Autoliv (the world's largest automotive safety supplier) was down 8.5% on Friday after announcing disappointing earnings. However, the company is still very profitable, it has vast growth potential, and its shares are undervalued by the market in our view. Additionally, the company’s dividend yield just rose to 2.23% which is above average compared to the S&P 500’s dividend yield of only 2.04%.
Phillips 66: Big Dividend, Attractive Long-Term Opportunity
Phillips 66 has recently under-performed the market because investors are too focused on the short-term crack spread impacts, rather than on the long-term growth into chemicals and midstream businesses. It is also a cash generation machine with a big growing dividend. Warren Buffett recently increased his ownership to nearly 15%. It announces earnings this Friday (7/29). We own it in our Income Equity strategy.
Big Yield Roadmap: The Ones We Actually Own
This week’s Weekly is a continuation of our public report titled Big Yield Roadmap. However, in this members-only version we provide specific details on stocks we actually own in each of the big dividend categories (so far, we haven’t mentioned any of these stocks publicly). We also provide information on additional big-dividend stocks that are on our members-only watch list. Lastly, this week’s new investment idea is a deep dive into one of the healthcare REITs we have been considering.
Ventas: Adding this Big Dividend REIT to our Watch List
Ventas (VTR) is a healthcare REIT with a diversified investment portfolio, an attractive dividend yield (4.1%), and the winds of an enormous demographic trend at its back. The dividend is very safe, and despite the recent strong price performance we believe this REIT has many years of continued growth ahead.
Why this Nice Dividend, Engineering Company, Could Rise 70%
Did you make the same investment mistake as so many others? As the S&P 500 sits just a feather below its all-time high, did you miss the rally because you got scared and sold your stocks as soon as the Brexit news hit two weeks ago? This week’s Weekly provides a brief reminder on the importance of sticking to your long-term strategy. And we also review our latest new investment idea: a profitable, high-margin, growing, industrial engineering company that pays a big dividend and trades at a very attractive price.
TE Connectivity: Big Dividend, Attractive Price
TE Connectivity is a profitable, high-margin, growing, industrial engineering company that pays a big dividend and the stock trades at an attractive price. Further, the stock still has not recovered from the recent Brexit-induced volatility relative to the rest of the market. We don't currently own shares in any of of Blue Harbinger strategies, but we've placed it high on our "watch list."
Our Top 3 Big Bank Ideas: Impressive Dividends, Price Appreciation Potential
Many dividend investors are overlooking these three obvious opportunities. It’s time to acknowledge the financial crisis is in the rear view mirror for some banks. In particular, we highlight three big bank stocks that have big growing dividends, very low risk, and the potential for very big price appreciation. We own two of them, and we’re considering purchasing the third.
M&T Bank: A Big Growing Dividend with Shrinking Risks and Lots of Price Appreciation Potential
Top 3 Big-Dividend REITS Worth Considering
Friday's Brexit induced market volatility caused many of the high-yield REITs to show their true colors. Many of the safest ones actually gained on Friday acting as a "safe haven" as the rest of the market sold off. This week's Blue Harbinger Weekly is a continuation of our free report titled "Seven Big-Dividend REITs Worth Considering." Specifically, we provide all the details (and full reports) for our Top 3 REITs. And our new Investment Idea this week happens to be an attractive high-yield REIT included in the Top 3.
Chatham Lodging: An Undervalued Big-Monthly-Dividend Hotel REIT
Chatham Lodging Trust (CLDT) is a hotel Real Estate Investment Trust (REIT) with a big 6.1% dividend yield, and significant price appreciation potential. The market has dramatically overreacted to slowing growth among hotel REITS, and Chatham in particular offers an attractive investment opportunity for long-term income-focused investors because of its attractive valuation and potential for more dividend increases.
A Tale of Four Stocks: There Will Be Winners and Losers
This week we review four stocks. First we review one of our stalwart blue chip holdings that is currently trading at a discounted price thereby providing an attractive entry point for long-term investors. Next, we provide a checkup on an attractive small cap growth company we own that provides cloud-based payroll processing services, and has the potential to easily double in price and/or get bought out at an attractive premium. And finally, we provide some additional insights on Yahoo and how the stock price of its eventual acquirer could first fall and then rise significantly.
Why American Express Could Rise 30%
The bad news for American Express over the last 18 months has been large and steady. And so too has the share price decline. We believe the bad news is now in the rear view mirror (knock on wood), there is good reason to be optimistic, and the shares could easily rise 30%. We own shares in our Blue Harbinger Disciplined Growth portfolio.
Part 2: 50 High Yield Investments Down Big Friday: These Five Are Worth Considering.
This past Friday (6/10) was not a good day for high yield stocks as the market was in a risk-off mood. For example, the following table highlights the large 1-day declines of fifty stocks that currently yield over 5%. However, we believe five of the companies, in particular, offer attractive investment opportunities for income-seeking investors.
Vanguard Bond ETF (BND) - Thesis
Vanguard Bond ETF (BND)
Rating: BUY
Objective: Steady Returns, Low Volatility, Diversification
The Vanguard Total Bond Market ETF (ticker symbol: BND) is a great way to add low risk diversification to a long-term investment portfolio while simultaneously earning relatively attractive low-risk interest payments (currently 2.06%). This ETF holds over 8,000 bonds (so you get plenty of diversification) and they’re all high quality (investment grade). The ETF is managed by Vanguard (a very trusted name in the industry), so it charges an extremely low management fee, only 0.06%. For perspective a typical bond fund charges 0.82% (according to Vanguard) and this difference really adds up over time. This ETF is appropriate for medium- to long-term investors, and we really like it because it is a fantastic complement to the stock ETFs within our Blue Harbinger Smart Beta strategy.
Traditionally, as a base case, many long-term investment portfolio start with a mix of 60% stocks (equities) and 40% bonds (fixed income). And then they increase the allocation to stocks if they can handle more volatility in exchange for higher long-term expected returns. Or they increase the allocation to bonds if they want less risk (albeit with lower long-term expected returns). We have allocated 20% of our Blue Harbinger Smart Beta strategy to bonds (via this Vanguard Bond ETF), which may be considered slightly higher risk compared to a more traditional 60% stocks / 40% bonds portfolio. However, with the long-term investment horizon of the Smart Beta strategy, we’re comfortable with the risk and higher long-term expected returns.
This is an ETF (BND) that can be held for a very long time (as long as nothing goes wrong with Vanguard, the company that manages it). We trust Vanguard, we love the low fees, and we believe this is a great way to gain broadly diversified expose to the high-quality bond market.
Railroads, Bonds and Utilities Stocks
This week’s Blue Harbinger Weekly covers three exciting topics. First we discuss a railroad stock that we really like a lot right now (and yes, we own shares, and no, it's not the BNSF shown in the picture). Next, we review the new fixed income purchase in our “Smart Beta” strategy, and why we believe it’s a very intelligent way to play bonds. And finally, we discuss our plan of action for our utility stock holding which is already up over 30% this year.
Union Pacific: Back on Track with Room to Run
After suffering significant stock price declines from over $120 per share in early 2015, to around $67 in January 2016, we believe Union Pacific is back on track, and it has significant upside price potential ahead. The market is overly pessimistic, the market cycle is slowly beginning to turn, and the dividend (2.5%) is attractive. If you are a long-term investor, Union Pacific is worth considering. We own it.
AstraZeneca: Big Dividend, Big Long-Term Prospects
We are contrarians with regards to AstraZeneca. Whereas the market consensus is becoming increasingly negative (the stock is down 12.4% this year while the S&P 500 is up 2.7%), we believe the patent loss fears are overdone, and the market is not recognizing the dramatic long-term potential of the AstraZeneca pipeline. If you are a diversified long-term income-focused investor, AstraZeneca is worth considering.
Top 10 HIgh-Yield Investments
In a continuation of our free report "20 Big Yield Investments Worth Considering," this week's members-only Blue Harbinger Weekly reviews the top 10. We provide detailed reports for each, and we do currently own five of the top ten companies. And on a completely separate note, you may have noticed that we updated performance through May, and we continue to outperform the market in each of our three separate strategies. Without further ado, here are the Top 10 Big Yield Investments Worth Considering...
OneBeacon: 10 Reasons to Own this Big Yielder
OneBeacon (OB) is a boring, low beta, low volatility, property & casualty insurance company that offers a big safe dividend yield (6.4%). Because of the nature of its business, it is a great diversifying “widows and orphans” stock, and it that can be very valuable within the constructs of a diversified, income-focused investment portfolio. The stock is down 8.5% in the last year while the S&P 500 is essentially flat over the same time period, thus creating a more attractive entry point for long-term, income-hungry investors.
CenturyLink: Big Dividend (7.9%), Attractive Price
CenturyLink is a big dividend (7.9%) telecom stock that is trading at an attractive price. The stock has been beat up over the last month (Mr. Market didn’t like earnings) and over the last several years (it cut its dividend in 2013, and market volatility has increased). We believe the market is overly negative on this stock, and now is a compelling time to add shares because the price is down, the valuation is attractive, and the dividend yield is outstanding.