REITs vs. Bonds in Retirement

Over the past decade, the U.S. has seen its lowest interest rates in history which has made REITs, with their naturally high yields and low volatility, attractive so-called "bond alternatives." However, in reality, there are important differences between bonds and REITs that investors need to understand when deciding what asset allocation is right for them. Let's take a look at what these differences are, the pros and cons of each kind of asset, and most importantly, what the right mix of bonds and REITs is reasonable for a retirement portfolio.

December 13th, 2018|

Vector’s Dividend is on Shaky Ground Despite 20-Year Growth Streak

Tobacco stocks have historically been a dependable source of generous and growing income, plus solid long-term total returns. However, not all cigarette stocks are created equal. In 2018, Vector Group (VGR) has seen its stock price plunge nearly 50%, worse than its major tobacco rivals (shares of Altria and Philip Morris have lost 23% and 19%, respectively). Vector's Dividend Safety Score has remained in our "Very Unsafe" category for more than a year. With VGR's dividend yield nearing 14%, its highest level in more than two decades, let's evaluate if a dividend cut could be on the horizon to end the firm's 20-year dividend growth streak.

December 7th, 2018|

AT&T Reassures Investors It Remains on Track to Hit Deleveraging Targets

AT&T (T) has been in the spotlight much of this year. Not only does its satellite TV business continue bleeding subscribers, but the company's debt load ballooned following the firm's acquisition of Time Warner. With roughly $170 billion in net debt and $13 billion in annual dividend payments that consume more than half of AT&T's free cash flow, some income investors are nervous that a dividend cut is inevitable to help shore up the balance sheet. Based on the information we know today, that outcome seems unlikely. On November 29, AT&T's management hosted an investor conference and made statements in support of our belief, helping fuel a 2.2% rise in T's stock price the following day.

December 1st, 2018|

Implications of United Technologies’ Plans to Split Up

United Technologies (UTX) is one of America's oldest and largest industrial conglomerates. That business model has served income investors well, with the company recently becoming a dividend aristocrat by announcing its 25th consecutive annual dividend increase and also boasting a track record of paying uninterrupted dividends since 1936. However, on November 26, 2018, the firm announced plans to break up into three separate companies, which sent shares plunging as much as 6% on the news. Let's take a look at why United Technologies is splitting up its business units and what it means for long-term dividend growth investors who hold the stock.

November 29th, 2018|
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