JNJ is an absolute dividend powerhouse having increased its dividend for more than 50 years straight. However, the company faces new and increased uncertainty risk in light of a Republican House, Senate and President-elect that seem determined to repeal the Affordable Care Act (ACA). In addition to its attractive growing dividend payment, significant long-term capital appreciation potential, and reduced risk via its large and diverse revenue base, we believe JNJ could eventually benefit from reduced regulatory burden under a modified ACA, but is now the right time to buy?
Post-Election Investment Opportunities
Following Tuesday’s election results, the market reacted significantly. The “Blue Chip” Dow Jones Industrials Average had its best week in 5-years (+5.4%) as investors bought industrials and banks assuming they’ll benefit from more spending, less regulations, and increased inflation under Trump. In this week’s Weekly, we provide some age-old “boring” yet sage advice on how to prepare for the next market shock, as well as three specific investment ideas that we consider attractive right now.
IBM: Has Big Blue Lost Its Way? Or Not?
IBM offers an attractive (3.5%) dividend yield, but the dividend alone is not enough if the stock can’t provide some long-term capital appreciation. In this article, we review IBM’s shrinking legacy business, its attempt at growth via “strategic imperatives,” its dividend, share buybacks, valuation, and risks. And we also provide our strong views on whether it’s time to buy or sell Big Blue.
Our Two Favorite Big-Dividend BDCs
This week’s Weekly covers our two favorite big-dividend Business Development Companies (BDCs). They yield 13% and 10%, respectively. And we own both of them in our Blue Harbinger Income Equity portfolio. They’ve both sold off modestly over the last two months as higher yielding equities in general have sold off, thereby creating a more attractive entry point for long-term income-hungry investors.
Five Attractive Long-Term Opportunities
This week’s Weekly highlights five attractive long-term investment opportunities. Specifically, we review market sector ETFs, geographic regions, and individual stocks, and then point out five that are flashing buy signals. As Ben Graham says, the market is a voting machine in the short-term, but a weighing machine in the long-term.
Triangle Capital: Amazing Dividend or Dangerous Trap?
Triangle Capital is a Business Development Company (BDC) with an enormous 9.3% dividend yield. The share price has barely budged this year starting out at $19.11 and currently sitting at $19.32. However, the company cut its regular quarterly dividend by $0.09 per share back in May. The big question for income-focused investors: Is this amazing 9.3% dividend yield safe, or is it a dangerous trap to avoid?
Omega Healthcare: Big Dividend, Big Evolving Risks
Omega Healthcare (OHI) pays a big growing dividend (7.2%), and it has recently underperformed many of its healthcare REIT peers. Some investors are quick to sing its praises as a “value play,” but it is most certainly exposed to very real risks. Specifically, the evolving skilled nursing facilities industry calls into question the source of Omega’s future revenues particularly with regards to entitlement reform. This article provides our views on Omega, and addresses the all-important question: Is Omega worth the risk?
Upcoming Dividend Payments: Blue Harbinger Income Equity
Just a quick note (and some data) on the upcoming dividend payments in the Blue Harbinger Income Equity Strategy. Keep in mind, the current yield on this strategy is impressive at 4.5%. However it's the total return (dividends plus price appreciation) that we believe makes this strategy so attractive (it's already up over 21% since its launch in January, and it's beating the S&P 500 handily)...
Top 5 Big-Dividend REITs Worth Considering
This week's weekly is a continuation of our free report "Top 10 Big Dividend REITs Worth Considering" except in this members-only edition, we include all the details for the Top 5. We also provide updates on two of our existing REIT holdings (which happen to also be ranked in the Top 5).
New Residential: Huge Profits as Banks De-Risk—But is it Safe?
If you like big dividends and discounted prices, you may have noticed that mortgage REIT New Residential (NRZ) pays an enormous 13.5% dividend and its shares have declined nearly 8% in the last two months. NRZ emerged following the financial crisis as banks had to shed risk. NRZ continues to generate big profits with its mortgage servicing rights business, its heavy use of leverage, and its expanding call rights securities strategy. But the big question… is it safe?
EastGroup Properties: Is This 3.6% Dividend Yield REIT Safe?
Year-to-Date Heat Map and Outlook
This week’s Weekly reviews our detailed heat map displaying what has been working and what has NOT been working so far this year. Specifically, we look at the best and worst by sector, style, the Dow Jones stocks, and many more. We believe there is a tendency for mean reversion in the market whereby what has been working best may not deliver the best returns going forward, and vice-versa. For example, small cap value, real estate and several of the worst performing stocks in the Dow may be poised for future outperformance.
Prospect Capital: Is it Still Safe?
Given the very strong price appreciation this year (PSEC was trading at $5.21 in February, and it now trades at $8.10), we review the question "Is it still safe to own Prospect Capital?" We consider the business, the big 12.4% dividend, the dividend coverage ratio, the financial strength, price vs. NAV, and the biggest risk that we believe could potentially drive the price much lower (as we saw in the first two months of this year).
When to Let Your Winners Run!
This chart shows the returns on the 10 stocks and 3 ETFs we purchased in our Income Equity strategy on January 8th of this year (the names are reserved for members-only). The only other trades we've done this year in the Income Equity strategy were on May 6th when we purchased 6 additional stocks which have also performed very well. This week’s Weekly provides our view on when to take profits versus when to let your winners run!
Top 5 Attractive Equity Options for Income Investors
Smart Contributions & Distributions, Plus An Attractive Dividend Growth Stock
Investors generally go through multiple phases during their investment life cycle, including the contribution phase and the distribution phase. This week’s Blue Harbinger Weekly reviews a couple smart strategies for each of these two important investment phases. And we also provide an update on an attractive dividend growth stock that is flashing a buy signal right now (and yes, we own it).
Accenture: Growing Dividend, Attractive Valuation
Accenture is a management consulting, technology and outsourcing services company that offers a growing dividend (currently a 2% dividend yield), and an attractive valuation indicating significant price appreciation potential. The shares have fallen over 5% in the last two weeks making for a more attractive buying opportunity for long-term investors. We own shares of Accenture in our Blue Harbinger Disciplined Growth Strategy.
Our Top 6 High Yield REITs After Friday's Selloff
Beware the Bear: How Much Cash Should You Hold?
Friday’s big 2.5% decline in the S&P 500 has left many investors nervous. After all, it wasn’t that long ago that the market sold off 10% to start 2016. And investors still remember late 2007 to early 2009 when stocks lost more than 50% of their value. In this week’s Weekly we discuss the merits of “moving to cash” in order to avoid the risk. We also review this week’s new investment idea, a big dividend mortgage REIT that benefits from more market turmoil.
Starwood Property Trust: Big Dividend, Thrives In Turmoil
Starwood Property Trust (STWD) is a big dividend (8.6%) mortgage REIT that could actually benefit from an uptick in market turmoil. Further, we believe Starwood inappropriately sold off on Friday (it was down more than 3%) because it was incorrectly lumped in with other big-dividend payers that sold off when the Fed suggested it may raise rates sooner than expected.