Dividend investing is one of the most popular themes among investors — and rightfully so. Multiple studies have confirmed the market-busting returns of dividend stocks. Ned Davis Research found that over the four decades through 2014, dividend-paying stocks returned 7.6% on an annualized basis versus just 2.6% from stocks that paid no dividend. And that’s just the companies that kept their payouts consistent. Companies that regularly increased their dividend payouts returned 10.1% annually. #-ad_banner-#Not only do dividend stocks often outperform their non-dividend peers but they do it with less risk. Over the five years through 2015,… Read More

Dividend investing is one of the most popular themes among investors — and rightfully so. Multiple studies have confirmed the market-busting returns of dividend stocks. Ned Davis Research found that over the four decades through 2014, dividend-paying stocks returned 7.6% on an annualized basis versus just 2.6% from stocks that paid no dividend. And that’s just the companies that kept their payouts consistent. Companies that regularly increased their dividend payouts returned 10.1% annually. #-ad_banner-#Not only do dividend stocks often outperform their non-dividend peers but they do it with less risk. Over the five years through 2015, dividend stocks recorded a standard deviation (a measure of risk in returns) of just 10.0 versus 14.3 for non-dividend payers. But historically-low interest rates have forced investors out of bonds and into dividend stocks for yield. Valuations look stretched and the U.S. economy just recorded its slowest growth in three years. While there’s no reason to believe that dividend stocks won’t continue to outperform the market going forward, investors can’t ignore record-high valuations after eight years of surging stock prices. It does little good to grab a hefty 3% dividend if valuations collapse and prices fall 10% or more. But… Read More

We cover a lot of different topics in my premium income newsletter, High-Yield Investing. One thing I make a point to feature in each issue is a detailed screen of some sort for interesting income opportunities. Sometimes I run straightforward, simple screens, like last month’s search for low-cost, high-yield equity income funds. Other months we might track down potential short squeeze candidates, talk about ways to combat inflation or hunt for highly efficient businesses that generate the most revenue per employee. This month, I wanted to get back to basics and pinpoint a few stocks that are poised for meaningful… Read More

We cover a lot of different topics in my premium income newsletter, High-Yield Investing. One thing I make a point to feature in each issue is a detailed screen of some sort for interesting income opportunities. Sometimes I run straightforward, simple screens, like last month’s search for low-cost, high-yield equity income funds. Other months we might track down potential short squeeze candidates, talk about ways to combat inflation or hunt for highly efficient businesses that generate the most revenue per employee. This month, I wanted to get back to basics and pinpoint a few stocks that are poised for meaningful dividend hikes in the near future. According to FactSet Research, dividend distributions among S&P 500 companies have increased for 11 straight quarters. Over the past year, aggregate payments are up 4.8% to $431 billion. That’s the good news. The bad news is that many companies have reached the upper limits of what they can afford to distribute relative to current profits. #-ad_banner-#In fact, 44 members of the S&P (almost 10%) have unsustainable payout ratios above 100%, meaning they aren’t earning enough to cover their dividend payments. Many of these companies may have trouble maintaining their current… Read More

Dividend-focused investing, while on the surface designed for producing income, is also one of the best ways to build wealth in the stock market. The trick is identifying top-paying dividend stocks and then consistently reinvesting the dividends. Dividend reinvestment allows the power of compound interest to work in your favor. Even in 2017’s volatile market, I’ve located seven top-paying dividend stocks that can make a great addition to your portfolio. They are also a smart way to start to build a diversified income portfolio if you are just starting out. What I haven’t included are the crazies — you know,… Read More

Dividend-focused investing, while on the surface designed for producing income, is also one of the best ways to build wealth in the stock market. The trick is identifying top-paying dividend stocks and then consistently reinvesting the dividends. Dividend reinvestment allows the power of compound interest to work in your favor. Even in 2017’s volatile market, I’ve located seven top-paying dividend stocks that can make a great addition to your portfolio. They are also a smart way to start to build a diversified income portfolio if you are just starting out. What I haven’t included are the crazies — you know, the ultra-high dividend payers with yields that are unsustainable, often due to a plunging stock price. While buzz-worthy and temporarily profitable, these investments are hardly suitable for a reliable portfolio. These seven top-paying dividend stocks have proven, justifiable yields. Even better, I fully expect them to provide better than average price performance over the next 12 months. The 7 Top-Paying Dividend Stocks You Need To Know 1. Enterprise Products Partners (NYSE: EPD) EPD is a master limited partnership-structured company in the natural gas sector. The Houston-based pipeline operator pays nearly 6% and is America’s largest company in its niche. Read More

The S&P500 has gone nowhere since mid-February as investors start to wonder how much farther the bull can run. Fears over geopolitical issues, weakening expectations for earnings and the economy, and doubts on tax reform have all put investors on edge. The VIX volatility index, also known as the “Fear Gauge,” jumped 29% to 15.9 over the first two weeks of April to reach its highest point this year. A total of 527 companies cut their dividend payments at the height of the financial crisis in 2009 and only the most stalwart dividend-payers survived. Even bellwether names like General Electric,… Read More

The S&P500 has gone nowhere since mid-February as investors start to wonder how much farther the bull can run. Fears over geopolitical issues, weakening expectations for earnings and the economy, and doubts on tax reform have all put investors on edge. The VIX volatility index, also known as the “Fear Gauge,” jumped 29% to 15.9 over the first two weeks of April to reach its highest point this year. A total of 527 companies cut their dividend payments at the height of the financial crisis in 2009 and only the most stalwart dividend-payers survived. Even bellwether names like General Electric, Dow Chemical, and JP Morgan cut their payments to investors. Protecting your portfolio from falling stock prices and dividend cuts today means finding companies with sustainable dividends from strong cash flows and a best-of-breed brand. When looking for which stocks have the highest dividends, I use four fundamental factors to find the companies with the commitment and cash flow to keep putting money in my pocket. Seeking Sustainable Dividends Against Market Stress First-quarter earnings are slowly starting to come in and the results are a mixed bag. The S&P 500 closed flat last week as investors started to question… Read More

The financial sector was on fire in 2016. Immense annual gains of 50%, 60%, and greater were pocketed by investors who caught the trend. Don’t worry, I’m not talking about speculative fintech or other risky high-tech financial names. Believe it or not, the outsized gains were made in solid, multi- billion dollar companies like JP Morgan (NYSE: JPM) and Bank of America (NYSE: BAC). Hopefully, your portfolio captured some or all of this historic upside. But It’s Not Too Late If you missed riding the uptrend higher, or simply want to have a chance to pocket additional gains, it’s… Read More

The financial sector was on fire in 2016. Immense annual gains of 50%, 60%, and greater were pocketed by investors who caught the trend. Don’t worry, I’m not talking about speculative fintech or other risky high-tech financial names. Believe it or not, the outsized gains were made in solid, multi- billion dollar companies like JP Morgan (NYSE: JPM) and Bank of America (NYSE: BAC). Hopefully, your portfolio captured some or all of this historic upside. But It’s Not Too Late If you missed riding the uptrend higher, or simply want to have a chance to pocket additional gains, it’s not too late. I have identified five solid financial stocks that still have tremendous upside potential and pay hefty dividends. #-ad_banner-#Amazingly, these stocks trade in a market that has never had a financial calamity since the 19th century. This industry remained stable during both the Great Depression and the global banking crisis of 2008. This market, the Canadian banking industry, never experienced a financial crisis due to a myriad of reasons that are beyond the scope of this article. Suffice to say; the Canadian banking system is widely considered to be a bastion of stability. In comparison, the United States… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or only buying and holding investments altogether. #-ad_banner-#That’s how powerful this strategy is: It can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike. The technique involves selling options. If you’ve never tried your hand at options before, don’t worry — the kind of options strategy I’m talking about is perhaps the safest, easiest way to execute a trade… Read More

It’s one of the easiest and safest ways to generate 20%-plus returns on a regular basis. Once you’ve mastered the technique, I wouldn’t be surprised if you stopped trading stocks or only buying and holding investments altogether. #-ad_banner-#That’s how powerful this strategy is: It can drastically improve the way you make money in the markets. That goes for conservative income investors and aggressive traders alike. The technique involves selling options. If you’ve never tried your hand at options before, don’t worry — the kind of options strategy I’m talking about is perhaps the safest, easiest way to execute a trade for income that you’ll ever come across. Specifically, I’m referring to selling call options. A call option gives the buyer the right — but not the obligation — to buy a stock from the call seller if it’s trading above a specified price before a specified date. When you sell a call option, you accept the potential obligation to sell a particular stock at a specified price at a set time in the future. When you sell a call, you generate what I call “Instant Income,” also known as a premium, upfront. I only recommend selling covered calls. A covered… Read More

As equity markets grind higher and investors complain about the absence of value, they continue to flock toward cheap and efficient exchange-traded funds (ETFs). Money directed to equity ETFs grew 13% in 2016, pushing the assets under management to $2.4 trillion in the U.S. alone. While the ETF growth stampede continues, seemingly ignoring valuations in some cases, an ocean of value is being ignored among the ETF’s grandparents: the venerable closed-end fund (CEF). #-ad_banner-#I’ve always had a soft spot for the good old CEF. They tend to fly under the radar. So, before we go shopping, here’s a little historical… Read More

As equity markets grind higher and investors complain about the absence of value, they continue to flock toward cheap and efficient exchange-traded funds (ETFs). Money directed to equity ETFs grew 13% in 2016, pushing the assets under management to $2.4 trillion in the U.S. alone. While the ETF growth stampede continues, seemingly ignoring valuations in some cases, an ocean of value is being ignored among the ETF’s grandparents: the venerable closed-end fund (CEF). #-ad_banner-#I’ve always had a soft spot for the good old CEF. They tend to fly under the radar. So, before we go shopping, here’s a little historical background. CEFs trace their origin to investment trusts organized in Great Britain during the 1860s. The objective was to raise money for investment in the British Empire’s colonial possessions as well as to provide capital to the rapidly expanding railroads in the United States. Financed using bank leverage or the sale of debentures, their primary objective was income rather than capital appreciation. CEFs gained popularity in the United States during the Roaring Twenties. Prior to the Crash of 1929, CEF assets topped $4.5 billion, a significant chunk of the stock market’s total capitalization. But with the market excesses of that… Read More

There are two young co-workers, Mark and Lizzy, who are both serious about setting aside money for the future. After doing some research, Lizzy finds a reputable blue-chip dividend mutual fund and decides to open with a modest $1,000 investment. After that, she contributes $100 from every bi-weekly paycheck. She doesn’t see much accumulation at first. But over time, her account value starts to build. After 25 years at an average compounded annual return of 8.0% after expenses, Lizzy would be sitting on a nice sum of $204,722. #-ad_banner-#Meanwhile, across the office, Mark finds a similar equity income fund and… Read More

There are two young co-workers, Mark and Lizzy, who are both serious about setting aside money for the future. After doing some research, Lizzy finds a reputable blue-chip dividend mutual fund and decides to open with a modest $1,000 investment. After that, she contributes $100 from every bi-weekly paycheck. She doesn’t see much accumulation at first. But over time, her account value starts to build. After 25 years at an average compounded annual return of 8.0% after expenses, Lizzy would be sitting on a nice sum of $204,722. #-ad_banner-#Meanwhile, across the office, Mark finds a similar equity income fund and invests the same amount. His fund delivers an identical annual return, with one difference. It carries an extra 50 basis points (one-half of one percent) in additional yearly fees and expenses. Because of that extra drag, Mark’s account grows to just $189,644 over the same time frame — a difference of more than $15,000. For the sake of illustration, let’s suppose we start with a $10,000 upfront investment and assume a stronger annual return of 9%. Under that scenario, the two accounts would grow to around $316,000 and $290,000, respectively — a difference of $26,000. And keep in mind, that… Read More

Recently, I had to take an exam for yet another license my industry requires me to have. Aside from feeling like I’d given birth to a compliance officer afterwards, I came away from the experience, newly minted license in hand, with an investment idea. I took the exam, on a computer workstation of course, at one of the many testing centers owned and managed by British education and multi-media publisher Pearson PLC (NYSE: PSO). Although my exam was specific to the financial industry, qualification exams for other professions are also administered at the centers, including nursing and engineering to name… Read More

Recently, I had to take an exam for yet another license my industry requires me to have. Aside from feeling like I’d given birth to a compliance officer afterwards, I came away from the experience, newly minted license in hand, with an investment idea. I took the exam, on a computer workstation of course, at one of the many testing centers owned and managed by British education and multi-media publisher Pearson PLC (NYSE: PSO). Although my exam was specific to the financial industry, qualification exams for other professions are also administered at the centers, including nursing and engineering to name a few.  Honestly, when I first looked at the stock, I was not impressed.     As you probably know, I’m not a chart guy. But if you go by these tea-leaves, the wiggles aren’t encouraging — and neither are the fundamentals. Earnings Per Share (EPS) has declined, on average, 131% on an annual basis over the last two years. Annual revenue has shrunk by 9.5% on average for the same period. But the short-term pain may be paving the way for long term gain. #-ad_banner-# Pearson, like most large publishing and media companies, is grappling with the disruptive technological… Read More

The technology sector isn’t known for paying out juicy dividends. Companies from the high-growth sector tend to re invest their cash into expanding instead of returning it to investors. However, 17 years after the dot-com bubble popped in March of 2000, a group of former tech highflyers is quietly evolving into some of the best dividend payers in the S&P 500. #-ad_banner-#Apple, Inc. (Nasdaq: AAPL) is a great example. Apple began paying a dividend in 2012, and now offers a 1.6% yield after growing its dividend by 27% in the last three years. With more than $200 billion in cash,… Read More

The technology sector isn’t known for paying out juicy dividends. Companies from the high-growth sector tend to re invest their cash into expanding instead of returning it to investors. However, 17 years after the dot-com bubble popped in March of 2000, a group of former tech highflyers is quietly evolving into some of the best dividend payers in the S&P 500. #-ad_banner-#Apple, Inc. (Nasdaq: AAPL) is a great example. Apple began paying a dividend in 2012, and now offers a 1.6% yield after growing its dividend by 27% in the last three years. With more than $200 billion in cash, I expect Apple to continue growing its dividend for years to come. While those stats are impressive, another legendary tech stock offers a better dividend yield and growth. This global leader pays out a 2.4% yield, a 50% premium to Apple’s 1.6% yield. It has grown its dividend by 44% in the last three years, a 63% premium to Apple. And finally, with just over $100 billion in cash on its balance sheet, I am expecting its dividend payment to grow more than 100% in the next five years. The company, Microsoft, (Nasdaq: MSFT) is one of the greatest growth… Read More