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    Three Dividend Stocks to Steer Clear Of

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    Editorial Staff
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    Don’t be fooled by these dividend traps.

    Investing in dividend-paying stocks can be a great way to generate predictable returns during times of uncertainty. But just like with any category of stocks, there are some dividend stocks to steer clear of. Some dividend stocks are at high risk of reducing/ suspending their payouts, while others have downside risks that outweigh their respective payouts.  

    Simply put, there are many dividend plays that are potential portfolio poison. In this list, we’ll cover three such toxic dividend stocks.  

    Intel Corporation (INTC)

    Chipmaker, Intel announced Wednesday that it would cut its quarterly dividend by more than 65%, from 36.5 cents to 12.5 cents. The company also reaffirmed its recently issued outlook for the first quarter of 2023. Intel guided to a 15-cent non-GAAP loss per share but didn’t provide full-year guidance, citing economic uncertainty. Analysts expected free cash flow to run negative for 2023 and 2024, with Intel paying out about $6 billion yearly for common-stock dividends.

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    Abrdn Income Credit Strategies Fund (ACP)

    A closed-end fund, Abrdn Income Credit Strategies Fund, offers a high forward dividend yield of 14.35%. However, Over the past year, ACP shares have fallen by more than 20%. Further declines may be ahead for two reasons.

    First, the Fed plans to raise interest rates as it attempts to tamp down high inflation. Higher rates have an inverse effect on the value of ACP’s portfolio of low-rated debt securities. Second, the current economic downturn could increase the default risk of ACP’s holdings. This may also result in another dividend cut, like the 16.7% cut implemented in 2020. 

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    Adeia (ADEA)

    Adeia is an intellectual property licensing firm with a relatively low forward dividend yield of 1.89%. Taking into account downside risk,  questionable whether the company can maintain its current rate of payout. Sell-side analysts anticipate ADEA’s earnings will fall by nearly 30% this year. If management’s plan to maximize its portfolio fails, its payout could be cut to ribbons. This may result in a steady decline for ADEA stock as well.

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    3 Go-for-broke Dividend Growth Stocks to Buy Now and Hold Forever

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    Editorial Staff
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    There seems to be an almost unanimous consensus that 2025 could potentially bring a tsunami of financial prosperity through the surge of several high-performing stocks. 

    Put simply, 2025 might just be the perfect moment for investors to consider income and growth. Like surfers patiently waiting for the perfect wave, 2025 might offer the optimal wave for dividend growth investors to ride to a successful shore of unprecedented gains. 

    We’ll embark on a journey that could potentially lead to your best financial year to date. 

    Stay with us. It’s a venture you won’t want to miss for anything in the world.

    Now let’s dive into our next step on that journey: 3 “go-for-broke” dividend growth stocks to buy now and hold forever…

    Income & Growth in 2025

    There’s something thrillingly refreshing about the idea of ‘Go-for-broke Dividend Growth Stocks’ that makes my heart race in anticipation. 

    Just imagine the explosive combination of yield and growth working harmoniously in 2025 to yield unprecedented gains. How could you, as an investor, possibly not be enthralled? 

    Undoubtedly, dividend growth stocks hold unique appeal. With the potential for robust dividends combined with exponential growth, these stocks could possibly be your best bet for attaining astounding financial success in 2025. 

    The idea of getting a payback from your investment (dividends) while simultaneously enjoying the prospect of your shares increasing in value (growth) has a certain undeniable allure. 


    The Top 3 Dividend Growth Stocks for 2025

    Now, let’s talk specifics. We are going to delve into an in-depth analysis of three fantastic stocks: AbbVie (ABBV), Coca-Cola Co (NYSE: KO), and Ethan Allen Interiors (NYSE:ETH). All three companies have an impressive track record of consistent growth and solid dividends, earning them a spot on my ‘Go-for-broke Dividend Growth Stocks’ list. 

    ABBV: More Than Just a Pill 

    AbbVie (ABBV), a research-based global biopharmaceutical company, stands out for its robust yield of over 5%. It has successfully increased its dividend for eight consecutive years, a testament to its steady yet aggressive growth plan.  

    ABBV’s primary strength lies in its diverse and unique product portfolio, including leading drugs like Humira and Imbruvica. Both these drugs have consistently generated high profits and fueled revenue growth. 

    This well-rounded product portfolio, coupled with a healthy pipeline of potential blockbuster drugs, provides a solid base for future dividend growth. As an investor, you’re not just buying a “pill,” you’re investing in a holistic healthcare package. 

    KO: More Than Just Soft Drinks  

    Coca-Cola (NYSE: KO), an iconic global brand, offers a reliable dividend yield of around 3%. Its reputation for increasing dividends for an impressive 58 consecutive years makes it an enticing option for dividend investors. 

    However, Coca-Cola is not just about soft drinks anymore. The company has been transforming its business model to focus on healthier options like water, tea, and juices. This shift towards healthier options is expected to drive growth in the coming years. 

    Furthermore, Coca-Cola’s wise investments in fast-growing brands like Monster Beverage and fairlife, and its strong global distribution network, set it up for long-term success and steady dividend growth. 

    ETH: More Than Just Furniture  

    Ethan Allen Interiors (NYSE:ETH), a leading interior design company and manufacturer and retailer of quality home furnishings, is another promising dividend growth stock with a yield of over 3%. 

    The company’s strength lies in its unique business model, which integrates design, manufacturing, and retail in a seamless process. This vertical integration allows Ethan Allen to maintain quality control and strong profit margins, thereby supporting dividends. 

    Furthermore, the surge in home improvement trends, accelerated by the pandemic, positions Ethan Allen Interiors for significant growth potential. It’s not just furniture; it’s a lifestyle statement, capable of yielding promising returns for its investors.

    Final Thoughts 

    To sum it up, I firmly believe in the potential of these ‘Go-for-broke Dividend Growth Stocks’. They provide the perfect mix of steady income and potential growth, making them a fantastic addition to any investor’s portfolio. As we look towards 2025, I can say with confidence that AbbVie (ABBV), Coca-Cola Co (NYSE: KO), and Ethan Allen Interiors (NYSE:ETH) are stocks worth holding on to for the long haul. As always, do your due diligence and happy investing!

    REITs Raining Cash: Top 3 Ultra-High-Yield Divdend Stocks to Buy & Hold Forever

    By
    Editorial Staff
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    0

    Investing in ultra-high-yield dividend stocks can be one of the most powerful tools to generate consistent passive income over time. These investments have the potential to provide cash flow that not only keeps up with inflation but can also significantly outperform more traditional fixed-income options like bonds. However, picking the right high-yield stocks requires a balance between high returns and sustainability, especially since not all ultra-high-yield stocks are created equal. In this article, we delve into three such stocks that stand out for their resilience, potential growth, and extraordinary dividend yields: W. P. Carey Inc. (NYSE: WPC), EPR Properties (NYSE: EPR), and ARMOUR Residential REIT (NYSE: ARR). Each stock presents a unique opportunity for investors looking to bolster their income portfolios with a strong yield.

    1. W. P. Carey Inc. (NYSE: WPC)

    W. P. Carey Inc., established in 1973, is one of the largest and most diversified net-lease REITs in the world. It specializes in owning high-quality commercial real estate, including industrial, warehouse, office, and retail properties. WPC’s strength lies in its diversification across property types, with a strong emphasis on long-term leases to creditworthy tenants, which provides stable and predictable income.

    In 2024, WPC offers an impressive dividend yield of approximately 7.5%, and it has a long history of increasing its dividends for over two decades. Even during challenging periods, such as the COVID-19 pandemic, WPC was able to maintain its dividend, thanks to its inflation-linked leases and a portfolio that includes recession-resistant tenants such as logistics companies and essential retailers. This kind of resilience makes it a favorite among dividend investors. Furthermore, WPC’s unique blend of both domestic and international properties mitigates some of the risks associated with region-specific downturns​

    Recently, W. P. Carey has faced pressure from rising interest rates, which has led to a slight dip in its stock price. However, this presents a potential buying opportunity for long-term investors. The company’s cash flow remains robust, and its prudent capital allocation strategy ensures that its dividend is sustainable for years to come. Analysts forecast that WPC will continue to outperform many of its peers due to its diversified asset base and inflation-protected lease structures​

    2. EPR Properties (NYSE: EPR)

    EPR Properties is a specialized REIT that primarily focuses on experiential real estate, including movie theaters, water parks, ski resorts, and other entertainment and educational facilities. What makes EPR so attractive is its focus on niche markets that cater to a consumer demand for experiences over goods. This shift towards experiential consumption has been a significant tailwind for the company, even as traditional retail has struggled.

    In 2024, EPR boasts a dividend yield of around 8.5%, making it one of the highest in the sector. EPR was hit hard during the pandemic, especially as its tenants—movie theaters and amusement parks—temporarily shuttered operations. However, with the resumption of normal activities, EPR’s properties have bounced back, and its tenants have shown resilience. The company has a well-diversified portfolio of over 200 tenants, reducing its reliance on any single source of income. Additionally, the entertainment sector is seeing a strong resurgence as consumers prioritize experiences​

    Another positive factor is EPR’s long-term leases, many of which include percentage rent clauses, meaning the company earns a portion of its tenants’ revenue. This setup allows EPR to benefit from its tenants’ growth, particularly in a rebounding post-pandemic economy. Though there are still risks associated with consumer spending trends and potential recessions, EPR’s emphasis on the entertainment and recreation sectors positions it to benefit from pent-up demand​

    3. ARMOUR Residential REIT (NYSE: ARR)

    For those looking for a pure-play on high yields, ARMOUR Residential REIT (NYSE: ARR) stands out with its extraordinary dividend yield of over 14%. ARR is a mortgage REIT that invests in residential mortgage-backed securities (MBS). Essentially, ARMOUR borrows at low short-term rates and invests in higher-yielding long-term MBS, pocketing the difference between these rates. While the company’s payout ratio is higher than ideal, ARMOUR’s monthly dividend payouts provide consistent cash flow for investors​

    ARR’s dividend yield is among the highest in the REIT sector, but this comes with increased volatility. Mortgage REITs like ARR are highly sensitive to changes in interest rates, and the company’s income depends heavily on the spread between short-term borrowing costs and long-term mortgage rates. The Federal Reserve’s interest rate policy plays a critical role in ARMOUR’s profitability. With rising rates in 2024, ARMOUR has faced pressure, but its experienced management team has shown the ability to navigate such environments. Its strategy of leveraging hedges to manage interest rate risk has helped maintain a substantial dividend, even during periods of market volatility​

    Investors should note that while ARR’s dividend yield is highly attractive, the stock is inherently more volatile than traditional equity REITs. However, for those willing to stomach short-term price fluctuations, ARR can provide a robust income stream with its monthly dividends and high payout.

    In the world of dividend investing, it’s crucial to strike a balance between high yields and the sustainability of those payouts. W. P. Carey, EPR Properties, and ARMOUR Residential REIT offer compelling opportunities for income-focused investors, with yields ranging from 7.5% to over 14%. These companies have demonstrated resilience in different economic environments and sectors, providing investors with the potential for both income and growth.

    As a firm believer in the power of dividend investing, I see these ultra-high-yield stocks as valuable components of a long-term, income-generating portfolio. Dividend investing is not just about earning income today—it’s about securing a future where compounding returns can significantly accelerate wealth accumulation. Reinvesting dividends and holding for the long haul can lead to exponential growth in a portfolio’s value, making it one of the most effective strategies for achieving financial independence.

    REITs Raining Cash: 3 “Super-High-Yield” REITs for 2024

    By
    Editorial Staff
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    0

    If the promise of yields as hefty as 25.4% piques your interest, then get ready to embrace one of the market’s best-kept secrets: Super High-Yield REITs. 

    Real Estate Investment Trusts (REITs) have emerged as a formidable force, casting a spotlight on real estate’s potential for generating outstanding returns. For those who are unacquainted, REITs are entities that own or finance income-generating real estate across a range of sectors. 

    Of course, not all REITs are created equal.

    My focus in this article is to unravel the cloak of obscurity around those particular REITs that drive in the stratosphere of returns.

    Allow me to unveil the entire profiles of 3 REITs that are raining cash.

    Again, I’m talking about yields like 15.9%, 18.5%, and even 25.4%.

    These high-performing REITs may vary from sector to sector, but what they all share in common is staggering yields that are too good to bypass. 


    • Ellington Residential Mortgage REIT (EARN), yielding an impressive 15.9%
    • ARMOUR Residential REIT (ARR), garnering a sky-high yield of 25.4%
    • Orchid Island Capital Inc (ORC), holding strong with a yield of 18.5%

    The truth of their potential is best understood when we examine their performances in detail. So, let’s dive into these super high-yield REITs, outlining why they are compelling opportunities for investors who crave high yield and, more importantly, why I am utterly impressed by their performance.

    Let’s begin our exploration with the first: Ellington Residential Mortgage REIT (EARN), showcasing an astonishing yield of 15.9%. Bearing in mind the average S&P 500 company has a yield of just under 2%, the appeal of EARN becomes evident. But what’s truly outstanding is not merely the yield—it’s the stability. EARN invests in and manages residential mortgage-backed securities, making the earnings somewhat predictable. 

    And our second heavyweight, ARMOUR Residential REIT (ARR), we see a jaw-dropping yield of 25.4%. The question immediately arises, “How does it manage such a high yield?” The answer lies in its strategic investment in Federal agency securities. As a REIT, it is required to distribute 90% of its taxable income to shareholders, resulting in a high yield and regular dividends. But it’s not an overnight spectacle. ARR is a veteran in the mortgage space, and their strategy of investing heavily in residential mortgage-backed securities is a time-proven one that has led to these impressive yields. 

    Our third contender, Orchid Island Capital Inc (ORC), with a yield of 18.5%, completes our high-yield trifecta. Another player in the residential mortgage-backed arena, ORC manages a diversified risk profile, actively hedging against fluctuations in interest rates. Given today’s volatile market conditions, the balance between risk and reward that ORC maintains is very appealing. The company’s dedication to strategic growth has resulted in consistently high yields. 

    I’ve handpicked these companies because they impressively combine high earnings with the stability that only seasoned strategies provide. In an environment where yield is becoming an elusive attribute, these REITs stand as robust financial pillars, successfully leveraging the real estate market to maintain substantial returns for their investors. Yet, every investor must gauge their risk tolerance and investment horizon. The charm of high yields can be too bright, obscuring the inherent risks associated with such returns. Therefore, while these REITs carry impactful performances, they underline the importance of diligent evaluation before investment.

    Three High-Yield Dividend Stocks for the New Year

    By
    Editorial Staff
    -
    0

    Amid unrelenting inflation and a strong potential for a recession, volatility is widely expected to continue as we head into the new year, making the job of selecting stocks difficult. A logical move in times like these is dividend stocks, which pay you to hold them. Dividend-paying companies regularly reward investors directly with a portion of the cash flow. The most desirable dividend stocks have a history of raising payouts over time as the company’s profits grow.  

    In this list, we’ll look at three yield-paying stocks that seem ripe for the picking as we head into the new year.  

    Pioneer Natural Resources Company (PXD) has long viewed sustainability as a balance of economic growth, environmental stewardship, and social responsibility. Its emphasis is on developing natural resources that protect surrounding communities and preserve the environment.

    In the wake of the pandemic, when energy prices were, cheap PXD struck an almost perfectly timed agreement to buy fellow Permian Basin producer Parsley Energy for $4.5 billion. If you’re wondering how PXD managed to finance that transaction, the answer lies in the fact that it was an all-stock deal that ensured Pioneer didn’t have a new giant debt load hanging over its head. The fact that Parsley operated primarily in the same region of West Texas, where Pioneer had both expertise and existing staff, has paid off over time.   

    That deal was a coup for Pioneer shareholders, built on the fact it was large and well-capitalized at a time when stressed and debt-reliant shale plays were looking for a white knight. On top of that acquisition, PXD also boosted its dividend by 25% at the start of the year as further evidence of its strong balance sheet.

    Investors can look forward to upcoming tailwinds, including Pioneer’s recently announced partnership with the world’s largest renewable energy producer, NextEraEnergy (NEE), to develop a 140-megawatt wind generation facility on Pioneer-owned land. The project will supply the company’s Permian Basin operations with low-cost, renewable power and is expected to be operational next year.  

    In the third quarter, revenue was up 22% YOY to $6.09 billion, smashing the consensus estimate of 4.57 billion. The company reported earnings of $7.48 per share, beating consensus expectations of $7.27 per share. So far, in 2022, the company has rewarded its investors handsomely with $20.73 per share through its generous 10.78% cash dividend. Chief Executive Officer Scott D. Sheffield stated, “Pioneer continues to execute on our investment framework that provides best-in-class capital returns to shareholders. This framework is expected to result in $7.5 billion of cash flow being returned to shareholders during 2022, including $26 per share in dividends and continued opportunistic share repurchases.”

    Even after gaining 33% over the past year, Pioneer shares likely still have valuation upside in addition to their tremendous dividend income potential.   

    Anyone who has kept tabs on the global supply chain and shipping saga that’s been unfolding since the outbreak of covid is probably familiar with Genco Shipping (GNK). The company owns a fleet of 44 ships it leases for dry bulk transportation of goods like grain, coal, and iron ore. The going rate to rent one of Genco’s ships is no less than $27,000 per day, which provides some solid cash flow that the company uses to reward its shareholders.  

    Dry bulk shipping rates, along with GNK’s share price, have fallen in recent months. Still, as China recovers from recent lockdowns and seasonal demand is expected to be strong, it’s hard to see the pullback in share price as anything less than an opportunistic bargain. This is a very volatile sector, but it’s essential to the world’s supply chain. 

    Although the company missed consensus EPS and revenue estimates in the third quarter, it remained consistent with its previously outlined value strategy. The company’s prudent cargo coverage in Q2 resulted in significant benchmark freight outperformance in Q3, allowing Genco to pass the savings onto its investors via a 56% quarterly dividend increase on a sequential basis. Over the last four quarters, the company has declared dividends of $2.74 per share, delivering on its commitment to return substantial capital to shareholders. GNK currently pays a 20% dividend yield.  

    It should be no surprise that the defense giant Lockheed Martin (LMT) has outperformed the market this year. There are apparent geopolitical implications with the war in Ukraine. When Russia decided to invade its neighbor, both U.S. and European forces rushed in to help Ukraine. It may be some time before LMT stock pops again, as it did at the onset of Russia’s invasion of Ukraine. However, its order books are likely to improve due to rising defense budgets in the U.S. and abroad. Along with Lockheed providing support to Ukrainian resistance fighters, the looming uncertainties in Russia could lead to massive economic problems and gaps in power in former Soviet Union-controlled areas.

    Given the recession-proof nature of defense contracting, Lockheed Martin should continue reporting positive results and rewarding shareholders through its quarterly 2.7% forward yield. In other words, even if the market dives again, LMT will likely stand firm. The company runs a P/E ratio of 24 times, below the sector median of 28.3 times. As well, LMT features excellent longer-term growth and profitability metrics.

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