There is a classic conundrum facing dividend-focused investors: Income or capital appreciation?   The iShares Select Dividend ETF (NYSE: DVY) is a classic example. It delivers a 3% yield and relatively low volatility, but has underperformed the iShares S&P 500 Growth Fund (NYSE: IVW) by roughly 40 percentage points  over the past ten years on  a total return basis.      A decent yield is always nice, but a 40% gap is too large to ignore.   There is one way to get the best of both worlds. The secret is what type of income stocks you… Read More

There is a classic conundrum facing dividend-focused investors: Income or capital appreciation?   The iShares Select Dividend ETF (NYSE: DVY) is a classic example. It delivers a 3% yield and relatively low volatility, but has underperformed the iShares S&P 500 Growth Fund (NYSE: IVW) by roughly 40 percentage points  over the past ten years on  a total return basis.      A decent yield is always nice, but a 40% gap is too large to ignore.   There is one way to get the best of both worlds. The secret is what type of income stocks you focus on.   Many  dividend-paying companies operate in mature industries with slower sales growth and competitive environments. Such dynamics often generate solid cash flow, but high payout ratios and saturated markets mean little in the way of stock price appreciation.   Find one of these cash machines with new growth engines and you’ve got yourself a stock that could be the best of both worlds.   A Cash Machine With Nowhere To Go For years, the U.S. telecom sector has been the model of slow-growth dividend stocks. Despite fairly reliable cash yields, the iShares U.S. Telecommunications ETF (NYSE: IYZ), for… Read More

Winter weather investing is always popular this time of year. Who can forget last year’s polar vortex that sent natural gas prices up 40% between December and February? This December has started out relatively mild across the United States, but January could bring the need for extra heating. Trading on the weather can be a gamble, though, as Mother Nature does not always cooperate with our bets. That’s why I like to hedge my cold-weather plays by investing in stocks with strong year-round drivers as well.  #-ad_banner-#While many look to utility companies and retailers for their winter plays, I like… Read More

Winter weather investing is always popular this time of year. Who can forget last year’s polar vortex that sent natural gas prices up 40% between December and February? This December has started out relatively mild across the United States, but January could bring the need for extra heating. Trading on the weather can be a gamble, though, as Mother Nature does not always cooperate with our bets. That’s why I like to hedge my cold-weather plays by investing in stocks with strong year-round drivers as well.  #-ad_banner-#While many look to utility companies and retailers for their winter plays, I like power generation. Demand for backup generators can spike during the winter if storms knock out transmission lines. Not only could equipment providers see higher sales on a rough winter, but spring brings the potential for higher sales on storm activity. Generac Holdings (NYSE: GNRC) dominates the market for home standby generators with a 75% share. It books 51% of its $1.43 billion in annual sales from residential equipment. The company’s industrial and commercial segment, responsible for 44% of sales, is diversified across the energy, industrial, light commercial and construction markets. The company has a strong footprint in North… Read More

As an American expat living in Colombia, I have had a first-hand view of the major economic changes taking place across South America.                            #-ad_banner-#​I first warned investors in November of last year that Brazil was heading for fiscal ruin and highlighted Petrobras (NYSE: PBR) as an underperformer, just before the state-controlled oil giant tumbled lower. Though Brazilian stocks received a pre-election bounce this past summer, I again warned investors that a likely… Read More

As an American expat living in Colombia, I have had a first-hand view of the major economic changes taking place across South America.                            #-ad_banner-#​I first warned investors in November of last year that Brazil was heading for fiscal ruin and highlighted Petrobras (NYSE: PBR) as an underperformer, just before the state-controlled oil giant tumbled lower. Though Brazilian stocks received a pre-election bounce this past summer, I again warned investors that a likely political outcome would bring fresh bad news for Brazilian stocks. Since then, the iShares MSCI Brazil Fund (NYSEMKT: EWZ) has tumbled 20%. As bad as it looks for the region, especially for powerhouse economies like Brazil and Argentina, things could get a lot worse in 2015. Even the seemingly healthier Chilean and Colombian economies may not be safe for investors over the next twelve months. But can you afford to completely neglect stocks of Latin American companies? After all, the region is still expected to post GDP growth of more than 2% in 2015… Read More

The five-year bull market, which has seen the S&P 500 rise more than 200% since the March 2009 low, boosted share prices in virtually every sector. A stable U.S. economy gets much of the credit. As has been the case throughout the bull market, some investors are expressing concern that the bull may be getting tired, while others see more gains ahead. #-ad_banner-##-ad_banner-#“Stocks are getting expensive, but higher analyst expectations for forward earnings justify the prices,” say some pundits. Others note that the rally is fueled by an expansion of credit and liquidity that will take prices higher. Frankly, it’s… Read More

The five-year bull market, which has seen the S&P 500 rise more than 200% since the March 2009 low, boosted share prices in virtually every sector. A stable U.S. economy gets much of the credit. As has been the case throughout the bull market, some investors are expressing concern that the bull may be getting tired, while others see more gains ahead. #-ad_banner-##-ad_banner-#“Stocks are getting expensive, but higher analyst expectations for forward earnings justify the prices,” say some pundits. Others note that the rally is fueled by an expansion of credit and liquidity that will take prices higher. Frankly, it’s hard to call market tops and bottoms, but we do know that stocks that rise the fastest often fall the hardest during a pullback. And right now, shares of our nation’s railroad operators are looking especially vulnerable. Three stocks in particular rose an average of roughly 500% since March 2009. To understand why caution is advised, you need to turn the clock back to 2007 — two years before the bull market began. At the time economists pointed to limited supply and surging demand to rationalize optimism for railroad shares. Is 2015 The Year Rail Carriers Derail? To be… Read More

Any value investor will tell you there is a fine line between super deal and value trap. Just about everyone has their story of that seemingly cheap stock that got even cheaper and left them disappointed.  That’s why you always need to look to the reasons for a stock’s value and management’s plan for the future. Some stocks seem cheap on an analysis of the business assets, but management has no real plan for growth, which is especially important since value stocks are often in mature industries.  Other value stocks may be cheap relative to the market but still relatively… Read More

Any value investor will tell you there is a fine line between super deal and value trap. Just about everyone has their story of that seemingly cheap stock that got even cheaper and left them disappointed.  That’s why you always need to look to the reasons for a stock’s value and management’s plan for the future. Some stocks seem cheap on an analysis of the business assets, but management has no real plan for growth, which is especially important since value stocks are often in mature industries.  Other value stocks may be cheap relative to the market but still relatively expensive versus their peers. So even if investor sentiment for the industry turns for the better, the stock may not rise as much as others in the space.  But every once in a while you can find that proverbial diamond in the rough. And I think I’ve found it in one of the cheapest stocks in the S&P 500. #-ad_banner-#News Corporation (NASDAQ: NWSA) trades at just 0.67 times book value, making it the fourth cheapest stock in the S&P 500 based on Bloomberg data. Of course, the big price-to-book (P/B) discount is not completely without rationale. The publishing industry is… Read More

  As New Year’s rolls around each year, 45% of Americans typically make resolutions to better their life, according to StatisticBrain.com. Of that group of people, only 8% are successful in their resolve.   #-ad_banner-#I gave up resolutions a few years ago for just that reason. I am a type-A personality and regularly make goals anyway, so I didn’t see the need for the perennial tradition.   These days, I am focused on the resolutions made by others. Simply understanding how others are expected to act in the New Year can be a basis for a winning investment. Read More

  As New Year’s rolls around each year, 45% of Americans typically make resolutions to better their life, according to StatisticBrain.com. Of that group of people, only 8% are successful in their resolve.   #-ad_banner-#I gave up resolutions a few years ago for just that reason. I am a type-A personality and regularly make goals anyway, so I didn’t see the need for the perennial tradition.   These days, I am focused on the resolutions made by others. Simply understanding how others are expected to act in the New Year can be a basis for a winning investment.   Fitness And Finances We’ve all been there. The holidays are over and you’ve accomplished two things, increasing your pants size and decreasing the size of your savings account. That’s why fitness tops the list with the first and fifth most common resolutions (improving financial health is  the third most common resolution).   In January, Americans will flood the fitness clubs and will resolve to save more of their money. This could mean strong sales for exercise facilities, active wear apparel and financial services firms with a share in the retail market.   Life Time Fitness, Inc. (NYSE: LTM) operates… Read More

One of the most common discussions among investors is whether you can really beat the market and how much information is already baked into stock prices.  Technicians say they can follow historical patterns to make money on fast trades. Fundamental analysts say they can make money on careful analysis of public filings. The “indexers” say all historical and public information is already reflected in prices, so there’s nothing new to be earned from analysis.  All of these arguments are pretty hard to prove one way or another. But there is one thing they all agree on: Insiders have the information… Read More

One of the most common discussions among investors is whether you can really beat the market and how much information is already baked into stock prices.  Technicians say they can follow historical patterns to make money on fast trades. Fundamental analysts say they can make money on careful analysis of public filings. The “indexers” say all historical and public information is already reflected in prices, so there’s nothing new to be earned from analysis.  All of these arguments are pretty hard to prove one way or another. But there is one thing they all agree on: Insiders have the information that moves stocks.  #-ad_banner-#That’s why insiders must file multiple reports with the Securities and Exchange Commission (SEC) about their relationship to and ownership of the company. And that is where one of my favorite stock-picking clues comes in.  Corporate officers, directors and any beneficial owner with more than 10% of a company’s shares must file Form 3 with the SEC within 10 days of the beginning of their relationship with the company. They must then file Form 4 within two days of any change in ownership, including buying or selling shares.  When investors get their hands on these filings, it… Read More

As an American living in Colombia, I have seen firsthand how watching the U.S.-based news feed can skew investor perspectives and limit opportunities. Sometimes looking beyond the popular press to the real facts behind the story can lead to some great investments. For example: Ask about investing in Colombia and most investors would wonder if you’ve gone mad with visions of drug lords and rebel groups coming to mind. Why? Because these dramatic problems are all that plays on the 24-hour news feed. I know I have earned consistent double-digit returns on my investments in Colombia. But to overcome my… Read More

As an American living in Colombia, I have seen firsthand how watching the U.S.-based news feed can skew investor perspectives and limit opportunities. Sometimes looking beyond the popular press to the real facts behind the story can lead to some great investments. For example: Ask about investing in Colombia and most investors would wonder if you’ve gone mad with visions of drug lords and rebel groups coming to mind. Why? Because these dramatic problems are all that plays on the 24-hour news feed. I know I have earned consistent double-digit returns on my investments in Colombia. But to overcome my limited and media-driven understanding of the opportunities, I had to dig deeper and look at the facts. And that is exactly the case with another investment opportunity I have been watching. If you are following the U.S.-based news feed, all you see about this country recently is its interference in a neighbor’s conflict and the power-hungry ambitions of its president.  Look beyond the superficial sound bites and you see record low stock valuations and annualized investment returns of 45% and higher. #-ad_banner-#How Do You Say ‘Record Low’ in Russian? Prices for stocks on the Moscow Interbank Currency Exchange (MICEX) have… Read More

Baron Rothschild’s advice to, “Buy when there’s blood in the streets,” is not thought to be a literal recommendation. The idea is that overwhelming fear drives rational investors to irrationally sell good stocks, which can be picked up for huge discounts while emotions dominate sentiment. Sometimes, unfortunately, battles over territory lead to actual bloodshed, as we’ve been witnessing in Eastern Europe. #-ad_banner-#The ongoing conflict between Russia and Ukraine has continued for longer than almost anyone predicted and still shows no sign of easing. Investors have responded by dumping Russian stocks. The Market Vectors Russia ETF (NYSE: RSX) has slid nearly… Read More

Baron Rothschild’s advice to, “Buy when there’s blood in the streets,” is not thought to be a literal recommendation. The idea is that overwhelming fear drives rational investors to irrationally sell good stocks, which can be picked up for huge discounts while emotions dominate sentiment. Sometimes, unfortunately, battles over territory lead to actual bloodshed, as we’ve been witnessing in Eastern Europe. #-ad_banner-#The ongoing conflict between Russia and Ukraine has continued for longer than almost anyone predicted and still shows no sign of easing. Investors have responded by dumping Russian stocks. The Market Vectors Russia ETF (NYSE: RSX) has slid nearly 30% this year, matching the steady slide of the Russian ruble.  Concerns of an expanded conflict, coupled with a rapidly-slowing Russian economy, means that the Moscow Interbank Currency Exchange (MICEX) now trades for less than five times trailing earnings. The index is trading at its steepest discount to emerging market equities since at least 2005. Rational investors may want to heed Baron Rothschild’s advice and look beyond short-term fears. Indeed behind the grim news are some real positives: Russia recently signed two huge trade deals with China that go a long way to blunt economic sanctions from the West. China… Read More

Here at StreetAuthority, we’re big fans of Real Estate Investment Trusts (REITs).  They provide solid income backed by real assets that people will always need. #-ad_banner-#And one of our favorite REITs has long been known for great dividend yields and a very stable tenant. Better still, management at this REIT has put the wheels in motion to deliver an even higher payout in coming years. I’m talking about Government Properties Income Trust (NYSE: GOV), which is one of the largest publicly-traded landlords for the U.S. government.  Of the REIT’s 82 properties, 32 are leased to the Federal government, 18 to… Read More

Here at StreetAuthority, we’re big fans of Real Estate Investment Trusts (REITs).  They provide solid income backed by real assets that people will always need. #-ad_banner-#And one of our favorite REITs has long been known for great dividend yields and a very stable tenant. Better still, management at this REIT has put the wheels in motion to deliver an even higher payout in coming years. I’m talking about Government Properties Income Trust (NYSE: GOV), which is one of the largest publicly-traded landlords for the U.S. government.  Of the REIT’s 82 properties, 32 are leased to the Federal government, 18 to state and local branches and one to the United Nations. Almost all (93%) of the REIT’s revenue is tied to the public sector, and Government Properties sports a vacancy rate of just 4.6%, well under the 14.8% vacancy for office buildings nationally. That kind of stability has helped generate  a compound annual revenue growth of 21%  since 2007. I first looked at GOV in February 2013, which was a great time to enter the stock. Although shares subsequently rallied following my article, they’ve recently pulled back and again hold clear value. The stable tenant and solid yield remain key… Read More