When The Walls Come Tumbling Down
Great Ones, some talking heads ain’t no damn good. You can’t trust ‘em, you can’t love ‘em.
No good deed goes unpunished, but I’m done being their whipping boy…
Me too, Mr. John Cougar Great Stuff … but how?
One word, Great Ones…
Y’all, The Graduate, while a really good movie, is so 1960s. We’re trying to get rid of plastics now, ya know?
No, the word is not “plastics” or “the bird.”
In 2022, it’s “dividends.”
And, honestly, I’ve been more than a little remiss about getting y’all some solid info on dividend stocks to buy and ways to protect your portfolio from the nightmare on Wall Street.
Ooh! Ooh! Do we get finger knives? You know … Freddie style?
Do you honestly think I’d trust y’all with finger knives after what I’ve seen in the GreatStuffToday@BanyanHill.com inbox? I’m crazy, but I’m not that crazy.
No, dividend stocks pay you regardless of what the market is doing, for the most part. Dividend investing is the real meat and potatoes of long-term investing. Sure, other stocks rise in value, but do they pay you money on a quarterly basis just for owning them? I think not!
And when those “other” stocks fall, they still pay you nothing. But dividend stocks pay out even during market recessions, bear markets and even during the dreaded “stagflation.” Dividend stocks pay you cash until the company can no longer afford to pay you cash — which is the only real drawback to long-term dividend stock investing.
With that in mind, y’all want to pick solid, well-run companies flush with operating capital and solid revenue growth as your main dividend stock holdings.
Luckily for you, I have four such investment ideas for you today: two from billionaire investor — and discount mall Santa — Carl Icahn and two from yours truly.
Icahn Invest In Dividend Stocks
First up, during a rant about how “we printed up too much money and just thought the party would never end,” Icahn listed two dividend stocks that he believes are great for the current bearish market environment:
• FirstEnergy (NYSE: FE) — FirstEnergy is one of the biggest electric utility companies in the U.S., spanning from the Midwest through the Mid-Atlantic regions. Revenue is solid, averaging between $10.61 billion and $11.06 billion annually, with 7.7% growth year over year.
But the real draw is FirstEnergy’s quarterly dividend of $0.39 per share, resulting in a yield of 3.85%. That’s well above the utility sector’s average 2.74% yield.
• Southwest Gas Holdings (NYSE: SWX) — As its name implies, Southwest Gas is in the natural gas business, with more than 2 million customers in Nevada, Arizona and California. The company also transports natural gas via the MountainWest pipelines.
Revenue rose 40% year over year in the latest quarter to $1.15 billion. Earnings fell last quarter, but that had no impact on Southwest’s quarterly dividend, which stands at $0.62 per share for a yield of 3.15%.
Now, Icahn, like most talking heads, loves his old-world energy stocks. I get it. They’re solid right now. And despite the rise of alternative and green energy sources, old-world energy isn’t going to completely die out anytime soon. (More on that in a sec.)
For the time being — i.e., for the duration of the coming bear market/recession — both Icahn’s dividend stocks are solid picks.
YouCahn Invest In Dividend Stocks
But I have my own counterpicks that offer better dividend yields with the same short-term performance possibilities — as well as longer-term buy-and-hold potential:
• Innovative Industrial Properties (NYSE: IIPR) — Innovative Industrial Properties is a real estate investment trust, or REIT. Yes, I know I just got done bashing real estate and housing, but IIPR is a cannabis REIT. That … probably doesn’t make you feel any better. Listen, it’s focused on medical cannabis, which has a much more stable market right now.
Furthermore, the company’s earnings and revenue remain impeccable, despite Wall Street’s concerns about the cannabis industry as a whole. In fact, while IIPR stock is down some 70% this year, the company recently raised its quarterly dividend to $1.80 per share for a yield of 7.20%!
Bite me, Icahn.
• Intel (Nasdaq: INTC) — Intel? Really? Yes, really. While Advanced Micro Devices (Nasdaq: AMD) is eating Intel’s lunch in the data center market, Intel isn’t going anywhere. It’s struggling, sure. But the company will recover just fine and settle in to its No. 2 spot in the industry.
In the meantime, Intel is still raking in cash, recently reporting Q2 revenue of $15.32 billion. But the reason it makes my list is its quarterly dividend of $0.37 per share, or a yield of 5.4%.
Now, are Intel and Innovative Industrial Properties a bit riskier than Icahn’s dividend stock picks? Yes, but I don’t see either INTC or IIPR cutting their dividends in the next year or so, and that’s all that matters. And even then, they’d have to cut their dividends in half to make the yields from Icahn’s picks look better.
Remember, we’re looking at dividend stocks as a protective measure to help you preserve cash and still grow your investment capital so that when this is all over with, and the walls come tumblin’, crumblin’ … down, you can invest in growth again like the baller you are!
And some people call me obnoxious and lazy … ha! If that were true, would I be here with the dividend-paying hookup for you? No, siree.
While most investors are worrying about losing their gains now, my colleague Charles Sizemore is out here looking at what he calls “Income Forever.”
I know, I know. Forever is a mighty long time…
But Charles is here to tell you … there’s something else — how you can conquer this market volatility with five of his favorite high-yielding dividend stocks! He’ll send you the entire list for FREE!
Plus, Charles will send you his brand-new book, Income Forever.
It’s packed full of the tips, tricks and secrets Charles has gathered over 20 years of helping independent investors gain financial independence.
The Good: Big Oil? At My EV Charging Station?
It’s more likely than you think. Sorry, EV investing purists, but the truth Hertz so good: BP PLC (NYSE: BP) just signed an agreement with, you guessed it, Hertz (Nasdaq: HTZ) to install EV-charging stations around the country.
The duo didn’t specify how many charging stations will be in the network when all is said and done, but Hertz wants to have “about 3,000 chargers in operation at its sites across the U.S by the end of 2023.” That’s sooner than soon … that’s next year!
Your grasp on time has been real loosey-goosey today, Great Stuff.
Cool it now. Hertz also noted that it already offers EVs for rent at 500 of its locations, which comes with it a couple implications. Sure, this is great for Hertz — its EV renters will have more places to charge soon, which is kinda necessary for road tripping.
And sure, this is great for BP too. After all, we just talked about old-world energy companies and how they’re not going anywhere. If anyone in the energy space has the kind of moolah it takes to start a nationwide charging network, it’s gas giants like BP.
But for me? The real deal Holyfield about this partnership?
It’s the fact that more gas drivers have the chance to try out the EV life through a Hertz rental. EVs are still pretty expensive and out of reach for many U.S. drivers — I see you in that beat-up ’98 Civic, I see you.
If they were to go on a road trip and rent an EV … and had more places to charge it thanks to BP and Hertz … maybe more people will make the jump to electric sooner rather than later.
The Bad: Welp, You JetBlue It
What, you thought this was the last time we’d be talking about airlines attracting antitrust attention? Oh, nay nay.
JetBlue Airways (Nasdaq: JBLU) and American Airlines (Nasdaq: AAL) are meeting with the Justice Department today to talk about a pact the two companies made a year and a half ago. The Northeast Alliance lets JetBlue and American “share revenue, coordinate routes and sell seats on each other’s planes.”
The Justice Department contends that the agreement is effectively a merger between the two companies. But is a merger by any other name still as sour for investors and customers?
According to JetBlue and American, they just wanna help people book flights easier, maaan! Why do regulators have to ruin all the fun? Ugh.
‘Course, said regulators are saying that this … is a lie. That JetBlue and American are, in fact, using the agreement to instead raise costs for flights. Why, I never! Who ever heard of an airline ripping off customers? I’m shocked, just … shook.
Seriously, though: American and JetBlue are trying to claim, without any sense of irony, that the pact allows them to take on bigger airlines. As if the pair were actually the small fry of the airline world. Davids against the goliaths of United (Nasdaq: UAL) and Delta (NYSE: DAL).
Puh-lease. They created this Northeast Alliance for a reason. Because of the agreement, for example, JetBlue and American now have a combined 31% of departing seats from New York City — and wouldn’t you know, that puts them up above United’s 24% and Delta’s 22%.
And that’s just one example. JetBlue and American are doing this all over the high-traffic, high-profit Northeast corridor. That’s not the kinda look JetBlue wants as it fights another antitrust battle over its Spirit Airlines buyout. Not at all.
The Ugly: Like Rats On A Sinking $#!%
I know, I know, such an overdone metaphor … but it wouldn’t be if companies like Peloton (Nasdaq: PTON) could get their acts together.
Dara Treseder, Peloton’s global head of marketing, communications and memberships, is leaving. She’s headed off to Autodesk (Nasdaq: ADSK), which makes drafting CAD software and other products that … you know … actually sell subscriptions.
Which makes me wonder: What is Peloton without its marketing? Without its hype machine? Of course, this is on top of two Peloton founders leaving earlier this month — and those are just the departures we know about.
Who knows how many other Peloton employees have followed Peloton subscribers to the exits too?
So now you have a new CEO in Barry McCarthy, who’s trying to rally the troops at his new company, searching for replacements for core C-suite and board members, while simultaneously and desperately attempting to keep Peloton afloat amid crashing revenues.
But nope. He can’t go for that. No can do. Let’s just try tossing out some meaningless investor-friendly language and hope that soothes the burn:
Ah. Sportsball metaphors. My favorite. Probably exactly what Peloton employees and investors want to hear right now.
Maybe Peloton should try fixing sales? Getting more customers on board? Biting the marketing bullet and lowering prices on its bikes? Getting your stuff on Amazon is a great first step, but heck, maybe it’s time to even sell the company off to more capable hands?
But again, nope. Let’s try selling used bikes to see if “value-minded customers” would be more interested. Let’s just make an even-more-expensive rowing machine that’s twice the price of any other decent rowing machine because … something something … branding.
Only Peloton knows how bad things actually are at Peloton … but the Peloton cycle seems to be reaching its climax from where I can see it.
What do you think, Great Ones? Got any thoughts on today’s Great Stuff? Head on over to our inbox to share your side of the conversation: GreatStuffToday@BanyanHill.com.
In the meantime, here’s where you can find our other junk — erm, I mean where you can check out some more Greatness:
Editor, Great Stuff