The Simple (and Safe) Way to 15%+ Returns Every Year

From Dividend Stocks

Contrian Outlook

While most people are chasing big dividend payers right now, a small group of “hidden yield” stocks are quietly handing smart investors growing income streams PLUS annual returns of 15%, 17%, 21% and more.

So if you’re ready to grab fast dividend growth that could triple your retirement income and drive fast price gains in almost any economy, here are the 5 investments to buy right away …

If you’re trying to figure out which way this market is going to swing next …

If you’re worried the S&P 500 might take another leg down, just like it did in 2022 …

Or if you’re worried about a resurgence of inflation that could result in a deep recession …

Then I have good news: I recently uncovered 5 “hidden yield” investments that are poised to soar while dishing out solid income.

For example, there’s the ag play that has quietly returned 2,000% to shareholders that Wall Street has completely missed …

And another company that’s seen its dividend surge 425% in just the last five years ! And it’s STILL undervalued (for now!) …

Plus, an unloved biotech primed to treat rare diseases, 10,000 of which are known today (while only 5% of those have treatments). That points to massive growth, sending the dividend (and share price) soaring!

Together, these five dividend-paying stocks could almost serve as a standalone portfolio – one that you can look to for steady payments … growing retirement income … and solid capital gains year in and year out.

But before I get deeper into the specifics of each of these companies, I want to explain why …

These Particular Stocks Could

Grow Your Money 15% a Year FOREVER …

Doubling Your Portfolio Every 5 Years

You probably already know that dividends are responsible for a very large chunk of the stock market’s historical returns.

In fact, dividends have accounted for more than 40% of the gains produced by US shares since the 1930s.

But it actually goes much deeper than that.

My research indicates a certain group of dividend stocks can give you A LOT more than just steady quarterly payments.

I’ve discovered a relationship between dividends and price gains that holds the key to 15%+ returns per year from very conservative investments – enough to double your portfolio in 5 years, and it could provide 3 TIMES MORE INCOME THAN MOST RETIREMENT EXPERTS SAY YOU NEED.

See, everyone wants dividend stocks with good current yields.

It’s easy to scan a newspaper or financial website and pick out the stocks that are paying 3%, 4%, 8% or whatever number you might consider “good.”

It even provides some instant gratification.

But that’s NOT the right way to pick dividend stocks.

You have to pull back the veil and find out if those yields are actually supported by the company’s cash flow, earnings power, long-term prospects and other signs of dividend, and business, health.

You have to sift through the same company’s history to determine how long it’s been paying those dividends …

How consistently it’s been paying those dividends …

And especially the trajectory of those payouts …

Over time, has the dividend increased, decreased or remained flat?

If You Understand One Simple Fact, You Could

Make SERIOUS Money from Dividend Stocks …

My research has found selecting companies with long histories of dividend hikes IS one of the safest and most reliable ways to get rich investing in stocks.

But it might not be for the reason you think.

Yes, every time a company raises its dividend, you start earning even more money from your original investment.

For example, $30 in annual dividends equals a 3% return on your original $1,000 investment.

Later, if the dividends go up to $40 a year, you are effectively earning 4% on your original $1,000 investment.

And if the trend continues over time, you could easily end up earning 10% or even 20% a year just from rising dividends … because your original amount of invested money never changes!

This explains why some savvy investors are able to collect “hidden yields” – regular payments that are MANY TIMES MORE than the dividend numbers you see reported by major media outlets.

But that’s only part of the story …

The Market Quickly Covers Up These “Hidden Yields”

Handing You One Potential Windfall After Another!

For example, if a stock pays a 3% current yield and then hikes its payout by 10%, investors will typically see the new 3.3% yield and buy more shares.

In the process, they’ll drive the price up and push the yield back down towards 3% again.

I call this the “Dividend Magnet” because, over the long term, the rising payout pulls the share price higher.

Let me show you how this works in the real world with a well-known income stock like Procter & Gamble (PG).

PG typically yields around 2.5% a year, so as the firm has been growing its dividend every year, investors have been bidding the stock up to keep its yield in line with that level.

You can see this very clearly in this chart of Procter’s stock. The purple line shows the stock’s price over the last five years. The orange line shows the stock’s dividend going up each of those years.

As the chart shows, despite some ups and downs, PG shares rose more or less as fast as the company’s dividend payments.

Of course, I am NOT saying Procter & Gamble is a stock you should buy right now.

Its sales growth slowed a bit as inflation drove shoppers to discount brands over PG’s household hallmarks. A trade war could also hurt its margins, in turn slowing its payout growth (and by extension its price gains).

The important thing here is that although investors tend to fixate on stocks’ current yields – which are widely published and available – meaningful dividend growth can be a valuable source of “hidden yields.”

Let’s look at two more popular dividend stocks—AbbVie (ABBV) and JPMorgan Chase & Co. (JPM)—to see the same thing in action. Both of these stocks have had nearly constant yields over the last 10 years.

Why?

Because their price returns have also closely tracked their dividend growth.

As you can see:

AbbVie increased its dividends 221.6% (green line) and its stock rose 248.3% (blue line) …

And JPMorgan’s dividends (in orange) jumped an impressive 212.5%, while the company’s shares (in purple) jumped 304.3%!

So the very best dividend stocks rarely show high yields because the Dividend Magnet pulls their prices higher with the increasing payments!

You can see the trend in the chart above. But most people never realize any of this.

But those of us who DO stand to profit handsomely and almost automatically!

It’s a simple three-step process:

Step 1. You invest a set amount of money into one of these “hidden yield” stocks and immediately start getting regular returns on the order of 3%, 4% or maybe more.

Step 2. Over time, your dividend payments go up, so you’re eventually earning 8%, 9% or 10% a year on your original investment.

Step 3. As your income is rising, other investors are also bidding up the price of your shares to keep pace with the increasing yields.

This combination of rising dividends and capital appreciation is what gives you the potential to earn 15% or more, on average, with almost no active trading at all.

So with “hidden yield” stocks, you just get into the right investments and let a proven system take your wealth higher and higher without much fuss at all. However …

If You Want THE BEST POSSIBLE RETURNS,

Look for One More Thing to Add Extra

Upside to Your Dividend Stocks!

I imagine you’d be pretty darn happy to watch your portfolio grow roughly 15% every year … doubling in value every five years … and creating bigger and bigger potential income streams along the way.

And as I’ve just explained, picking the right “hidden yield” stocks can do that without exposing you to outsized risks or can’t-sleep-at-night worries.

But what I’ve found is that adding in one additional criteria can point you to even bigger, faster upside from dividend stocks.

Stock repurchases.

Whenever a company buys back its own stock, it is basically improving every single “per share” metric that investors watch – earnings … free cash flow … book value … etc.

After all, if a company reduces the number of its shares by 50%, its earnings per share will automatically DOUBLE without any actual increase in profits.

I probably don’t need to tell you what should happen next …

Investors will quickly bid up the stock’s price to bring it back in line with the value it was trading at before.

Indeed, my research shows that simply investing in the right stocks that are reducing their share counts can help you beat the broad market’s performance.

Best of all, analysts expect record buybacks this year, as companies invest money they squirreled away during the pandemic into their own stocks.

But even now, there are plenty of firms buying back shares, and getting a nice upside kick in return.

You can see this by looking at the shares of Walmart (WMT), which has taken an impressive 17% of its stock off the market in the last 10 years, helping drive a 200% gain in the share price!

And that’s just one example. By targeting cash-rich companies that either continue to buy back shares now or have a long record of doing so you can set yourself up for HUGE price gains.

And you’ll do even better if you …

Combine “Hidden Yield” Stocks With

Buyback Programs. The Gains Can Be Truly Explosive!

Let’s take a trade I recently closed to see the kind of returns this combo can provide.

Back in April 2020, as the world was shutting down, I recommended food maker Mondelez International (MDLZ). The stock hit my radar because it was quickly growing its dividend payments and management was aggressively buying back shares.

Specifically, Mondelez had reduced its outstanding shares by an amazing 12.3% in the preceding five years, and was nicely set to keep those repurchases coming.

Plus, the stock was still yielding around 2.6%, even after it had boosted the payout a massive 90% in the five years leading up to our buy!

All those things told me the stock could take off as the company continued growing its dividends and buying back more shares.

Sure enough, it played out just that way.

The company reduced its share count by another 4.6% over the next three years, while hiking its payout another 35%. The market quickly responded as that happened and the stock soared 38.5% in that span.

All together, we ended up with a 48% total return (with dividends included) when we sold in April 2023, from a “boring” blue chip stock!

35% Dividend Hikes + 38.5% Price Gains (and Buybacks!) = 48% TOTAL RETURN!

Of course not all of my recommendations work out exactly like this one … some better, some not quite as well… but this example shows that there’s no need to invest in things you don’t understand … or guess about how some new product rollout or business development is unfolding.

If you find companies that are consistently raising their dividends at solid rates PLUS consistently buying back their own shares, you have the recipe for annual total returns of 15% or more.

That’s WAY better than what you can expect from a broad stock market mutual fund or ETF …

And it’s far more than what you’d get from most bonds or other fixed-income investments right now …

And it’s more than triple what the very best certificates of deposit pay at the moment.

In fact, since most experts recommend withdrawing 4% of your nest egg each year during retirement, it means your portfolio could actually be growing three times faster than you’d be withdrawing money.

Put another way, simply investing in the right “hidden yield” stocks at the right time could triple the amount of money you have to enjoy in your golden years.

Best of all, it can do so without taking on unnecessary risk !