And so what if they’re right for once? In a moment we’ll discuss the safest dividends for a serious pullback.
First, let me calm you down and add that a 2008 rerun is not our most likely scenario. As generals tend to fight the last war, investors tend to fear the last bear market. The next bear is likely to have its own unique “charm” – causes and effects – and we’d like to figure out that flavor ahead of time.
If there’s more to this pullback than we’ve seen, then its affinity for utility stocks is worth noting. The S&P 500 made its recent high on September 20, but don’t tell that to the “utes” which are finally getting up off the mat:
This Bear’s Favorite Buy: Utilities?
I’ve been down on the utility sector for two years now and have specifically picked on blue chips Duke Energy (DUK)and Southern Company (SO) repeatedly. I don’t have anything against these firms, but I also don’t recommend buying them when their stocks are pricey and their yields are low, as they are today.
The problem with “dividend desperation” – paying too high a price for too low a yield – is that you end up collecting your payout but losing as much or more in price when the stock’s multiple contracts to its usual levels. And that’s exactly what’s played out with DUK and SO. Their price-to-earnings (P/E) ratios have contracted by 5% and 6% respectively as investors pay less for the same dividend. This has resulted in total returns of… not much:
Our Utility Pans Treaded Water
Is this recent “divergence” between these two large utilities and the broader market a significant tell? Perhaps, but neither stock interests me yet because both are still pricey. Their current P/Es, still around 20, are higher than they’ve been over much of the past decade. And their yields, at 4.4% and 5.3% respectively for DUK and SO, aren’t yet high enough to qualify for our 8% No Withdrawal Portfolio.
Fortunately we don’t have to settle for these pedestrian utility yields or their expensive stock prices. We can run these stocks through my Dividend Conversion Machine to double their yields to 8%, 9% and more – without adding any additional risk!
A Dividend Party Like It’s 2009
Nobody wants a repeat of 2008, but everyone wants another chance at 2009! Unfortunately most investors were too scared then to take advantage of once-in-a-lifetime yields. Our two utilities, for example, were paying their highest levels in years:
Generous Dividend Yields – For a Moment
More dividends for your dollar. Such were the “good times” that income investors could have enjoyed in 2009:
An Income Investor’s Paradise
Why am I living in the past and telling you this now? Isn’t this an opportunity resigned to history forever? Fortunately NO – I’ve actually found a secret way for you to “force” blue chip names just like these to pay you massive, 2009-style dividend yields today.
Just Released: How to “Force” a 7.5% Dividend From Duke Energy
I’ve found 4 mysterious “Dividend Conversion Machines” that let you rewind the clock: buy stocks like Duke, but instead of grabbing today’s 4.4% dividend, you’ll get the same incredible 7.5% CASH payout folks who bought in 2009 bagged instead!
But there’s a vital difference: you won’t have to take a stomach-churning plunge to get it, like you would have back then.
Sure, handy slogans like “Buy when there’s blood in the streets” are easy to say. But actually overcoming fear and hitting the buy button at a time like that is almost impossible for most people.
But with these 4 amazing “Dividend Conversion Machines,” you’ll grab the same massive dividend yields the best blue chips were paying in that fleeting moment back in 2009 right now–TODAY.
And these life-changing payouts are safe, backed by these very same household-name stocks.
Massive Upside and 7.5% to 8%+ Dividends–in 1 Buy
What’s more, you can grab these lofty payouts whenever you’re ready: all at once, on an automatic yearly or monthly schedule … or simply whenever you have new money to invest.
It’s all up to you!
Best of all, each of these 4 incredible investments are about to explode and give us massive price upside, too.
I’m talking 20%+ yearly price gains, on top of dividends of 8%, 10% and up–without having to buy in the middle of a meltdown, like our 2009 buyers did.
Just days ago, I released the whole incredible story on these 4 Dividend Conversion Machines to the public for the first time, including their names, ticker symbols, exactly how they work and how you can buy (hint: you can grab these 4 incredible Dividend Conversion Machine straight from your brokerage account.)
The Vanguard High Dividend Yield ETF (VYM) was unchanged in premarket trading Thursday. Year-to-date, VYM has declined -3.91%, versus a -0.18% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Contrarian Outlook.