Annuity Surrender Charges: Read the Fine Print
Annuities are one of the most popular retirement investment vehicles, but they are also one of the most debated. People either love them or hate them (there’s usually no in-between when it comes to annuities). One particular aspect of deferred annuity contracts, and the one that’s at the root of almost every debate or argument, is the legitimacy and validity of surrender charges. Annuity contracts are retirement investment vehicles developed, marketed, and maintained by life insurance companies. So, at their core, annuities are insurance products. Yes, they are specifically designed to facilitate growth and an increasing portfolio value, but these products are actually extremely complicated when you take a look under the hood. Traditional brokerage [...]
YieldCo Primer for High Dividend Investors
YieldCos are a relatively new class of dividend stocks luring in many investors. While many YieldCos offer strong income growth potential, not unlike the famous Dividend Aristocrats, they also come with high yields that average more than 5%. This combination of high yield and high income growth results from YieldCos' exposure to renewable energy, specifically wind, solar, and hydroelectric power, which have been some of the hottest growth areas in the last few years. As the world works feverishly to make the long-term transition to a clean energy future, global renewable power capacity has steadily marched upward, compounding by 15% per year since 2001. Source: Brookfield Renewable Partners Investor Presentation Given that the [...]
Vectren (VVC): A Utility Company with 57 Years of Uninterrupted Dividend Growth
You won’t read about Vectren in the headlines. But for more than 50 years in a row, Vectren has quietly paid and raised its dividend. It’s a feat that’s been done by just 21 other companies publicly traded in the U.S. Vectren is a utility company, and utility companies are often attractive to investors living off dividends in retirement. Their dependable earnings and defensive strategies mean their dividend payments are typically very safe. But one downside of utility companies is their slow growth. Vectren’s growth, however, has accelerated as of late. Let’s see if Vectren’s stellar track record of dividend payments and its growth potential makes it a candidate for our Conservative Retirees Portfolio. Business [...]
Scorpio Tankers (STNG) Cuts Dividend 92% – What Should Income Investors Do Now?
Scorpio Tankers (STNG) shocked many income investors when the company announced a 92% cut to its dividend this morning. After all, the company’s management team sounded confident about maintaining Scorpio Tankers’ dividend just a few months ago in November: “If you run through our model, the company is fully able to pay its dividend and be in compliance of its loans.” – CEO Robert Bugbee In the blink of an eye, however, Scorpio Tankers’ dividend yield plunged from 14% on Friday to just 1% at the end of Monday, wiping out substantial income for many yield-hungry investors. While this type of company is highly inappropriate for conservative investors living off dividends in retirement, it’s worth studying [...]
Carlisle Companies (CSL): 40 Consecutive Years of Dividend Increases and a Bright Future Ahead
When it comes to steady dividend growers, often the best choice can often be a seemingly dull company - one that flies under the radar, yet grows steadily over decades. Many times, it’s precisely boring companies that end up becoming dividend aristocrats, which are S&P 500 companies that reward long-term income investors with over a quarter century of consecutive payout growth. Investors can view research on the dividend aristocrats here. While Carlisle Companies (CSL) is not quite big enough to be classified as a dividend aristocrat, it has more than proven itself with 40 consecutive years of dividend increases. Let’s take a closer look to learn if Carlisle, in addition to being one of the most [...]
Dominion Energy (D): A Quality Utility Stock for Dividend Income & Growth
Regulated utilities have long been a staple for many retired investors living off dividends. However, while most people think of this industry as one that generally consists of high-yield, slow but steady dividend growth, that isn’t always the case. In fact, Dominion Resources (D) is one of the fastest growing regulated utilities you can own, with an exceptional management team that is making all the right moves to continue putting up industry-leading safe and sustainable dividend growth for years to come. Besides relatively impressive income growth, Dominion Resources’ dividend has been extremely reliable. The company has paid consecutive dividends for nearly 90 years. Let’s take a look at Dominion Resources and its 4.1% high yield for [...]
Abbott Laboratories (ABT): A Top Dividend Aristocrat Down 15% From Its High
When it comes to dividend growth stocks there are few better choices than the legendary dividend aristocrats, S&P 500 companies which have raised their dividends for at least 25 consecutive years. Investors can read analysis on all of the dividend aristocrats here. Abbott Laboratories (ABT) is a dividend aristocrat with a long track record of paying dividends dating back to 1924. The company has also raised its dividend for over 40 consecutive years. Let’s take a closer look at this medical conglomerate to see just what makes it so special. With Abbott's stock down more than 15% since its high in 2015, find out if Abbott is reasonably priced today for long-term dividend growth investors. [...]
Macy’s (M): A Household Name with a High (but Risky) Dividend
Sporting a high 4.8% dividend yield and trading at its 5-year low, Macy's (M) at first glance looks like it could be an attractive investment for investors living off dividends in retirement. But many retailers, especially department stores like Macy's, have suffered mightily over the past decade because of competition on the internet. Can investors count on Macy's to buck the trend? After all, Macy's has been around longer than all of us, and the annual Macy's Thanksgiving Day Parade in New York City has made Macy's a household name. Let's take a closer look at the company for consideration in our Conservative Retirees dividend portfolio. Business Overview Founded in 1858, Macy's and its subsidiary Bloomingdale's sell merchandise, especially [...]
Philip Morris International (PM): A Popular High Dividend Stock for Retirement Portfolios
While it may surprise many investors, history has shown us that many of the best long-term investments aren’t hyper-growth companies but much more boring dividend growth machines. For example, in the last 50 years Altria (MO), formerly Philip Morris, has been one of the best performing stocks on a total return basis, rising an incredible 6,648 fold. Back in 2008, Altria spun off its faster growing international tobacco business into Philip Morris International (PM). Since then, Philip Morris has increased its dividend for nine consecutive years, rewarding shareholders with 10.7% annualized dividend growth. While this high-yield stock’s past performance has been remarkable, investing gains are not made by looking in the rearview mirror but instead based [...]
Extra Space Storage (EXR): A Self-Storage REIT Offering High Yield and Fast Dividend Growth
Real Estate Investment Trusts, or REITs, are the best way for regular investors to gain exposure to high-quality real estate assets, including the fast growing storage space sector. Extra Space Storage (EXR) is one of the best blue chip storage space REITs, with a great track record of growing investors’ income and wealth over the long term. In fact, EXR’s stock has returned nearly 600% over the last decade, and the company’s dividend has increased by 680% during the previous five years. However, while many value-focused dividend investors might worry that Extra Space Storage is now overvalued, this quality storage REIT still has plenty of growth potential ahead of it. Let’s take a closer look at [...]