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High Yield Dividend Income Investing Is Not as Easy as Chasing the Highest Yield

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Dear members: — The skills to successfully invest for long-term capital gains or long-term dividend growth are much different than those required for generating high yield dividend income. Income investing is a much different proposition. However, the skills do center on a similar equity evaluation process, but one that requires an acknowledgement and heightened awareness of considerably greater downside risks. Income investing, or high yield dividend income investing, should at times be considered among the riskiest forms of investing, as many high dividend-yielding securities tend to trade closer to the characteristics of junk-rated bonds than they do most net cash rich and free cash flow generating powerhouses that we like so much in the Best Ideas Newsletter portfolio (1) and Dividend Growth … Read more

ICYMI: Let’s Play Devil’s Advocate: What’s the Bear Case for Realty Income?

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By Brian Nelson, CFA We like Realty Income Corp. (O) a lot, but it’s not hard to see that the REIT could potentially have all the makings of a black swan. For one, the stock is loved by almost everyone–REIT investors, income investors, and dividend growth investors alike. Many are simply enamored by its monthly dividend, which it has raised nearly 120 times since it was listed on the NYSE in 1994. Over its 54-year history, the REIT has paid 632 consecutive monthly dividends, too. There’s a ton of things to like about Realty Income, but for this note, let’s build and examine the bear case, one that can be broken into three pillars: 1) its retail exposure, 2) its … Read more

Why Are the Dividends of REITs So Risky?

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By Brian Nelson, CFA Not all REIT dividends are safe. Many REITs remain capital-market dependent, and some office REITs, retail REITs, and healthcare REITs may be difficult places to generate dependable long-term income in the coming decades, in our view. Office REIT SL Green (SLG) recently cut its payout 13% on December 5, 2022, while another office REIT Vornado Realty Trust (VNO) cut its dividend 29% on January 18, 2023. These are just two of the latest high-profile REIT dividend cuts, and there may be more to come. Contrary to popular opinion, the REIT sector has not been a great source of dependable, reliable income, particularly during the COVID-19 crisis. Five REITs cut their dividends in 2019: Medalist Diversified REIT … Read more

REITs May Continue to Face Pressure

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Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Brian Nelson, CFA Times are tough for equity REITs (VNQ) and mortgage REITs (REM), with the VNQ and REM down 25% and 30%, respectively, so far in 2022. This is against a backdrop of Valuentum’s simulated Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio that are doing far better. The lesson in 2022, … Read more

High-Yielding Digital Realty Is Committed to Rewarding Income Seeking Investors

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Image Shown: Digital Realty Trust Inc continues to secure new leases which supports its growth outlook. Image Source: Digital Realty Trust Inc – Second Quarter of 2022 Earnings Press Release By Callum Turcan Data center real estate investment trusts (‘REITs’) are a great source of income with ample growth opportunities given the secular tailwinds underpinning data demand growth. The proliferation of cloud computing, the Internet of Things (‘IoT’) trend, the rise of autonomous automobiles, households that previously did not have access to the Internet gaining access (particularly in sub-Saharan Africa and South Asian), the rollout of 5G wireless services, and other factors are all driving up data demand around the world. In turn, that makes it easier for data center … Read more

Dividend Increases/Decreases for the Week Ending February 24

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Below we provide a list of firms that raised/lowered their dividends during the week ending February 24. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Albemarie (ALB): now $0.32 per share quarterly dividend, was $0.305. AllianceBernstein (AB): now $0.67 per share quarterly dividend, was $0.45. Ares Management (ARES): now $0.28 per share quarterly dividend, was $0.20. Argo Group (AGII): now $0.27 per share quarterly dividend, was $0.22. Assured Guaranty (AGO): now $0.1425 per share quarterly dividend, was $0.13. Autoliv (ALV): now $0.60 per share quarterly dividend, was $0.58. Bank of Hawaii … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Dividend Increases/Decreases for the Week August 6

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Below we provide a list of firms that raised their dividends during the week ending August 6. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week AllianceBernstein (AB): now $0.91 per share quarterly dividend, was $0.81. Altabancorp (ALTA): now $0.17 per share quarterly dividend, was $0.15. APA (APA): now $1.50 per share special dividend, was $0.025. Banco Santander (Brasil) S.A. (BSBR): now $0.145 per share dividend, was $0.135. Barings BDC (BBDC): now $0.21 per share quarterly dividend, was $0.20. Berry (BRY): now $0.06 per share quarterly dividend, was $0.04. BG Staffing (BGSF): … Read more

Dividend Increases/Decreases for the Week February 25

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Below we provide a list of firms that raised their dividends during the week ending February 25. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Aaron’s (AAN): now $0.1125 per share quarterly dividend, was $0.1000.           Agnico Eagle (AEM): now $0.40 per share quarterly dividend, was $0.35. Albemarle (ALB): now $0.395 per share quarterly dividend, was $0.390. Alexander & Baldwin (ALEX): now $0.19 per share quarterly dividend, was $0.18. Allison Transmission Holdings (ALSN): now $0.21 per share quarterly dividend, was $0.19. AMERISAFE (AMSF): now $0.31 per share quarterly dividend, was $0.29. Apple … Read more

Dividend Increases/Decreases for the Week of November 15

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Below we provide a list of firms that raised their dividends during the week ending November 15. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          Aker BP ASA (AKRBY): now $0.3003 per share quarterly dividend, was $0.1752. Amkor Technology (AMKR): now $0.0827 per share quarterly dividend, was $0.0788. ArcelorMittal S.A. (AMSYF): now $0.25 per share semi-annual dividend, was $0.22. Australia and New Zealand Banking (ANZGY): now $0.5487 per share semi-annual dividend, was $0.2635. Autoliv (ALV): now $0.70 per share quarterly dividend, was $0.68. Equity Commonwealth (EQC): now $19.00 per … Read more