Individual investors and private equity firms often target companies with great yields. But they are talking about two different numbers.  While the first crowd focuses on divided yields, the big-game hunters focus on free cash flow yield. In fact, if you draw a connection between the two, you can find the path to stocks that are capable of robust dividend growth — and just may get acquired at a nice premium.#-ad_banner-# To understand why free cash flow yields are so important, you just need to look at the frenzied pursuit of Dell Inc. (Nasdaq: DELL) by Southeastern Asset… Read More

Individual investors and private equity firms often target companies with great yields. But they are talking about two different numbers.  While the first crowd focuses on divided yields, the big-game hunters focus on free cash flow yield. In fact, if you draw a connection between the two, you can find the path to stocks that are capable of robust dividend growth — and just may get acquired at a nice premium.#-ad_banner-# To understand why free cash flow yields are so important, you just need to look at the frenzied pursuit of Dell Inc. (Nasdaq: DELL) by Southeastern Asset Management, Silver Lake Partners, Carl Icahn and Michael Dell. All of these big-money players knew that Dell Inc. was quite undervalued in the context of its prodigious free cash flow. Over the past four fiscal years, Dell has generated a cumulative $14.5 billion in free cash flow. That’s just $2 billion less than all of Dell’s enterprise value. Assuming that Dell is able to maintain that level of free cash flow, then the current proposed buyout will pay for itself in less than five years. After that, it’s pure profit. Many private equity firms can do even better by using their… Read More

When is the best time to focus on a particular industry? When it’s deeply out of favor. Every industry hits the occasional rough patch, which typically leads investors to focus their attention elsewhere. Yet when the rough patch ends, and the skies start to brighten, you have a chance to dig into the group before the crowd returns. That’s precisely the set up in place for a group of companies known as upstream MLPs. These master limited partnerships focus on mature energy fields. These firms don’t focus on the early stage of energy exploration, and instead buy mature oil and… Read More

When is the best time to focus on a particular industry? When it’s deeply out of favor. Every industry hits the occasional rough patch, which typically leads investors to focus their attention elsewhere. Yet when the rough patch ends, and the skies start to brighten, you have a chance to dig into the group before the crowd returns. That’s precisely the set up in place for a group of companies known as upstream MLPs. These master limited partnerships focus on mature energy fields. These firms don’t focus on the early stage of energy exploration, and instead buy mature oil and gas fields that other firms have chosen to sell.  It’s an industry known for a lot of deals, as the key players boost sales and replace existing assets that eventually start to post declining output. Nearly $2.5 billion in transactions were completed in 2010, rising to $5.8 billion in 2012, according to Credit Suisse. And investors were expecting even higher amounts of deal-making in 2013 — until Linn Energy (Nasdaq: LINE) spoiled the party.#-ad_banner-# One of the industry’s most acquisitive firms, Linn has tended to utilize aggressive accounting measures to justify the economics of its deals to investors. That caught… Read More

Call it “The Mystery of the Secret Payout.” When I was young, Frank and Joe Hardy — the Hardy Boys — were my heroes. There was no shortage of bad guys in Bayport on Barmet Bay. That’s where the fictional teenage brothers and amateur detectives cracked cases involving all manner of miscreant behavior, from murder to auto theft to the ever-popular diamond smuggling.#-ad_banner-# Their adventures had titles such as “The Sinister Signpost,” “The Secret of Skull Mountain” and “The Crisscross Shadow.” What all-American adolescent reader could resist? The original Hardy Boys mystery stories consisted of 58 books published… Read More

Call it “The Mystery of the Secret Payout.” When I was young, Frank and Joe Hardy — the Hardy Boys — were my heroes. There was no shortage of bad guys in Bayport on Barmet Bay. That’s where the fictional teenage brothers and amateur detectives cracked cases involving all manner of miscreant behavior, from murder to auto theft to the ever-popular diamond smuggling.#-ad_banner-# Their adventures had titles such as “The Sinister Signpost,” “The Secret of Skull Mountain” and “The Crisscross Shadow.” What all-American adolescent reader could resist? The original Hardy Boys mystery stories consisted of 58 books published between 1927 and 1979. I lived vicariously through many of them. These days, I still like a good detective story — John Sandford’s “Prey” series featuring Minneapolis cop Lucas Davenport is my favorite. But when it comes to dividend sleuthing, The Daily Paycheck’s Amy Calistri is hard to top. Consider a recent installment of Amy’s, “These Above-Average Yields are Hiding in Plain Sight.” StreetAuthority researcher Austin Hatley introduced you to the topic earlier this month, but it’s a tale worth retelling. Remember the Baker Street Irregulars? They were the band of urchins upon whom Sherlock Holmes relied for tips. “Holmes… Read More

I probably don’t have to tell you this, but the odds are stacked against you when it comes to “beating the market.”  By nearly 6 to 1 in fact… Investment analysts, advisors and fund managers — the so-called experts — spend their entire working lives and billions of dollars on research vowing to “beat the market” in any given year — yet the vast majority of them fail… Just look at mutual fund industry’s record. In the past three years, just 14% of actively-managed mutual fund managers matched or exceeded the market’s performance according to Standard & Poor’s. So how… Read More

I probably don’t have to tell you this, but the odds are stacked against you when it comes to “beating the market.”  By nearly 6 to 1 in fact… Investment analysts, advisors and fund managers — the so-called experts — spend their entire working lives and billions of dollars on research vowing to “beat the market” in any given year — yet the vast majority of them fail… Just look at mutual fund industry’s record. In the past three years, just 14% of actively-managed mutual fund managers matched or exceeded the market’s performance according to Standard & Poor’s. So how are the small minority beating the market? After years of research, we’ve found that more often than not, companies with just three basic characteristics are the ones that consistently beat the S&P 500… They often pay much higher dividend yields than the S&P 500 too. In fact, eight out of 10 stocks chosen for our “Top 10 Stocks For 2014” report paid a higher dividend yield than the S&P 500. A few even carried yields over 4.3% — more than twice the S&P 500’s yield. Don’t believe it’s as simple as three traits to find market-beating stocks? Consider our track… Read More

Every quarter, the board of directors at youth-focused retailer The Buckle (NYSE: BKE) must decide how generous they will be with the company’s cash.#-ad_banner-# After all, they realize that many of the company’s investors count on dividends to help supplement their income. But these directors like to tread cautiously. They know that retail spending is hard to predict, and in any given year, sales and profits might not be as strong as the year before. The cautious approach explains why The Buckle is only committed to an $0.80 a share annual dividend — the same payout… Read More

Every quarter, the board of directors at youth-focused retailer The Buckle (NYSE: BKE) must decide how generous they will be with the company’s cash.#-ad_banner-# After all, they realize that many of the company’s investors count on dividends to help supplement their income. But these directors like to tread cautiously. They know that retail spending is hard to predict, and in any given year, sales and profits might not be as strong as the year before. The cautious approach explains why The Buckle is only committed to an $0.80 a share annual dividend — the same payout the company has offered for four straight years. Indeed, if you go to the leading financial websites, such as Yahoo Finance, you’ll spot that $0.80 a share payout, which translates into a so-so 1.5% dividend yield. But these websites don’t have their facts straight. The truth behind The Buckle’s dividend strategy is a lot more compelling. Let me explain… Even as this retailer sticks with a conservative dividend policy on a quarterly basis, investors are also treated to special one-time annual dividends that really change the game. The Buckle paid out a special $2.30 a share special dividend… Read More

If lending money to the government for years is one of the worst things you can do, then this strategy is the smartest. The 30-year U.S. Treasury Bond is quite possibly the worst investment option out there right now. Even your Uncle Dave’s coin and baseball card collection might offer better long-term returns. Let’s forget for a moment about the Fed’s intention to taper quantitative easing, which has already begun to place upward pressure on interest rates (and thus downward pressure on bond prices). And let’s forget that the longer a bond’s duration, the greater its sensitivity to interest rate… Read More

If lending money to the government for years is one of the worst things you can do, then this strategy is the smartest. The 30-year U.S. Treasury Bond is quite possibly the worst investment option out there right now. Even your Uncle Dave’s coin and baseball card collection might offer better long-term returns. Let’s forget for a moment about the Fed’s intention to taper quantitative easing, which has already begun to place upward pressure on interest rates (and thus downward pressure on bond prices). And let’s forget that the longer a bond’s duration, the greater its sensitivity to interest rate movements. So with every basis point uptick, nothing will feel the pain more acutely than the 30-year “long bond.” #-ad_banner-#Let’s even forget that Uncle Sam’s credit rating has already been downgraded by at least one ratings agency.  Even if interest rates don’t rise and Congress miraculously balances the budget — a best-case scenario — you’re still tying up your capital for the next three decades at a paltry rate of around 3.5%. But here’s the kicker: when your principal is finally repaid in the distant future, those dollars will have lost much of their purchasing power. Just ask anyone who… Read More

This is the most foolproof way I can think of to earn 1,000% returns and yields above 50%. It may sound impossible, but this will be a reality for many forward-thinking investors. The numbers will be different for every investor, depending on when they recognized this opportunity. Those who saw it earliest will make the most money. I’ll explain everything you need to know shortly. But before we go any further, you need to understand one very critical point… #-ad_banner-#To take advantage of this opportunity you have to change the way you look at your portfolio…  As it stands, many… Read More

This is the most foolproof way I can think of to earn 1,000% returns and yields above 50%. It may sound impossible, but this will be a reality for many forward-thinking investors. The numbers will be different for every investor, depending on when they recognized this opportunity. Those who saw it earliest will make the most money. I’ll explain everything you need to know shortly. But before we go any further, you need to understand one very critical point… #-ad_banner-#To take advantage of this opportunity you have to change the way you look at your portfolio…  As it stands, many investors will ignore what I’m going to share with you… and I know exactly why. You see, as with any great goal, this one will take time to reach. Try to think of a great achievement that only took a few weeks or months to accomplish — they are few and far between. It took decades to put a man on the moon. It took decades to develop a vaccine for polio. It took four years to construct the Golden Gate Bridge… and five years to build the Hoover Dam. These accomplishments weren’t done in a few weeks or a… Read More

This is the most foolproof way I can think of to earn 1,000% returns and yields above 50%. It may sound impossible, but this will be a reality for many forward-thinking investors. The numbers will be different for every investor, depending on when they recognized this opportunity. Those who saw it earliest will make the most money. I’ll explain everything you need to know shortly. But before we go any further, you need to understand one very critical point… #-ad_banner-#To take advantage of this opportunity you have to change the way you look at your portfolio…  As it stands, many… Read More

This is the most foolproof way I can think of to earn 1,000% returns and yields above 50%. It may sound impossible, but this will be a reality for many forward-thinking investors. The numbers will be different for every investor, depending on when they recognized this opportunity. Those who saw it earliest will make the most money. I’ll explain everything you need to know shortly. But before we go any further, you need to understand one very critical point… #-ad_banner-#To take advantage of this opportunity you have to change the way you look at your portfolio…  As it stands, many investors will ignore what I’m going to share with you… and I know exactly why. You see, as with any great goal, this one will take time to reach. Try to think of a great achievement that only took a few weeks or months to accomplish — they are few and far between. It took decades to put a man on the moon. It took decades to develop a vaccine for polio. It took four years to construct the Golden Gate Bridge… and five years to build the Hoover Dam. These accomplishments weren’t done in a few weeks or a… Read More

We’ve seen compounding referred to as “the most powerful force in the universe,” “the royal road to riches,” and “the greatest mathematical discovery in human history.” Albert Einstein called compounding the eighth wonder of the world. Compounding is a simple investment strategy in which you put your money in an… Read More

Year after year, credit card processor MasterCard (NYSE: MA) paid out a simple annual dividend of 60 cents a share. Management thought the payment was a nice gesture to investors, but… Read More