Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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Mining for Excess Cash Yields Investors
Total Returns of +219%
Published:
July 21, 2008
When
searching for stocks that are likely to generate a solid,
dependable income stream, it's easy to be tempted by those
offering rich yields of 10%, 12% or higher. Keep in mind,
though, the dividend payments behind those numbers have to come
from somewhere -- a firm's free cash flows.
Clearly, a company dishing out the vast majority of its excess
cash (say 90% or more) to shareholders has little margin for
error. If business slows and cash flows weaken, then the company
may be forced to trim back its dividends, and there goes the
yield.
Of course, as editor of our
High-Yield Investing newsletter, editor Carla
Pasternak is well aware of all this. In fact, her January 2006
issue was specifically devoted to finding stocks with modest
payout ratios (dividend payments expressed as a percentage of
earnings or cash flows) below 55%.
Even in the event of a slowdown, these companies should still be
able to comfortably meet their dividend obligations without any
interruption. Better still, because they are only paying out
about half their earnings or less, they also have ample room for
future dividend hikes later down the line -- and to raise the
odds, Carla only zeroed in on firms whose annual earnings were
plowing ahead at a +20% or greater pace.
In the end, only six companies met all of these requirements and
several other stringent criteria. At the top of that list was
Southern Copper (NYSE: PCU, $30.07). At the time, the miner
was paying out a generous, but not excessive 55% of its earnings
as dividend distributions. But those quarterly payments still
added up to a hefty yield of 9.4%. And with the firm's profits
having just soared +112% over the prior year, Carla saw a good
chance of dividend hikes in the near future.
Since then, shareholders have raked in over $5.00 per share in
distributions. Meanwhile, the stock itself, after splitting 2-1
in October 2006 and then 3-1 earlier this month, has zoomed from
a split-adjusted price of $11.34 to Friday's close of $30.07 --
for a stunning total return of +219%. In the past year alone,
the company has trounced the S&P 500 by +10% points. And based
on the trailing 12 month total distributions, shareholders can
enjoy a tax-advantaged 7.4% yield.
In
this month's newsletter, Carla has dug up another reliable idea
for investors seeking stable income as well as significant
capital appreciation potential. The closed-end fund starts by
targeting high-yielding blue chip stocks like ExxonMobil (NYSE:
XOM). And to reduce volatility and raise extra income, it also
writes call options against a portion of the portfolio.
For an in-depth profile of this "High-Yield Security of the
Month" for July, we invite you to try out Carla's
High-Yield Investing newsletter. Simply follows
this link to learn more.
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Nathan Slaughter
StreetAuthority Staff Writer
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Investing Doesn't Get Any Easier Than This |
Stock picker Amy
Calistri's strategy is as simple as investing gets -- just one idea
a month designed to make money in today's market. Invest this way
and you don't have to worry about oil prices, automaker bailouts, or
what the Fed is up to -- because every "bad" economic development
actually helps some investment or another.Your investing life can
get a lot simpler -- starting today.
Go here to learn about Amy's simple investing strategy.
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