Rachel’s note: It’s hard to recall a more challenging time for investors. Sure, 2008 was bad. But today, we’re facing not only a bear market on Wall Street… but also crippling inflation.
All while Russia is waging a war in Europe that’s disrupting supply chains. And we’re on the brink of a full-blown global energy crisis.
As a result, it can seem at times like nothing is working in today’s market. But what if I told you there was a time-tested way to invest through this… and any other crisis? A strategy that’s statistically proven to boost your bottom line, year after year, regardless of recession.
That’s what you’ll hear about today from Casey Research friend Brad Thomas. We introduced Brad in the Dispatch a couple weeks ago: he’s a former real estate developer turned investor and advisor.
And as he reveals below, this strategy carried him through the dot-com bust, the subprime mortgage crisis, a global pandemic, and many other bear markets…
By Brad Thomas, editor, Intelligent Income Daily
On Monday, we saw U.S. stocks bounce.
After losing as much as 13% last month… the S&P 500 surged 2.6%.
If you believe the talking heads on TV, investors are betting the Fed’s done with jacking up interest rates to combat inflation.
Some say the dollar’s strength is hurting other countries’ abilities to pay down their dollar debt. Others say the Fed is worried it will cause a recession.
I couldn’t care less either way.
I don’t worry about one-day stock market moves. I don’t hang on to the Fed’s every move.
As other investors worry about this stuff, I’m building reliable streams of income in the form of dividend checks.
Dividends are regular income payouts companies make to shareholders to incentivize them to invest.
And despite all the doom and gloom in the news, plenty of companies are rewarding loyal shareholders with hefty dividend increases.
I’ve built my career as an investor and newsletter publisher around recommending investments that provide safe, reliable, growing income.
I call it SWAN investing. That’s because it helps my subscribers and me sleep well at night. We know no matter what the stock market does, we’ll have a steady flow of cash coming into our accounts.
And dividends are one of our favorite ways to collect that income.
Today, I’ll show what makes a company a good dividend payer… and what to look for when selecting them. These companies will help you build streams of reliable income, regardless of what’s going on with interest rates… or the economy.
From Boom to Bust
I’m Brad Thomas, editor of a new e-letter called Intelligent Income Daily. (If you’d like to sign up for free, go here.)
My experience with investing hasn’t always been a pleasant one. I was a real estate developer with a booming empire. I made a fortune.
But in 2008, trusting in the wrong people… and a global financial crisis… set me back to square one.
Building back my finances was a long and painful journey. But I’m happy to say I’ve made back my millions – and then some.
Even more important, I came back wiser. And I now make safety the bedrock of my strategy.
So I want to share all I’ve learned with other people like me – regular folks looking to secure a healthy future. That way, they won’t fall into the same traps I did.
You can learn, as I did, not only how to survive in any market – but to thrive.
We’re facing some big challenges. And the bear market hasn’t run its course. But my safer strategies for helping grow your long-term wealth shine in these volatile market conditions.
I’ve gathered a team of income experts with decades of combined experience in market booms and busts. Our research uncovers plays statistically proven to boost your bottom line, year after year.
And that’s regardless of recession…inflation… bear markets… or anything else the economy throws at us.
It’s a time-tested strategy that created tremendous wealth and security through the housing market crisis, the dot-com crash, a global pandemic, and so many other bear markets before it.
Our strategies are so reliable that from the March 2020 market lows… and through the wild swings we’ve seen in 2022… we’ve delivered a 100% win rate in our flagship publication.
How did we do it?
Finding the Best Dividend Payers
There are lots of dividend-paying stocks out there.
My team and I focus on consistent dividend growers. In the past few weeks, we’ve seen several impressive dividend raises:
Microsoft (MSFT) hiked its dividend by 10%. That makes 21 consecutive years increasing its payout.
Accenture (ACN) bumped its dividend up by 15.5%. It’s at 18 years and counting.
Texas Instruments (TXN) rounded up a 7.8% raise. That’s year 19.
New Jersey Resources (NJR) continued chugging along with a 7.6% increase. It’s at 27 years nonstop.
My personal favorite is Realty Income (O).
It’s a real estate investment trust (“REIT”). It owns income-producing commercial real estate. And it’s delivered a 0.2% dividend boost, like clockwork, every quarter.
Over the past year, its dividend is up 5.1%.
That was its 100th straight quarterly dividend hike. That’s 25 years of regularly raising its dividend payment to shareholders.
Putting Shareholders in Control
Not all dividend growers are the same.
My team and I look for ones that have a stable, profitable business… with ample opportunities for growth and a moat against competitors.
More important, the company’s management must make dividends a priority.
When a company has more cash than it needs to operate, it has options.
It can invest in new growth opportunities… buy a competitor… buy back its shares… pay down its debt… or pay a dividend. Each has pros and cons.
Investing in growth is risky. New technologies may not work. Or new products may not catch on.
Acquisitions are a way to buy growth. Sometimes, they’re the only way to get an important piece of technology. But studies show that 70-90% of acquisitions fail.
When a company buys back its stock, it destroys it. This pushes up the value of the outstanding shares. So buybacks, in theory, are the most tax-efficient way to reward shareholders.
But often, companies spend a lot on buybacks when prices are high… only to stop when times get tough and shares are cheap.
Debt gives you leverage. So it’s rocket fuel for growth. But too much debt can hurt a company.
Paying dividends to shareholders puts them in control. We can spend the money as we see fit or reinvest in more shares… and compound our gains.
Watch Out for “Sucker Yields”
One last thing to watch out for is what I call sucker yields.
If a company sets its dividend too high, it may not invest enough in its business. That means it may have to cut its payout when times get tough.
The best dividend growers strike a delicate balance between preparing for the future and consistently rewarding shareholders with sustainable payouts.
The companies that keep up dividend growth streaks for decades, through good times and bad, tend to be higher quality companies that experience less volatility.
And those are exactly the ones that you want to be invested in when the markets go crazy.
A good place to start your income journey are the dividend payers in the Schwab U.S. Dividend Equity ETF (SCHD).
It holds around 100 stocks that have consistently grown their dividends.
So you can stop worrying about interest rates and start earning income from some of the best companies in the market.
Happy SWAN (sleep well at night) investing,
Editor, Intelligent Income Daily
P.S. When you look for well-managed companies that offer what people want in ways nobody else can – you can weather any kind of stormy market.
And that’s why I’m excited to share some big news today…
I’m launching a new service focused on finding companies just like that. It’s called Intelligent Income Investor. And it contains a full portfolio of income-focused investments. Thanks to the recent market downturn, almost all of them – over two dozen – are actionable immediately.
To find out more about this new service and how you can access this portfolio, check out my brand-new video presentation. In it, I share the name of one of my favorite REITs right now in this market.
You’ll get that name – free – just for watching. Don’t let it go to waste.