Stocks That Pay Dividends

Dividend-Paying Turnaround Investing Stocks

We here at The Turnaround Letter have always liked dividend paying stocks for three principal reasons:

  • First, if the stock stays flat for a while, you get paid something while you wait for it to move up.
  • Second, if the market goes down, stocks that pay dividends tend to go down less because their holders are not quite so anxious to sell them.
  • Third even though dividend rates may seem low, they add up to real money over time. If you hold a stock that has a 3% dividend yield for four years, the dividend adds 12% of incremental return. As a friend of ours likes to say, “That’s better than a poke in the nose.”

Recently, investors have been pouring into certain dividend paying stocks, particularly utilities and REITs as bond substitutes, since actual bond yields are so low. That has pushed the prices of these bond substitutes up quite a bit over the last year or two, and we think they may be vulnerable when interest rates finally do begin to rise.

MoneyShow.com's Steve Halpern recently interviewed me on this topic and the potential dangers of an uninformed investment strategy. Read or listen to the full article for my turnaround investing advice.

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Who wants to buy stocks right now? Nobody.

At best, the broad stock market’s 15.8% drop since its peak only three months ago on September 20 has been disconcerting. The deeper 23% plunge in small cap stocks, as measured by the Russell 2000 index: startling. For the weakest 9% of S&P500 stocks – often those with some type of unfavorable macro exposure – their average loss of 40% in such a brief time has been simply jaw-dropping. Read More.

EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

Read More.

Turnaround Letter Stock Pick Named Top Performer of 2017

 

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What Last Year's Top Stock Pickers Are Buying in 2018

 

This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.

 

George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."