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Higher Yields = Higher Safety, Too A key reason that dividend-paying investments have clobbered
the competition is because they fare so much better during bear markets.
The Last Free Lunch? I'd never claim that every stock
in your portfolio has to be a high yielder -- but dividend-paying
investments offer the most compelling risk-reward trade-off you can
find. Put Some Security Into Your Securities Every one of the
high-yield opportunities we bring you every month offers the two things
we cherish most: a long history of honest-to-goodness growth (as opposed
to contrived growth engineered by accounting fictions) and a generous
record of dividends. What really counts is that
they simply pay them. Dividends are a sign of financial strength, of
a real business making real profits. Steady Wins the Race
Philip Morris (now renamed "Altria"), which most investors
dismiss as a stodgy -- even boring -- company, is a perfect example of
this phenomenon.
The Investment Thrill Reserved for Income Investors Only As we just saw with Philip Morris, your
dividend check can eventually grow so large that it surpasses the
original price you paid for the stock. The exhilaration of "lapping"
your stock that way is a feeling you never forget. We're Not Allergic to Capital Gains, Either!It's a funny thing about the high-payout companies we dig up in High-Yield
Investing: hold them long enough and before you know it,
you're usually sitting on a nice-sized capital gain as well.
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Tax Savings, Too Everyone wants to minimize
taxes. We show you municipal bond funds and other investments where
every penny of your generous dividend can be TAX-FREE. Keeping Management Honest -- and Getting a Fair Shake Dividends not only require executives to use capital efficiently,
they also send a clear message that management is putting
shareholders first and treating them right by paying them the
profits they deserve as co-owners of the business. The Incredible Disappearing Dividend 2008 was the most brutal year ever for
dividend cuts in the S&P 500. 61 companies eliminated a total of $40.6
billion in distributions. In February GE slashed its distribution by 68%. Wells Fargo followed suit with an 85% cut in March. These are just two examples out of dozens of battered financial firms slashing dividends to save capital. Two years ago, the financial sector accounted for more than 30% of the dividends paid by the S&P 500. Now it's just 10.8%. As the recession eats away at profits, some of the biggest corporate names in the country are cutting dividends -- or eliminating them altogether. Even the so-called dividend aristocrats like Bank of America and Pfizer -- whose dividends were considered untouchable -- have felt the axe. Harder to Find -- But More Important than EverJust as they become an ever-more important part of your total return, dividends are disappearing everywhere you look. No wonder thousands of beleaguered income investors are turning to High-Yield Investing for help. In this wasteland, we're managing to find cash-rich companies that are increasing dividends. Archer-Daniels Midland recently boosted its payout. So did Coca-Cola, Monsanto, Wal-Mart and Kimberly-Clark. And that is crucial. According to Ned Davis Research, firms in the S&P 500 that raised dividends gained an average of 8.8% per year between 1972 and 2008. Those that cut dividends or never paid them produced zero return over the entire span. |
Locking In Fat Annual Stipends for a SongWhat a difference a year makes. For the same
"down payment" that would have secured you just modest income a
year ago, you can now set yourself up with a fat income
stream that could last the rest of your life. |
So it's clear that dividend-paying stocks have crushed the broad market over the decades. And we expect this trend should continue as investors look to dividends to capture some cash flow in a stingy market.
There's another big-picture factor at work here: The oldest Baby Boomers turned 60 in 2006 and are now entering retirement. This means the leading edge of a generation 76 million strong will soon find itself searching for stable, income-producing investments to replace their regular paychecks. This trend will continue for at least another 20 years as the Boomers continue to progress.
Meanwhile, don't forget that the tax code still favors dividends over regular income. Unlike ordinary income, which is taxed up to a rate of 38.6%, you lose only 15% of your dividends to the taxman.
To make sure your dividend is
SAFE, we put cash flow under an analytical microscope. We dig deep to
reveal which yields are treasures and which are traps.
This is vital, because it gives you an early warning if any of your
money is in danger. We're fanatical about digging out bad news.
In a vicious bear market, like this one, our
stocks don't escape scot-free. But they take on a lot less water than
other stocks in a market storm. And the dividends they pay tend to keep
going up, up, up... just as they rose by +16.8% during the absolutely
brutal period of October 2007 to October 2008.
If you're at a point in life where you simply can't afford the damage a
bear market will inflict on your stocks -- or to have your income wiped
out by creeping inflation -- you'll appreciate the peace of mind these
reliable high-payers offer.
Their income streams are rock solid, not the
phony pumped-up payouts that attract so many misguided "yield junkies"
who discover too late that their exorbitant yields are fool's bargains.
Buy them now and they'll shower you with rising income and share prices
over the long haul.
It's Time to Buy this Mortgage REIT Yielding 26.7%
Every month we spotlight a unique income security that offers an irresistible combination of yield and growth. So if you're looking for high dividends with a good shot at a capital gain, you'll love our current "Income Favorite." This stable, diversified REIT borrows money to invest in mortgage-backed securities. Not just any mortgage securities, mind you, but only those whose principal and interest are guaranteed by U.S. government-backed agencies. In the Right Place at the Right TimeThis company is in the perfect sweetspot. It profits from the spread between what it pays to borrow and what it gets on its mortgages. Bank borrowing rates are at 50-year lows and much lower than mortgage rates -- the perfect scenario for a company that profits from the difference between the two. They're playing the game at a higher level than the competition. Any mortgage investor that made it through the subprime mess without a scratch has to be managed by some pretty sharp people. The bottom line is growing so fast that shareholders are raking in a hefty annualized yield of over 20%. The key is their incredibly low borrowing costs. Their investment portfolio yields 5.04% against borrowing costs of just 2.63%. That gives them an unusually profitable spread of 2.41%. (To put that in context, one of the biggest mortgage REITs last year earned an almost identical 5.03% on assets but paid borrowing costs of 4.08% for a spread of just 0.95%.) After successfully navigating through the most tumultuous mortgage market in history, the company is on track to continue its impressive earnings streak and fat payouts. The six analysts who follow it are projecting earnings to rise +50% in the months ahead. Trouncing Competing YieldsLike any REIT, our current pick distributes almost all of its available cash and capital gains to shareholders every year. Not only is this company giving its holders a yearly cash payment averaging 26.7% on every dollar they put into it, but looking ahead, it can also give you a piece of the eventual resurgence in real estate. There's no guarantee, of course, but invest $50,000 now and you're looking at a nice little stipend of $13,350 a year. And that's just in the first year. As long as the dividend payout remains steady, your income will roll in year after year -- and increase as it compounds its assets. By comparison, the 3.9% yield offered by the S&P 500 looks downright puny. Even the Dow Jones Select Dividend Index, with its 7.1% yield, can't hold a candle to this cash cow. And Treasury bonds? Forget it. The 10-year Treasury note currently pays a measly 2.8%. Corporate bonds don't come close either. 10-year "AAA" rated corporate paper yields just 5.9%. Not horrible, but not even in the same ballpark as our pick. It would take more than four years for corporate bonds to pay you what our "Income Favorite" will pay you in the next 12 months. You'd expect a security like this to trade at a steep premium valuation. But this REIT is actually trading at a steep discount to the value of its assets. This gives you a rare chance to purchase a solid portfolio of assets for just 91 cents on the dollar. What Gives This Issue Its "Edge"
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Any knucklehead can generate a
list of high-yielding stocks in about 5 minutes on his or her home
computer. That's no way to find quality investments.
By contrast, we put every stock, bond and mutual fund through a unique
analytical boot camp before we even think about recommending it to you.
We call it our "Dividend Optimizer." This model identifies securities
with key traits of safe and lasting income streams. It then ranks them
from best to worst based on our unique scoring system. No one else has
this proprietary ranking mechanism.
While the inner workings of our rating system are complex, its results
are crystal clear. Your investment life will never be simpler. You supply the start-up capital and High-Yield Investing does the rest.
We'll tell you where to put the money and when and where to move it
around. You won't trade much. Why should we fritter away our money on
commissions, taxes and bid/ask spreads? That's plain dumb. After all,
the biggest profits are always made by the steady momentum of
compounding. We want you to get rich -- not your broker.
That brings us to another point: Brokers rarely push the kind of
investments we specialize in. There's just too little in-and-out action for their tastes. Our picks
are so reliable... so safe... and pay such high dividends that you can buy
'em and lock 'em away for years. You won't want to sell them. And that means zero commission for your broker. So don't expect Wall
Street to advertise their great dividends and fantastic long term
records to you.
At High-Yield Investing,
all we do is help you profit from dependable cash-in-hand securities
that steadily steamroll ahead, compounding their gains into
ever-higher total returns. We report to no one but you. If our
recommendations don't increase your wealth, we know we will lose
your trust and your readership.
And we'd deserve to.
We accept no advertising. Nobody owns us. And we track all of our
recommendations, so you always know how much money we're making for
you.
We have one purpose and one purpose only -- safely making you
wealthy. Without a lot of nail biting and never more than a
thimbleful of risk.
On the contrary, when you try High-Yield Investing, the risk is all
ours. (Try getting your broker to take a risk.) You don't risk a
penny with our 100% money-back guarantee.
Why do we offer such a generous guarantee? Because virtually no one
uses it! They're too happy beating the tar out of the market.
#1) "Dividend Optimizer" Portfolio -- We
use our "Dividend Optimizer" model to find stable, growing companies
yielding at least 5%. We want these stocks, bonds, funds and other
securities to have long track records and strong future prospects.
These are investment ideas that you can count on to deliver
above-average income year-in and year-out.
These stocks are true mattress stuffers -- the kind you can buy and
forget about. We wouldn't be surprised if they throw off dividends
and capital gains of 100% in the next three to five years.
#2) "10%-Plus" Portfolio-- Here's where you'll find some of the highest-yielding investment ideas on the planet. Everything in here offers an annual income stream of 10% or greater. Here's what else we want to see:
a long track record of improving earnings. In general, the
longer a firm has been profitable, the more likely it is to deliver steady returns in the coming years.
a history of consistent and growing dividend payments.
We want to see steadily increasing dividends with no declines or missed payments.
strong cash flows. Since you can't pay dividends without
cash, we need to find companies that are generating above average amounts of cash each and every year.
strong projected growth.
Growing firms are more likely to be able to boost their dividends in the future.
a sustainable payout ratio.
Firms occasionally pay out 100% or more of their earnings to shareholders. They can't do this for long without cutting
their dividend. We avoid firms with unsustainable dividend payouts.
You'll get the full details on every one of the gems our system turns up when you join our service. But first, let's look at one of our very favorite stocks right now...
This dividend machine has
surged +274% in the past five years, and it's still a strong buy.
For starters, this Alaska oil-field play features a CD- crushing
12.8% yield, thanks to a dividend that has risen eightfold over the
past decade.
More important, however, is what's driving that
dividend growth: powerful profit growth. This low-cost, strongly financed and aggressively managed outfit is
a perfect example of the type of lean growth machines we want to
own.
We recommended this stock because we were impressed by its dividend
record. It has made quarterly dividend hikes year after year,
despite volatile oil prices.
As long as strong demand and tight supply keep energy prices high,
this trust will be swimming in cash.
Traded on the NYSE, it has surged more than
25 to 1 since the year
2000. Tell that to anyone who says income investing is for widows
and orphans.
This is exactly the sort of low-risk/high-reward plays we describe
in great detail in Cash Cows: Great Companies With 10%+ Dividend
Yields. For your free copy of this special report, simply
go here to subscribe today.
A Random Sample from Our Two Portfolios... |
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| Business Profile | Dividend Yield | |
| Mortgagor preferred stock | 10.0% |
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| Foreign telecom stock | 10.1% |
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| Global real-estate fund | 16.1% |
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| Lease-finance company | 15.0% |
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| Enhanced Income Security | 19.4% |
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| Food retailer preferred stock | 19.1% |
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| Closed-end fund | 17.9% |
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| Natural gas partnership | 11.6% |
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| Over the decades, stocks have returned 9%-10% a year. You can beat that right out of the gate in dividends alone with many of these high-quality high-yielders. Please understand that in fairness to our paying subscribers we can't fully identify our current recommendations here. | ||
The stocks you'll find in our
free Cash Cows report are not only among the most generous stocks
you can buy, but they're some of the safest, too. You can buy them,
forget about them for years and let them steadily make you wealthy.
They yield up to 17.9% in cold cash... and they're wallowing in
liquidity, which means your fat dividends are secure.
If anything we've said so far
makes sense to you... if you think that we're even half right about
the extraordinary profits and peace of mind that cash-in-hand
securities will bring their owners in the coming years, then we'd
like to send you the most comprehensive source of information you
can get -- our High-Yield Investing advisory letter.
High-Yield Investing is the only periodical devoted exclusively to
helping you make money in every category of income investing.
Nowhere will you find a more thorough ranking of your income
investment options than in this monthly investment bulletin.
You'll be joining a growing brotherhood of like-minded income lovers
who share our love for reliable investment ideas delivering
above-average income and strong capital gains.
One more thing -- it's important: We invest in quality ideas that
sport annual yields of 5%-20% -- NOT in high-yield junk.
And when I say "investment ideas," I mean not only stocks, but also
bonds, mutual funds, preferred stocks, ETFs, royalty trusts,
closed-end funds, Canadian income trusts, etc. We cover every class
of income investment in High-Yield Investing.
You'll find a few asset classes so exotic that you probably never
knew they existed.
Take Canadian Royalty Trusts for example.
Thanks to a unique incorporation structure authorized by the
Canadian government, cash-rich companies are converting themselves
into dividend powerhouses yielding an average of 17.8%.
But there's more to these cash
machines than their fat payouts.
Some of the trusts you'll find in High-Yield Investing
have seen their share prices shoot up, too. One of Canada's
best-known trusts, Vermillion Energy, has shot up 1,840% in
the past five years alone.--and you know how horribly most stocks
have suffered in the past five years.
But please be careful before you venture north to grab these
tempting yields.
Dismayed at all the tax money they were losing out on, the
authorities in Ottawa declared that starting in 2011, trusts would
lose their favored tax treatment.
We wouldn't panic if we were you. Two years is forever in politics and we
wouldn't be surprised if the Canadian authorities reverse course on
this issue, just as they've done three times before.
Second, since the proposal provides a two-year grace period before
existing trusts are taxed, you have a two-year tax holiday to
continue raking in a lucrative income stream.
Bottom line: it's hard to lose if you buy the right trusts now. Trust prices have fallen in the face of uncertainty, giving you a
great entry point and super-sized yields. The actual businesses
underlying these trusts haven't changed a bit.
Remember, the current yields still hold
until 2011. And even if they are taxed in the future, these
companies will still be paying yields that dwarf your options here
in the States. More than 140 Canadian trusts now yield more than
10%, and 49 pay
more than 20%!
We've just released a report on four
extraordinary high-yielding trusts -- all safe for U.S. investors --
that you can get free as a new subscriber.
(Keep reading for details.)
Land Lording for Dummies
There's no easier way to own bricks and mortar than buying a REIT. They let you own skyscrapers, shopping malls and apartment buildings, plus get all the cash flow of a lease -- along with the liquidity of a common stock and an inflation hedge to boot. And owning a REIT eliminates the hassle and legal liabilities of owning individual properties. We're well aware that REITs have hit a rough patch, but getting in cheap now only makes your long-term gains all the better. There is still plenty of high-yielding value here -- IF you specialize in the right properties. Most of our REIT picks are plenty safe enough for conservative investors. Others are better for risk-takers who want explosive gains potential. But they all offer high yields, with some in double-digits. One of our favorites owns a broad mix of 269 hotel properties in 32 states... and has posted steady growth throughout the decade, raising its dividend 19 times since going public in 1995. And its shares are cheap for a REIT of this quality, selling for nine times earnings and just 38% of its book value. Get full details in your free copy of Real Estate You Can Trust.
Canada's Greatest Gift to U.S. Investors For years dismissed by "sophisticated investors" as a provincial backwater of the securities industry, Canadian income trusts have blossomed into the darlings of Wall Street. And it's little wonder. These remarkable cash cows yield five to 10 times more than the average stock... their dividends (unlike those of U.S. trusts) qualify for the low 15% tax rate... they tack on an extra profit if the U.S. dollar continues to drop... and they offer major capital-gains potential to boot. Prices have dipped on the news that trust taxes might rise in four years, creating some jaw-dropping dividend yields. We feature four overlooked gems here that boast yields up to 24.9%.
All four of the picks in your free report trade right here on the NYSE...have delivered above-average returns... and with their superior yields, stable cash flow and outstanding dividend growth, they should continue to treat us well in the years ahead. Get the full story in your free report. |
Speaking of
out-of-the-mainstream income tools, right now we're finding some
sparkling returns in preferred stocks. Choose them well and these
hybrid securities give you the best of both worlds: the steady
income of a bond and the appreciation of a stock.
Like bonds, preferred stocks pay you interest every three months.
And like common stocks, they can also hand you nice capital gains as
the company grows.
But when you buy a preferred stock, you have one huge advantage over
common shareholders...
When a company runs into tough times and cuts or cancels the
dividend, it's tough luck for common stockholders. But when a
preferred stock suspends payment, your payments accumulate on the
ledgers and are paid in full when the company recovers.
If you want an even higher level of safety, we'll introduce you to
something called an "adjustable rate" preferred security. As its
name implies, it adjusts its yield in tandem with interest rate
changes, which means your principal remains steady even if rates
rise. If rates go up, so does your payout.
The only thing you miss out on is the heartburn other income
investors are suffering as rates rise.
With the S&P 500 yielding 3.9%
and CDs paying about 2%, you will never get the income you need to
live and retire comfortably from the mainstream asset pools most
investors swim in. Especially with inflation chopping your
return off at the knees.
By contrast, we have an entire portfolio of investment ideas that
will pay you an annual cash income above 10% a year. And that's
before we even talk about capital gains.
So what do you say? Are you ready to put a little capital in Wall
Street's overlooked millionaire makers?
I'll make it very easy for you to get started. First, I'll send you
the free Special Report I mentioned earlier called Cash Cows: Great
Companies with 10%+ Dividend Yields that describes in full detail
the mouthwatering opportunities I've mentioned in this article.
My new report shows you how you can get safe yields of up to 17.9%
right now... and possibly double or triple your money within two
years.
I'll send you this breakthrough report FREE when you take a trial
look at the service that brings these tireless wealth-builders to
your door every month: High-Yield Investing.
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If you're ready to use High-Yield Investing to safely accumulate serious, lasting wealth, you're in luck. Because as a special introductory offer, you can get a full three months of this one-of-a-kind resource for only $39.50. And don't forget the special reports that I'll send you free.
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To start receiving
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Please don't delay. Every day
that your money languishes in a low interest CD or money-market fund
-- or remains nakedly vulnerable in crash-prone stocks -- is another
day you're missing out on the safe, high yields and stress-free
capital gains our high-yield cash cows offer.
If you want to put your money to work in a tireless investment that
will never stop paying you back, please join us today in this
"push-button" money maker -- all you need is a subscription to
High-Yield Investing, a brokerage account and a mailbox to pick
up your dividend checks in.
With best wishes for safe profits,
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Carla Pasternak Co-Editor High-Yield Investing |
![]() Paul Tracy Co-Editor Chief Investment Officer High-Yield Investing |
P.S. Remember, you save more and get more with a two-year subscription! Join us for a double term and save a full $79 off the regular price... plus get three additional free investment reports: Northern Beauties: Four Great Canadian Trusts for Yield and Gains, Real Estate You Can Trust: Three High-Yielding REITs with Recession-Proof Dividends and Best Utilities You Can Buy Now.
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Meet the Co-Editors of High-Yield Investing |
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Carla Pasternak draws on a variety of financial backgrounds to make profitable calls on income-generating stocks for her readers. With more than two decades of investment-industry experience, Carla has written for several nationally recognized financial publishers, and has also been president of a respected investor relations firm. A highly successful analyst in the high-yield arena, she focuses not only on dividends, but also on long-term capital gains. On the educational front, Carla holds both MBA and PhD degrees. When she's not watching the market, she's teaching college business courses and managing million dollar portfolios. |
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Before co-founding StreetAuthority.com, Paul Tracy was managing editor at a multi-million-dollar financial publishing firm. In addition to his role as managing editor and lead financial writer, he was also responsible for equity research and managing a team of seasoned professional financial writers, researchers and market commentators. Earlier, Paul held positions at Robert W. Baird and Co.'s full-service brokerage operations. His research has been funded by the National Bureau of Economic Research. He has appeared on several prominent financial radio shows, and has been a featured speaker at various investment conferences across the U.S. |
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