Two dividend cuts in the last two quarters, and we are buying.

Wait. What?

When do we ever chase one dividend cut, let alone two? Let me tell you when, my fellow contrarian!

A Terrible Divvie Trend and We’re In?

Let’s start with the fantastic yield. At 15.3%, FS KKR Capital Corp (FSK) has our attention. That doesn’t mean buy—we don’t chase headline yields around here without doing our homework. But in this case, management is redirecting the money saved from these cuts into share buybacks. 

Which means we’ll likely see price appreciation as shares move closer to fair value.… Read more

Last week’s hot inflation reports have handed us a timely “two-step” 10.3% dividend opportunity. We’re going to jump on it today.

Here’s our plan:

• Step 1: We grab a 10.3% average dividend now, to fend off rising inflation, then …
• Step 2: We ride along as interest rates fall, driving up the value of the two funds behind that steady 10.3% divvie.

I know, I know. How can I be talking about falling rates at a time like this?

The Strait of Hormuz is closed. Oil is at $100. And last week saw two hot inflation reports: CPI hit 3.8% in April, and the PPI (producer price index) soared 6%.… Read more

Stocks are up, and the media is finally coming around to what we’ve been saying at my CEF Insider service for months now.

Last week, The Economist wrote a breathless piece about how the US economy is firing on all cylinders—and fears that a recession will sideswipe stocks are just plain wrong.

We’re happy to see a leading publication like The Economist come around on this point, of course. Even better, we now we have the data to prove it:

Across the board, the S&P 500 saw a 27.7% earnings gain in the first quarter. That’s shocking when, historically, profits have risen in the 5% to 8% range.… Read more

Let’s capitalize on analyst incompetence—and bank yields up to 18.3%, with upside to boot!

A widely cited academic study on analyst target price accuracy found that only about 54% of 12-month price targets correctly predicted even the direction of the subsequent price move.

Fifty-four percent. On direction alone. That’s barely better than a coin flip!

Analysts give specific price targets to stocks like they are scripture. In reality, they don’t even know if the thing is going to move up or down.

And it gets uglier. A 2024 Yale School of Management study found that analysts systematically delay downgrading stocks after bad news—to curry favor with the companies they cover.… Read more

If you ask the average investor what, say, an ETF is, you’ll likely get a good answer. A closed-end fund (CEF)? Likely a blank stare.

That’s because CEFs are a tiny corner of the market, with only about $300 billion in assets among them. ETFs? About $13.5 trillion. The scale is way out of whack here.

At CEF Insider, of course, we like it this way. It’s why “Insider” is in the service’s title.

Since CEFs are obscure, we can easily find overlooked ones trading at big discounts to net asset value (NAV, or the value of their underlying portfolios).… Read more

“Merci beaucoup,” your dividend strategist said as he handed three suitcases to his to-the-Paris-airport Uber driver. (I was very proud of myself. Eight days and basically Parisian…)

“Francais?” the driver called my bluff.

“Ah no,” I admitted, hands up, waving off the offer. “She does!” I quickly scapegoated my wife. Who, to her credit, speaks French reasonably well. But the driver was flying with his urgent ask.

Fortunately for phones. She didn’t know what he was asking either, but his phone was translating into English in real time:

There is a bug in my application. Can we cancel the ride?

Then he punched a number into a calculator.… Read more

Stocks are surging—but they’re also developing a case of “bad breadth.” That is, most of the gains are coming from a small slice of the market (I’m looking at you, tech).

That’s good news for us contrarians because this shift has left us some sweet dividend deals in other corners of the market. We’re going to capitalize through 3 discounted closed-end funds (CEFs) yielding up to 11.8%.

Together, they form a tidy “mini-portfolio” that includes blue chips (sans tech), bonds and infrastructure plays. Two of these funds offer payouts that roll out monthly, too.

Start With Stocks—and the Gabelli Equity Trust (GAB)

GAB stands out for another reason beyond its hefty 10.6% payout: It’s one of the few US-stock-focused CEFs whose top-10 holdings aren’t heavily weighted toward tech.… Read more

Investors are flipping back into buy mode, which has been a boon to the equity funds we hold at my CEF Insider service—especially on the tech side.

Our position in the BlackRock Technology and Private Equity Term Trust (BTX) is a good example. We bought this closed-end fund (CEF) in late February—the day before the Iran conflict started—and it’s already returned around 25% for us as of this writing.

BTX Pops On Our Latest Recommendation

This monthly payer has only issued one dividend in that time! When we bought, it yielded around 9.5%. That’s down to 7.7%, as current yields move down as prices rise.… Read more

All-time highs are usually the wrong place to shop for stocks. Prices climb, yields drop, and the only deals left are in junk that nobody wants for good reason.

Right now, though, we have seven cheap, high-yielding dividend stocks available in an otherwise rich market. And these blue-light specials pay. I’m talking about seven dividends yielding 5.2% to 10.3% as I write.

Let’s start with automaker Ford (F, 5.2% yield), an American automotive pioneer and its F-Series has been the country’s best-selling truck for more than four decades. It’s also a perpetually cheap stock, almost always trading at a fraction of the consumer discretionary sector’s average P/E.… Read more

There’s a big disconnect between the headlines and vanilla investors’ mood these days.

The headlines? Dark. Investors? Greedy.

Source: CNN

The CNN Fear & Greed Index has its flaws, but on the whole is a decent indicator of where investors’ heads are. As we can see here, despite the Iran conflict, they’re giddy.

At times like these, it pays for us contrarians to be cautious.

For us closed-end fund (CEF) investors, however, this isn’t a big concern. The funds in our CEF Insider portfolio (21 in all, with an average current yield of 7.9%) are run by pros we can count on to navigate overly exuberant times like this.… Read more