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These are our most recent articles. Also see which stocks have been this week’s best and worst performers.
Guide to Taxes on Dividends
With tax season upon us and the world of dividend investing having now matured and expanded into an ever more complex universe of business types, many income investors are understandably confused about taxes on dividends. Especially since the U.S. tax code has grown into one of the largest and most convoluted parts of our government. In fact, the number of pages in the federal tax code expanded from 400 in 1913 to 74,608 in 2014, according to Wolters Kluwer. Let’s take a detailed look at all of the most important considerations you need to keep in mind when it comes to the tax effects of the various dividend investing vehicles. In this guide to taxes on [...]
GNC Suspends Dividend: An Important Lesson on Dividend Safety
GNC (GNC) surprised many income investors when management recently announced that the company’s dividend will be suspended. After all, GNC has been in business for more than 80 years, maintains a payout ratio below 40%, generates solid free cash flow, and even increased its dividend every year since it began paying one in 2012 - including an 11% boost just last year. These are some of the qualities we look for when evaluating companies for our Conservative Retirees dividend portfolio. None of these strengths mattered, however. GNC’s double-digit yield was wiped out immediately, adding insult to injury after the stock’s 70%+ decline over the past year. Dividend safety and capital preservation are two keys for [...]
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 [...]