-
-
Two Stocks to Buy in Uncertain Times
Europe’s debt problems are hitting a breaking point, U.S. economic growth is slowing and the Dow is down about 7% in the past month – so investors want to know what to do. Money Morning Capital Waves Strategist Shah Gilani is doing just that – sharing the stocks he thinks will provide safety in these uncertain times. He joined Fox Business’ “Varney & Co.” Tuesday morning to share with host Stuart Varney two investments he has recommended to his Capital Wave Forecast subscribers. One is a solid pharmaceutical company with blockbuster drugs barreling down the pipeline and 4.8% dividend yield. The other is an alternative utility-based investment with 5.8% dividend yield. Watch this clip to learn more.
-
How to Buy Foreign Market Dividend Stocks
- By Don Miller, Contributing Writer, Money Morning
- March 26, 2012
There's nothing better than buying stocks with strong upside and getting paid with cold, hard cash.
It's true here in the United States and in foreign markets all around the world.
As we showed you in last week's article, buying dividend stocks that deliver a steady and growing income stream is a great way to do just that.
But the U.S. isn't the only country with world-beating companies.
In fact, adding a few foreign market dividend stocks will diversify your portfolio and help you sleep better at night, no matter what the U.S. market does.
Here's what you need to know...
To continue reading, please click here...
-
How to Pick Winning Dividend Stocks
- By Don Miller, Contributing Writer, Money Morning
- March 22, 2012
Do you need more income? Join the crowd.
It seems everyone is scouring the landscape these days for decent income investments to beef up their monthly take-home - especially now with the price of gas and other everyday items skyrocketing.
But it's not too late to find great dividend stocks. You can still get cold, hard cash on a regular basis by investing in companies that reward loyal investors with substantial dividends.
In fact, if dividend-paying stocks aren't a major part of your portfolio, the odds of being successful in the markets are stacked against you.
Need proof?
An exhaustive study of stock market returns from 1871 through 2003 showed that over a 135-year period owning stocks and reinvesting the dividends produced 97% of all stock market returns. Meanwhile a paltry 3% was produced by capital gains.
Dividend stocks are safer too. The very same qualities that allow companies to pay steady dividends means they're much less vulnerable to broad market drops than your typical stock.
And right now corporate America is willing to pay even more in dividends.
Companies are on pace to pay a record $263 billion in dividends to shareholders over the next year even though the S&P 500 Index is still more than 10% below its peak, according to S&P Capital IQ reports.
"We're seeing good dividend increases across the board," Richard Helm of Cohen & Steers Dividend Value fund told USA Today.
Buying Great Dividend Stocks
It's no secret - a company's dividends play a major role in their performance. Yet many investors completely ignore this important fact.
But you can't just plunk your money down on any old dividend stock.
To continue reading, please click here...
-
The Best "Buy" of the New Dividend Aristocrats
- By Kerri Shannon, Associate Editor, Money Morning
- January 23, 2012
If you are looking for a steady stream of safe dividends in today's troubled markets, the list of "Dividend Aristocrats" is a good place to start.
Compiled and tracked by Standard & Poor's, Dividend Aristocrats are companies that have consistently increased their dividend payouts for 25 consecutive years.
Currently, there are 51 of them, including the 10 new Dividend Aristocrats added this year.
That offers yield conscious investors a choice of 51 solid companies with a reliable track record of providing guaranteed payments-even during volatile markets and down economic cycles.
"The problem with going for capital growth is that you very often don't get it, and then you've got nothing - the investment just sits there," said Money Morning Global Investing Specialist Martin Hutchinson.
"Dividends" Martin says, "are easy."
Not only are they easy, they're also increasing.
Dividends on the Rise in 2012
Standard & Poor's reported that dividend increases for all their indices in 2011 almost doubled the dividends paid in 2010.
Total dividend increases hit $50.2 billion last year - an 89.2% rise over 2010's dividend increases of $26.5 billion - and are expected to climb even higher in 2012.
That's welcome news for investors searching for steady income sources in a zero-growth environment.
Few other assets - especially bonds - are expected to deliver an increased payout this year.
"With 10-year Treasury bond yields below 2%, bonds just don't give you the income they used to," said Hutchinson. "Dividend stocks can give you a better yield than bonds, and if you pick the right ones, will provide both protection against inflation and a chance to share in global economic growth. While they'll fluctuate with the market, dividend stocks of attractive companies are thus really a three-fer."
Dividend Aristocrats even go a step further than ordinary dividend stocks because of their lengthy payout history.
But before you dive into investing in these Dividend Aristocrats, the list needs some scrutiny.
Even though all 51 Aristocrats are known for increasing dividends, not all of them make for great investments in today's market.
"All you have to do is figure out which companies are run by sharpies - and are paying dividends out of capital - and which companies have genuinely solid business models that aren't going away," said Hutchinson.
In fact, there's only one of the freshly-minted Aristocrats that you should add to your portfolio right now.
To continue reading, please click here...
-
How to Safely Double Your Dividend Yield With Covered Call Options
As it turns out, despite the summer swoon, income investors were the big winners in 2011.
While the Dow Jones Industrial Average finished the year with a gain of just 5.5%, the 100 highest-yielding stocks tracked by the Dow Jones - as measured by the iShares Dow Jones Select Dividend ETF (NYSE: DVY) - returned a market beating 11.73%.
Of course, the question today is whether or not that performance will carry on in 2012.
However, given the contentious nature of the U.S. presidential race, the ongoing turmoil in the Eurozone and the clouds hanging over the global economy, 2012 is looking like it will provide another great year for dividend investors.
The reason stems from what Martin Hutchinson, editor of the Permanent Wealth Investor, discussed last week in his look at dividend stocks.
"The problem with going for capital growth," Martin points out, "is that you very often don't get it, and then you've got nothing - the investment just sits there."
By contrast, Hutchinson added, "Dividends are easy... All you have to do is figure out which companies have genuinely solid business models that aren't going away."
Options Strategy: Boosting Your Yield With Covered Calls
What's more, if you're willing to put in a little extra time and make use of a proven strategy involving call options, you can safely double, triple, or even quadruple the amount of income you receive from your dividend-paying stocks - even if the share price does absolutely nothing.
The technique is known as "writing covered calls," and implementing the strategy is quite simple.
All you do is sell (or write) one out-of-the-money call option - i.e., one with a strike price higher than the stock's current market price - for each 100 shares of the stock you own (the underlying security).
The call is said to be "covered" because you own the underlying shares. As a result, you don't have to put up any added money or "margin" in order to make the trade.
All of the money you receive for selling the calls - the "option premium" - is yours to keep regardless of what happens to the price of the underlying stock.
This "option premium" is then added to your overall gains, boosting the yield you are set to earn from the dividend.
Here's how it works in practice:
To continue reading, please click here...
-
Four Dividend Stocks to Put Money in Your Pocket
- By Don Miller, Contributing Writer, Money Morning
- January 12, 2012
Anxiety over the European debt crisis and distrust in the markets drove volatility in global stock markets to dizzying heights in 2011. The intense level of chaos, and record low bond yields, sent investors scrambling for stocks that deliver steady returns in the form of dividends.
Dividend stocks have long been regarded as "widow-and-orphan" stocks because they provide steady payouts and tend to fall less than others when times are tough. And when stock prices fall, dividend yields actually rise because they reflect a percentage of a stock's price.
In fact, investors seeking shelter from market volatility and economic cycles flocked to dividend stocks in 2011. And most held up much better than the Standard & Poor's 500 Index.
The top 100 highest-yielding stocks in the S&P 500 last year were up an average of 3.7%, before dividends, The Wall Street Journal reported. By comparison, the 100 lowest-yielding stocks were down 10% on average.
Meanwhile, some investors tapped into dividend yields of more than 4% -- more than double the feeble yields of 10-year Treasuries -- on the stocks of utilities, manufacturers, and telecom companies.
"The problem with going for capital growth is that you very often don't get it, and then you've got nothing - the investment just sits there," said Money Morning Global Investing Strategist and Editor of the Permanent Wealth Investor Martin Hutchinson. "Dividends are easy - you can drop them on your foot, as it were. All you have to do is figure out which companies are run by sharpies - and are paying dividends out of capital - and which companies have genuinely solid business models that aren't going away."
Still, buying dividend stocks can be tricky. Individual stocks are inherently risky because they are confined to one sector of the economy. As such, they tend to rise and fall along with the rest of their industry peers.
Many investors are solving that problem by turning to dividend exchange-traded funds (ETFs).
ETFs allow investors to capture income from a cross section of companies, without risking all of their capital on one sector. And because ETFs track broad categories of stocks rather than relying on active managers to pick securities, they provide some safeguards against loading up on the riskiest companies.
That said, here are four dividend stocks worthy of a look right now:
To continue reading, please click here...
-
Dividend Stocks: How To Profit From The World's Best Investment Protection
Do you know what the ultimate investment protection is?
It's not gold, and it's certainly not Treasuries.
It's dividend stocks.
Companies that pay consistent dividends are in better fiscal shape than the U.S. government, and the payouts significantly outpace those of Treasuries. The advantage over gold of course is that the yellow metal yields nothing - it's simply a store of value.
And yet dividend stocks also protect against inflation, since profits for the companies behind them tend to rise alongside prices.
To understand the advantages dividends can provide an investor during a down market, just look at the implosion of the dot-com bubble in 2000.
-
Four Stocks to Avoid At All Costs
If you're like most investors, you probably spend most of your time searching for the "next" Apple Inc. (Nasdaq: AAPL) or next Google Inc. (Nasdaq: GOOG) - in other words, the next big winner.
But finding winners is only part of the equation.
If you're looking to build real wealth, you need to avoid the really big losers - like the "next" Enron, or next Lehman Brothers Holdings Inc. (PINK: LEHMQ).
Portfolio killers like those are the stocks to avoid at all costs.
Let me explain ...
How to Win By Not Losing
During my years as a global merchant banker, advisor to governments, financial-news editor and trading-service specialist, I've time and again seen the big losses that can result from arrogant executives (Enron), greed-driven strategies (Lehman) and other investments gone wrong.
But what most investors don't understand is that the fallout from these losses reaches far beyond the losses themselves. You see, that's money that can't be deployed into winners.
As one longtime investing adage tells us, if you suffer a 50% loss on a stock, you need that stock to double in price (a gain of 100%) just to get back to even.
And let's be honest: How many times has one of your stocks doubled - after it took that kind of a beating?
There are many strategies you can use to protect yourself from big losses. Just last week, for instance, I showed you how to bolster your portfolio by investing in companies with strong growth prospects and a record of consistent dividend payouts.
I call those companies "Alpha Bulldogs" - and recommend the shares of the strongest performers to subscribers of my Permanent Wealth Investor advisory service.
In last week's report - "Investment Protection: These Dividend Stocks Yield Twice as Much as Treasuries" - I discussed two specific "Alpha Bulldog" stocks: B&G Foods Inc. (NYSE: BGS), and a second whose identity was withheld specifically for the charter subscribersof our newest premium advisory service - Money Morning Private Briefing.
But as I noted above, finding great investments is only half the battle. In the work that I do for my subscribers, I must also avoid big losers.
To continue reading, please click here...
-
Investment Protection: These Dividend Stocks Yield Twice as Much as Treasuries
Do you know what the ultimate investment protection is?
It's not gold, and it's certainly not Treasuries.
It's dividend stocks.
Companies that pay consistent dividends are in better fiscal shape than the U.S. government and the payouts significantly outpace those of Treasuries. The advantage over gold of course is that the yellow metal yields nothing - it's simply a store of value.
And yet dividend stocks also protect against inflation, since profits for the companies behind them tend to rise alongside prices.
To understand the advantages dividends can provide an investor during a down market, just look at the implosion of the dot-com bubble in 2000.
According to Morningstar research, the Standard & Poor's 500 Index lost 9%, while dividend-oriented mutual funds - including high-yielding stocks in the financial-services, mutual-fund and real-estate sectors - gained anywhere from 10% to 30%.
And I shouldn't need to remind you that dividends account for the majority of the stock market's returns.
A study by Yale economist Robert Shiller showed that in the 109 years from 1889 to 1998, the average real return on common stocks was 7%, of which 4.7% was represented by dividends.
While stock prices have been plunging, dividend payments are rising. Through Aug. 31, 243 companies in the Standard and Poor's 500 Index increased or initiated a dividend payment. In fact, dividend payments are expected to end 2011 up 18% from 2010.
That's the case for dividend stocks. Now I'm going to give you some potent investment ideas to help you get on board.
Investing in Dividend Stocks
Generally speaking, there generally are two types of dividend stocks. There are large blue chips, which have a reliable but modest payout. And then there are the obscure companies, which have a higher yield but less safety.
In the first set you'll find companies like
to continue reading, please click here...
