movies, characters and theme parks are enjoyed by millions. There is no right or wrong answer, merely opinion. The point is to provoke a discussion of which attributes make a company “great.” Is it popular products? Dominant market share? Colossal sales? Sky-high profit margins? I, for one, would say none of the above. Let me explain… #-ad_banner-#In The 1927 New York Yankees baseball team is widely regarded as the best team in baseball history. For decades pundits have swooned over the team’s high winning percentage, massive number of home runs and a whole host of other absurd statistics. But none of those stats made the team great; they were simply the byproduct of a great… Read More

They’ve officially become more popular than dividends. Top companies are shelling out these extra payments in droves. The goal is to give shareholders more bang for their investment buck than dividends alone. They are a favorite of Warren Buffett and many other billionaire investors. There’s a good chance you’ve received one of these “tax-free dividends” before and didn’t even realize it. That’s because they’re buried in a company’s financial statement. But since 1982, when the SEC enacted a rule called 10b-18 as a measure of boosting the economy, these “tax-free dividends” have become a favored form of payment among shareholders. Read More

They’ve officially become more popular than dividends. Top companies are shelling out these extra payments in droves. The goal is to give shareholders more bang for their investment buck than dividends alone. They are a favorite of Warren Buffett and many other billionaire investors. There’s a good chance you’ve received one of these “tax-free dividends” before and didn’t even realize it. That’s because they’re buried in a company’s financial statement. But since 1982, when the SEC enacted a rule called 10b-18 as a measure of boosting the economy, these “tax-free dividends” have become a favored form of payment among shareholders. And companies have responded. Just look at the chart below to see how companies have been paying shareholders since 1982, especially since 2005 (hint: it hasn’t been just with traditional dividends)… Now, not every company pays these “tax-free dividends,” but the easiest way to identify which ones are making “tax-free dividend” payments is to explain the payment method itself. As I mentioned, its roots trace back to 1982. It was an awful time for the U.S. economy. We were in a recession, and still suffering from the aftershocks of gas rationing and oil shortages of the 1970s. Loans… Read More

We’ve still got about two weeks to go until April 15 (thankfully). But the clock is ticking, and most of us will need to start gathering W-2s, brokerage statements and other information to file our tax returns soon (if you haven’t already). If you’re like me, all those dividends and interest payments that you cheered through the year will start to elicit more of a groan once the distributions are tallied up and reported to Uncle Sam. #-ad_banner-#If you’re in the upper income tax brackets and haven’t done so already, now may be an opportune time to explore options in… Read More

We’ve still got about two weeks to go until April 15 (thankfully). But the clock is ticking, and most of us will need to start gathering W-2s, brokerage statements and other information to file our tax returns soon (if you haven’t already). If you’re like me, all those dividends and interest payments that you cheered through the year will start to elicit more of a groan once the distributions are tallied up and reported to Uncle Sam. #-ad_banner-#If you’re in the upper income tax brackets and haven’t done so already, now may be an opportune time to explore options in the municipal bond arena. As you may know, muni bonds are used to fund things like roads, schools and bridges in cities all over the country. They are generally exempt from federal taxes, and possibly state taxes as well, depending on where you live and where the bond was issued. I’ve had several of my High-Yield Investing readers ask about muni bonds over the past few weeks. This is an asset class we’ve invested in before, albeit sparingly. My biggest problem with this particular group is that I think it’s only suitable for a portion of readers (lower income readers… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were. #-ad_banner-#In previous issues of StreetAuthority Daily, I detailed the raw power of dividend investing (here) and taught you my method for finding these high yielders (here), but this isn’t the whole story. You see, there’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon… Read More

In the world of income investing, dividends reign supreme. Treasuries and CDs are offering historically low yields and are no longer considered the ultra-safe cash generators that they once were. #-ad_banner-#In previous issues of StreetAuthority Daily, I detailed the raw power of dividend investing (here) and taught you my method for finding these high yielders (here), but this isn’t the whole story. You see, there’s a little-known group of stocks that offer huge dividend payouts, but their yields are not displayed to the public on financial websites like Yahoo! Finance or Morningstar. This phenomenon is due to a glitch in the way the financial media reports certain companies’ financial information. We call this group of stocks “Hidden High Yielders.” And if you know where to look, you can find companies yielding three, six… even seven times more than the yield posted on financial websites. For Hidden High Yielders, their true payout is actually much higher because there are dozens of supplemental dividends that go unreported each quarter. But by “unreported,” I don’t mean some secret way of transferring cash to a select group of well-connected insiders. Read More

With the exception of energy, 2014 was a good year for nearly all of the major market sectors. Healthcare, utilities, technology, consumer staples and other groups have all logged healthy double-digit gains. But when you examine performance by market capitalization rather than by sector, a different story unfolds. Read More