Yet some of the world’s most successful investors swear by it.

It’s also one of the few investment strategies grounded in sheer common sense. The core of value investing is simple: Buy shares of a solid business for less than they’re really worth.

Not only does this minimize downside risk, but as the market eventually recognizes the company’s true value, patient investors can reap handsome rewards.

But just because it’s simple doesn’t mean it’s easy.

Successful value investing requires independent thinking, meticulous research, and the discipline to tune out the crowd. That’s why having a clear, objective framework is critical in identifying genuine bargains amid the market’s noise.

Since taking the helm of Wealthy Retirement’s Value Meter column, I’ve sought to help readers better gauge whether stocks are overvalued or undervalued in a way that isn’t endlessly complicated.

The father of value investing, Ben Graham, believed financial analysis should be simple, requiring no more than basic arithmetic. While the system behind The Value Meter uses a tad bit more than arithmetic, it does aim to be simple. In fact, it’s based on only three key metrics.

The Value Meter Criteria

The first metric gets to the heart of what makes a good business: the ability to generate profits. But what’s the best measure of profitability?

Reported earnings can be misleading. Massive one-time gains, shifting accounting policies, and management trickery can all distort a company’s true profitability.

That’s why most value investors insist on following the cash.

Free cash flow is the primary measure of profitability I look at. It represents the cash a company generates after subtracting operating expenses and capital expenditures.

Steady cash flow is the lifeblood of any business because it allows the company to fuel growth, reduce debt, and reward shareholders.

After I determine a company’s free cash flow, I like to compare it with the company’s net asset value, or NAV − the difference between its assets and its liabilities.

This ratio of free cash flow to NAV is our first key metric. It allows me to assess how efficiently the company is using its resources to generate cash, so the higher it is, the better.

For example, let’s say Company ABC and Company DEF both have $1 billion in net assets, but Company ABC brings in $40 million in free cash flow while Company DEF brings in just $20 million. This means Company ABC is twice as efficient as Company DEF at turning its assets into cash.

Next, I look at the hypothetical cost of acquiring the entire business, also known as its enterprise value, or EV. Unlike market cap, EV accounts for a company’s total acquisition cost, including both equity and debt.

Just as I do with free cash flow, I compare each company’s EV with its NAV to arrive at what’s called the EV/NAV ratio. That’s the second metric in the Value Meter system.

A low EV/NAV ratio suggests that you’re paying relatively little to acquire the company – a hallmark of an undervalued stock. So the lower the figure, the better.

The third metric is free cash flow growth consistency – how often a company’s quarterly free cash flow has grown across the past 12 quarters. This isn’t about total growth, but reliability.

Once I’ve calculated these three figures, I’m able to see where the company ranks among the roughly 6,000 U.S. exchange-traded stocks in my database.

In each one of my Value Meter columns, you’ll see a comparative graph like this, showing how the company stacks up against the averages for all three metrics:

Lastly, I score each company by averaging its ranking for each measurement and using basic statistical analysis to assign it a score on a scale from 0 to 10.

Those scores correspond to five different categories: “Extremely Undervalued,” “Slightly Undervalued,” “Appropriately Valued,” “Slightly Overvalued,” and “Extremely Overvalued.”

At the bottom of each column, you’ll find the stock’s name, ticker, score, and rating compiled in a simple graphic. (Note that this is just an example. By the time you’re reading this report, this rating for Deere & Co. will likely no longer be accurate.)

Overall, my Value Meter system favors companies that are producing high levels of cash relative to their net assets while trading at low EVs relative to their net assets − and doing so consistently over time. If a company ranks well in all three categories, that indicates that it’s efficient, cheap, and reliable.

Now, admittedly, my system isn’t perfect.

It clearly prefers asset-heavy companies with ample free cash flows, which are typically mature companies rather than those in the early growth phase.

As a result, it tends to not give positive ratings to fast-growing businesses that are light on capital, some of which turn out to be phenomenal investments. Most growth-focused investors would consider that a huge flaw.

But for anyone seeking a straightforward way to identify potentially mispriced companies, The Value Meter offers a solid start. Its unwavering focus on cash generation, asset value, and consistency can help investors stay grounded.

Value investing is not the only way to build wealth in the markets, but it has proved its merits over many decades. The Value Meter’s aim is to make this timeless strategy more accessible than ever.

The post The Value Meter: Using Common Sense to Find Bargain Stocks appeared first on Wealthy Retirement.

Note: In my latest issue of the Oxford Income Letter, I recommended selling NextEra Energy Partners as I no longer have

confidence it will be able to sustain its dividend growth going forward. It used to be the third pick in this report but I have replaced it with Capital Southwest Corp., an excellent business development company with a colossal yield and an 11-quarter dividend growth streak. Read on to learn more…

When it comes to income investing, in many ways, size doesn’t matter.

After all, many companies that pay out hefty 20% or 30% dividend yields aren’t able to sustain those dividends long term.

Then, investors who hopped on board chasing after the money get hit with a disappointing dividend cut or suspension.

But it’s also true that when you’re building passive income streams, it pays to be selective.

For instance, while you might invest in a stock because it’s poised for growth or a short-term gain, most of the time, a 1% yielder isn’t going to catch your eye…

What income investors want is a sizable, growing dividend.

And I’ve written the book on dividend investing – check out Get Rich with Dividends – so I always have my finger on the pulse of what’s happening in the markets…

Which companies are going to reward their shareholders…

And which will fall flat.

In this report, I’ve assembled three of the safest high-yielding dividend stocks around. I also pull back the curtain on the strategy I use to assess the dividend safety of hundreds of stocks every day for my readers.

Additionally, 2024 was a breakout year for the artificial intelligence (AI) industry in particular and therewill be loads of money to be made investing in that market for years to come. Nvidia is the banner example here, its shares are up 22% at the time of writing.

But any company involved in AI is poised to capture a portion of the $244 billion the industry is set to grow to this year and the $1 tillion it’s set to be by 2031.

The three companies in this report are all involved in this revolutionary industry, directly or indirectly. And each company is poised to profit in its own way.

With these tips – and with three of the market’s safest high-yielders in your portfolio – you’ll become a master of dividend safety.

My Go-To Dividend Safety Assessment Strategy

Before I get into why my top three high-yielding stocks of the moment deserve your attention, it’s important to mention why these have caught my eye.

The first thing that’s really important to me when assessing dividend safety is cash flow. A company should have sufficient cash flow to support its dividend.

Note, I didn’t say it should have sufficient earnings. There’s a big distinction between earnings and cash flow.

The metric “earnings” includes all kinds of noncash items, whereas “cash flow” is really just representative of the cash that came into the company – and therefore is available to pay shareholders.

Here’s a very brief example…

Let’s say a company records a big sale on December 30. It sells $1 million worth of widgets. It can book that sale and include it as revenue, which trickles down to earnings on its year-end results.

But the truth is, the company might not have even sent out an invoice yet, much less gotten paid. Meanwhile, its revenue and earnings have gone up even though it hasn’t taken in any more cash.

Next year when the company sends out that invoice, maybe the customer returns the item. Maybe the customer goes bankrupt, or maybe it just takes a long time to pay. That would drastically affect the cash flow available for the company that made the sale.

That’s why, as a dividend investor, I’m really concerned only with the cash that comes into the company. That’s the cash that’s going to pay my dividend – not earnings, which include noncash items.

It’s also really important to me that a company have a long, reliable track record of dividend payments. I want to invest only in a company that hasn’t cut its dividend – and I’d prefer to invest in a company that has raised its dividend every single year.

Companies that raise their dividends every year for 10 years are termed Dividend Achievers, and companies that raise their dividends every year for 25 years or more earn the prestigious title of Dividend Aristocrat.

A perfect example is PepsiCo (Nasdaq: PEP).

Recently, Pepsi raised its dividend for the 53rd year in a row. That sets the bar pretty high for investors, encouraging them to expect a dividend increase every single year.

After all, what do you think would happen if, after five decades of consistent dividend increases, Pepsi cut its dividend or suspended it altogether?

I think you’d see a disproportionate number of pitchforks and torches at its next shareholder meeting…

In short, a company’s track record, while not a guarantee, is a strong indicator of its dividend safety.

Combined with steady cash flow, a company’s track record gives me confidence in its payout – which is why my three top picks right now bear looking into for any income investor…

3 Safe Yet High Dividend Payers

No. 1: Cogent Communications

The Oxford Income Letter’s 10-11-12 System is based on dividend growth. It’s the lifeblood of the strategy. We need to see a company raise its dividend every year.

Occasionally, we come across a company that boosts its dividend every quarter. That’s even better.

This recommendation pays a robust 5.6% yield. And the company has lifted the payout to shareholders every quarter for almost 10 years.

You use its service every day. And in May of 2022, it landed a sweetheart deal that should ensure revenue and cash flow will continue to grow – and be distributed back to shareholders – for years.

Cogent Communications (Nasdaq: CCOI) operates one of the largest fiber-optic networks for internet traffic in the world. It offers high-speed internet access and data transport services to businesses and carriers, service providers, and content providers.

The company has a low-cost business model of buying “dark” fiber rather than constructing its own. In other words, it buys fiber that is not being used by other companies and turns it on, thereby making that fiber-optic network operational. Its network of almost 300,000 miles of fiber optic cables connects to more than 8,280 locations around the world.

The company carries roughly one quarter of the world’s internet traffic – including for Amazon (Nasdaq: AMZN), Google parent company Alphabet (Nasdaq: GOOGL) and Facebook parent company Meta Platforms (Nasdaq: META). It provides connectivity to 4 billion people, including to Chinese and Indian telecommunication companies.

From 2013 to 2023, Cogent grew by 5.1% annually with no acquisitions – just pure organic growth. But that all changed in May 2023 when Cogent closed on a deal with such favorable terms that it makes the Dutch acquiring Manhattan for $24 look like they got taken to the cleaners.

In 2022, T-Mobile (Nasdaq: TMUS) merged with Sprint. But in order for the merger to get the green light from regulators, T-Mobile had to divest certain assets.

Sprint was essentially ignoring the fiber-optics part of its business. It was focused on being a wireless business and not interested in servicing wired customers. T-Mobile was happy to get rid of it and appease regulators at the same time.

As a result, Cogent acquired 20,000 miles of fiber and 1.3 million square feet of data centers with 44,000 racks (where servers are placed). It also scored more than 1,000 large customers that represent $450 million in revenue, which the company believes could grow to more than $500 million in cash flow in a few years.

The cost?

$1.

It gets even better.

T-Mobile paid Cogent $29 million per month for the first 12 months and then will continue to pay $9 million per month for the following 42 months.

Cogent will take some of that cash and use it to grow the business as well as pay down some debt.

Another positive for Cogent is that in-office work is starting to resume, albeit slowly. At the same time, the greater number of workers who are staying home (at least some days) means more customers need to be able to connect to their companies’ networks and process huge amounts of data.

Thanks to the fiber-optics business it acquired from Sprint, Cogent is still adding customers at a rapid pace…

Indeed, in 2023 the company netted revenue of just over $890 million, up 52.5% over 2022. Net income grew by an astounding 24,646.2% in 2023, totaling $1.27 billion over 2022’s $5.1 million.

And the company has grown considerably since then. 2024 saw its revenues climb to $955 million, just shy of $1 billion and up 7.3% over 2023. In addition, its cash reserves stand at $198 million. Finally, the company is facilitating the rise of AI with technology it also acquired from Sprint in a new and innovative way. Cogent calls it Optical Transport, it’s a dedicated point-to-point fiber-based communication system between two specific locations.

Customers who buy optical transport get dedicated pipes connecting their servers and network between two locations far faster than the internet would be capable of. This would be very useful for a company integrating AI between its offices and data centers.

AI is very data intensive and can be slow if operating off the normal internet. But with dedicated fiber-optic lines, they can operate much faster and more efficiently than ever before. Which is exactly what Cogent is providing here, and it should see the company’s fortunes grow in 2024 and beyond. Speaking of…

A Steadily Growing Dividend

The current quarterly dividend is $1 per share, or $4 annually, which equates to about a 5.6% yield. But Cogent has raised its dividend every quarter for years. In fact, I spoke with CEO Dave Schaeffer. He told me he fully expects to continue quarterly dividend increases.

The yield is pretty large. You’ll enjoy it even more knowing that you’re paying taxes on only a small portion of it.

You see, in 2023 and 2024, 100% of the dividend was considered return of capital.

The year before, more than 77% of the dividend was return of capital. In 2020, return of capital made up 63% of the dividend.

For those who are new to the concept, return of capital is not taxed as a dividend. Instead, it lowers your cost basis.

So if you bought a stock for $20 per share that paid a $1 per share dividend and 80% of it was return of capital, you would pay taxes on only $0.20 per share. The remaining $0.80 would not be taxed as a dividend. Instead, your new cost basis would be lowered to $19.20.

When you sold the stock, you’d pay taxes on the capital gains based on the new $19.20 price rather than $20.

Now, I’m not the only one who believes Cogent is attractive. Its three largest shareholders – BlackRock, Vanguard Group and State Street – are savvy institutional investors.

These whales (big shareholders) like the deal with T-Mobile. They like the underlying business. As do I.

Cogent should continue to generate steadily increasing dividends for shareholders for years to come while growing its business and stock price.

It’s the epitome of a 10-11-12 stock.

Action to Take: Buy Cogent Communications (Nasdaq: CCOI) at market. The stock is currently a position in the Compound Income Portfolio. Because the dividend is mostly tax-advantaged, I recommend holding the stock in a taxable account.

No. 2: Rio Tinto Group

In November 2021, the Bipartisan Infrastructure Law – which commits $550 billion to repairing roads, bridges, mass transit, ports and other infrastructure projects – was signed into law.

The spending bill is the largest investment in bridges since the creation of the Interstate Highway System. These funds will be released over several years, and we’re seeing them be put to work now.

I expect the law to contribute to strong demand for iron ore and other metals. But it won’t just be in the U.S. that demand is strong…

Steel production in China has been trending higher for years. The country’s strict COVID-19 policies caused production to decline. That will likely reverse in a big way going forward, as China has relaxed its restrictions.

Also boosting Chinese demand for steel is a loosening of borrowing rules on Chinese developers. This is being done to bolster the Chinese real estate market. And, importantly, iron ore is the main component of steel.

As a result of the increased demand, the price of iron ore has started to rise after its year-long decline. The tariffs might affect this demand, but China needs iron and Rio Tinto is based in London so it is unlikely to be hindered much by an American and Chinese trade war.

We’re going to play the increase in demand and price for iron ore and other metals with Rio Tinto Group (NYSE: RIO).

Mining for Even Bigger Gains

London-based Rio Tinto operates in 35 countries. It produces iron ore, copper, aluminum and other materials.

In March 2023, Rio Tinto started production from the Oyu Tolgoi mine in Mongolia The mine is two-thirds owned by Rio Tinto and one-third owned by the government of Mongolia. When the mine reaches full production, it will boost Rio Tinto’s copper production by 43%.

Copper prices are likely to rise significantly in the future. BHP Group (NYSE: BHP) CEO Mike Henry said copper supplies were not sufficient to meet demand over the long term. And Freeport-McMoRan (NYSE: FCX) CEO Richard Adkerson said copper prices didn’t reflect a “strikingly tight” physical market.

Aluminum is another growing market, in part thanks to car manufacturing. Aluminum makes vehicles lighter and therefore reduces greenhouse gas emissions.

Rio Tinto has 14 aluminum smelters in Canada, Australia, New Zealand, Iceland and Oman.

Russia is the second-largest exporter of aluminum, behind Canada. With bans on importing Russian goods, a meaningful chunk of the available supply is no longer in the market, which means prices should rise if increasing demand is chasing decreasing supply.

And the company’s introduction of AI into its mining operations should accelerate the profit from that considerably. Rio Tinto’s MAS or Mine Automation System works like a network server application that pulls together data from 98% of its sites, mining it for information.

It then displays that data using RTVis or Rio Tinto Visualization which in turn can be used to automate functions in the company’s mines, making them safer and more efficient in one stroke.

Let’s Look at the Numbers

Rio Tinto has a solid balance sheet.

While it has $11.7 billion in current total debt on its books, it also has $8.87 billion in cash. Not to mention it generated about $5.9 billion in free cash flow for 2024. I don’t mind debt when a company could write a check to pay it all off.

Additionally, the company’s dividend is variable. Rio Tinto pays out 40% to 60% of its earnings in dividends, and earnings will fluctuate due to metals prices. The dividend is paid twice a year.

The ex-dividend dates are typically in March and August, with payments made in April and September.

Right now, Rio Tinto pays a dividend of $4.00 per share which yields 6.8% at current prices. However, looking ahead, I expect earnings to be stronger than Wall Street anticipates, due to soaring metals prices. That could easily push the yield higher.

Analysts are not particularly bullish on the stock. That’s fine with me, as analysts are notoriously late to the party.

Rio Tinto is an excellent way to get exposure to the insatiable demand for metals that will occur over the next decade while also earning a strong yield.

Action to Take: Buy Rio Tinto Group (NYSE: RIO) at market. I suggest holding it in a tax-deferred account if possible. Place a 25% trailing stop below your entry price.

No. 3: Capital Southwest

It’s not often you can invest in a 60-year-old business that is extremely lean with only 33 employees, yields 11% and is a regular dividend raiser… But my next pick has all of those qualities and then some!

Even better, the company is considered very safe, has low debt and is committed to paying its dividend!

Now, I am not someone who throws around exclamation points willy-nilly, or pell-mell for that matter.

They lose their effectiveness with overuse. But in this case, the exclamation points above were warranted. After all, it’s hard not to be excited about a stock with a very high yield that boosts its dividend every year! (See, there I go again.)

Capital Southwest Corp. (Nasdaq: CSWC) is a small cap business development company (BDC) that lends money to businesses that have a minimum of $3 million per year in EBITDA (earnings before interest, taxes, depreciation and amortization), which is a proxy for cash flow.

In other words, Capital Southwest’s borrowers aren’t struggling.

The company has a $1.8 billion portfolio, 97% of which is first lien senior secured debt. That means Capital Southwest is first in line among other lenders to get paid, and the debt is backed by collateral.

Capital Southwest has a well-diversified portfolio, with business services and media/marketing being the largest industries served at just 13% each, followed by healthcare services at 11%. The average position makes up just 1.2% of the portfolio.

There are dozens of companies in the portfolio, including…

• Intero Digital, a marketing firm
• Summer Discover, an education company
• Jackson Hewitt Tax Service
• Zips Car Wash

• The portfolio is performing incredibly well too. Capital Southwest earns an average of 13.7% on its investments. And it generates loads of cash that is used to pay dividends.

Net investment income (NII), the money the company makes from its loans and investments, has grown a staggering 111% since 2015.

That is likely to continue, as the economy is stronger than anyone predicted. The rate of inflation is tapering off, it lowered to 2.4% in September. I expect this trend to continue moving forward. A 10% Yield and Going Higher?

Capital Southwest pays a regular quarterly dividend that is often accompanied by what it calls a supplemental dividend. It has also occasionally paid a special dividend.

While management consistently increases the regular dividend, when profits are left over, it pays out a supplemental dividend. BDCs are required to pay 90% of their net income in dividends.

Management is committed to each type of dividend. On the most recent company conference call, CEO Bowen Diehl stated, “It is our intent and expectation that Capital Southwest will continue to distribute quarterly supplemental dividends for the foreseeable future.”

Over the past three years, the dividend has grown at a compound annual rate of 9.3%.

Keep in mind that the nearly double-digit yield is based only on the regular dividend. The supplemental and special dividends are bonuses. So we should be able to rely on a double-digit total yield for years to come.

It’s rare to find a double-digit yielder that is so healthy and is growing the dividend. The yield alone will almost immediately satisfy the requirements of the 10-11-12 System (whose goal is to generate 11% yields within 10 years) and the Compound Income Portfolio (whose goal is to achieve 12% average annual total returns over 10 years with dividends reinvested).

Action to Take: Buy Capital Southwest Corp. (Nasdaq: CSWC) Place a 25% trailing stop The stock should be held in a tax-deferred account if possible.

Don’t Get Caught by Surprise

Now you see why I don’t look for only the largest dividend payers…

Successful income investors will look to the companies with the most generous and sustainable payouts.

And as I explained above, they can judge their holdings’ dividend safety by taking a look at the companies’ cash flow metrics and track records.

Each week in my free e-letter, Wealthy Retirement, I analyze the dividend safety of a company based on reader requests.

And now that you’ve seen a few of the tricks up my sleeve, you’ll be able to ensure that your favorite dividends also stay secure.

The post Three Extreme Dividend Stocks appeared first on Wealthy Retirement.

Marc Lichtenfeld
Marc Lichtenfeld is the Chief Income Strategist of The Oxford Club. After getting his start on the trading desk at Carlin Equities, he moved over to Avalon Research Group as a senior analyst. Over the years, Marc’s commentary has appeared in The Wall Street Journal, Barron’s, and U.S. News & World Report, among others. Prior to joining The Oxford Club, he was a senior columnist at Jim Cramer’s TheStreet. Today, he is a sought-after media guest who has appeared on CNBC, Fox Business and Yahoo Finance.

His first book, Get Rich With Dividends: A Proven System for Earning Double-Digit Returns, achieved bestseller status shortly after its release in 2012 and was named Book of the Year by the Institute for Financial Literacy. It is currently in its second edition and is published in multiple languages. In early 2018, Marc released his second book, You Don’t Have to Drive an Uber in Retirement: How to Maintain Your Lifestyle without Getting a Job or Cutting Corners, which hit No. 1 on Amazon’s bestseller list.

Marc is the Senior Editor of The Oxford Income Letter, which is based on his proprietary 10-11-12 System. He is a leading member of Oxford Centurion‘s Centurion Advisory Board. He is also the Editor of Technical Pattern Profits, Trigger Event Trader, Weekly Income Alert, and Oxford Bond Advantage.

Forever Dividend Stocks are stocks you’ll likely want to hold forever. When you reinvest the dividends, you will generate enormous and safe returns thanks to compounding. And when it’s time to collect the income, you’ll have more than you thought possible from a one-time investment (of course, if you continue to invest, you’ll have even more income).

In this report, I’ll uncover my six favorite dividend stocks that have been hand-selected from my Compound Income Portfolio – a foundational portfolio of The Oxford Income Letter.

The Compound Income Portfolio is designed for wealth seekers. This portfolio uses the immense power of dividend reinvestment plans (DRIPs) to compound dividends and grow wealth in a conservative manner.

The concept is very simple…

If you buy 1,000 shares of a $10 stock and receive a 4% yield, and that $400 (4% of $10,000) is reinvested… at the end of one year, you’ll have 1,040 shares (if the price of the stock stayed the same at $10). Those extra 40 shares will also generate dividends.

If the dividend grows 10% per year, after five years, you’ll have 1,275 shares.

After 10 years, you’ll own 1,881 shares. Keep in mind that all those shares will generate more and more dividends every year as the dividend goes higher.

Check out the compounding math. It’s mind-blowing.

If you achieve just the average market return, after 10 years, your original $10,000 will be worth $34,606. The annual yield on your DRIP will be 13.2%.

After 15 years, you’ll have $65,674 (and a yield of 28.4% on your original investment).

In 20 years, you’re looking at $126,446… and an astounding annual yield of 58.3%!

The easiest way to reinvest your dividends is to simply tell your broker you want your dividends reinvested. Most brokers offer this service free of charge. So you can buy a stock once, pay one (or no) commission and hold the stock for years without paying another dime as your nest egg grows.

One thing to remember: If the stocks are in a taxable account, you will owe taxes on the dividends even if you are reinvesting them and not collecting the cash. So be sure to have enough cash set aside to pay your taxes every year.

Now that I have covered the power of compounding, let’s get to the picks…

Forever Dividend Stock No. 1: Enterprise Products Partners LP (NYSE: EPD)

My first pick is a leading North American provider of midstream energy services. It is an integrated provider of processing and transportation services to producers of natural gas liquids (NGLs) and consumers of NGL products.

Enterprise Products Partners generates most of its revenue from connecting producers of natural gas and NGL products with domestic and international consumers. And that revenue has been growing. In 2024 it topped $56.2 billion, up 13.1% over 2023. Revenue for Q1 2025 (the most recently reported quarter) continued that growth trend. It hit $15.4 billion, up 4.5% over Q1 2024. That sort of growth and financial health is good for its dividend. Speaking of… It has increased its annual payout every year since it began paying a distribution in 1998 (partnerships pay distributions, not dividends). The company grows its annual distribution regularly and it currently stands at $2.00 It has a payout ratio of 79.6%, and it currently has an annual distribution yield of 6.6%.

Note that a distribution is not exactly the same as a dividend, especially when it comes to taxes. A distribution often consists of return of capital, which is not taxed as a dividend. In fact, it is not taxed at all in the year it is received. Instead, it lowers your cost basis and you pay capital gains tax when you sell the stock (assuming you sell for a profit).

Partnerships like Enterprise Products Partners send K-1 tax documents instead of 1099-DIV forms like other dividend payers. These K-1s can sometimes be a hassle, and your accountant may charge you more to handle them.

Forever Dividend Stock No. 2: Gilead Sciences (Nasdaq: GILD)

Our second pick is a pharmaceutical company that pays a 3.51 yield and has a decade-long history of annual dividend increases.

Gilead Sciences (Nasdaq: GILD) is the pharmaceutical giant behind HIV drug Biktarvy. That drug’s sales rose 7% to $3.1 billion in the first quarter of 2025. What’s more, another HIV management drug made by Gilead, Descovy, saw its sales surge 38% year over year in the first quarter of 2025.In all, the company tallied up revenues of $6.7 billion for the latest quarter, Q1 2025. Operating income for Q1 2025 grew 11.5% year over year to 2.6%. In addition, the company holds $8.71 billion in cash…

But back to Biktarvy for a moment. It’s Gilead’s top HIV drug,roughly 50% share of the HIV treatment market and has posted over 2 years of year-over-year market share gains. Six out of 10 new HIV patients starting therapy are put on Biktarvy.

But Gilead hasn’t just weakened the effects of HIV. It’s also developed medications to prevent it − including Sunlenca, the only twice-a-year subcutaneous preventive HIV drug, and Descovy, which I mentioned earlier, claims 40% of the HIV prevention market.

There are still roughly 1.2 million people in the U.S. living with HIV today, but barring other health issues, they can now expect to live just as long as people who don’t have HIV − thanks in large part to Gilead. But that’s just one drug and one disease. The company has also done something similar with the hepatitis C virus.

In all, the company has more than 2 dozen drugs on the market and 58 more in development. Those drugs fuel the company’s $3 per share annual dividend which yields 3.1% at current prices.

Gilead is the perfect example of why I love investing in healthcare companies. While it’s important not to fall in love with a stock and abandon your investing discipline, it feels good to invest in companies that are saving lives.

And thanks to its drug pipeline, its track record of dividend growth and its current valuation, Gilead is a healthy addition to any income investor’s portfolio.

Forever Dividend Stock No. 3: Innovative Industrial Properties (NYSE: IIPR)

Up next is Innovative Industrial Properties (NYSE: IIPR).

Innovative Industrial Properties is a real estate investment trust, or REIT, that leases its 110 properties to 31 state-licensed cannabis operators in 19 states. Its top three tenants are Ascend Wellness Holdings (OTC: AAWH), a New York-based grower and retailer; Green Thumb Industries (OTC: GTBIF), which is headquartered in Chicago and operates nearly 100 dispensaries in 14 states; and PharmaCann, a privately owned cultivator and dispensary operator.

Since PharmaCann is privately held, its financial data is not available, but Innovative Industrial’s top three publicly traded tenants are all free cash flow positive.

Innovative Industrial’s initial leases generally last 15 to 20 years (versus just five years for traditional industrial leases), and they have built-in annual increases, which provide opportunities for long-term cash flow growth.

The company’s dividend stands at an astounding $8 per share annually with a yield of 13.3% at current prices. And that dividend has grown at a CAGR of 17.6% over the past five years.

Innovative Industrial Properties is a low-risk way to play the marijuana space, which is gaining momentum as it becomes more widely accepted by citizens and governments alike. The company is generating more and more cash each year and returning it to shareholders in the form of a strong and growing dividend.

This stock should “smoke” the market in the years to come

Forever Dividend Stock No. 4: AbbVie (NYSE: ABBV)

AbbVie is another long-term dividend pick.

The company is a global pharmaceuticals maker. Its two bestselling drugs are Imbruvica and Humira.

Imbruvica treats chronic lymphocytic leukemia, mantle cell lymphoma and Waldenström macroglobulinemia, another form of lymphoma. Imbruvica is also being studied in other cancers and is expected to become one of the bestselling cancer drugs ever.

In 2023, Imbruvica generated $3.3 billion in revenue.

And AbbVie’s bestselling drug, Humira – which treats rheumatoid arthritis, psoriasis and Crohn’s disease – is the bestselling drug in history. It logged $8.9 billion in sales last year.

In all, 2024 saw revenues top $56.3 billion, up 3.7% over 2023. And the company is off to a good start in 2025. For Q1, the most recently reported quarter, revenues topped $13.3 billion, up 8.4% over Q1 2024. Revenues are looking up so AbbVie should continue the 5.6% annualized dividend growth it has managed over the last three years. The company has raised its dividend for 53 years in a row.

The company is currently paying a healthy 3.5% yield and has a 271% payout ratio.

Forever Dividend Stock No. 5: RTX (NYSE: RTX)

Formerly known as Raytheon Technologies, RTX provides a wide range of defense products and services, from electronics systems to missile systems. It manufactures the same kind of forward-looking infrared imaging technology that Boston authorities used to apprehend the Boston Marathon bombers.

RTX’s biggest customer by far is the United States government. But its international business has been growing. The company has a $2.4 billion contract to provide Qatar with Patriot air and missile defense systems.

The world isn’t getting any safer, and it’s hard to imagine the United States or any other government cutting back on defense spending. It has led to a revenue tear for RTX over the past few years. In 2022 revenues grew 4.2% year over year. In 2023, revenue grew 2.8%. And in 2024 it grew a staggering 17.1% to $80.7 billion. And that in turn means huge cash flows for RTX…

Though it’s not the highest yielder at 2%, it raises its dividend regularly. As a result, it can easily be called a Forever Dividend Stock.

Forever Dividend Stock No. 6: Eaton (NYSE: ETN)

Sporting a 1.4% dividend yield that has grown at a CAGR of 7.7% over the past 3 years, Eaton is the perfect setup for income seekers. Eaton produces equipment that helps customers manage power more efficiently. It’s a huge business that includes more than 94,000 employees across 60 countries and customers in 175 countries.

It makes flight control systems, beverage distribution tubing, switches for keypads and thousands of other products. Business is booming too as the company has been on a steady revenue growth streak since Q3 2022. In 2024 revenues topped $24.9 billion, up 7.3% over 2023. And in the latest quarter, Q1 2025, revenue topped $6.4 billion, up 7.3% over Q1 2024. The company has increased its quarterly dividend by an average annual rate of roughly 7.7% over the last three years, and it pays out 38.8% of its earnings in dividends, indicating a healthy and sustainable payout ratio.

Eaton has paid a dividend every year since 1923, and considering the company’s cash flow growth estimates, it should continue increasing its dividend for the next several years.

After all, the company has raised its dividend 16 years in a row.

Importantly, its dividend involves a special tax treatment…

Eaton is based in Dublin, Ireland. Typically, U.S. investors would have foreign taxes withheld from their dividend payments and then would apply for the foreign tax credit from the IRS.

However, Eaton’s dividend does not have foreign tax withheld from it if you live in the U.S.

Additionally – and this is a very attractive feature – like a partnership’s distribution, Eaton’s dividend is mostly considered return of capital. That means most investors will not be taxed on it. Instead, it will lower their tax basis.

The Cure for Stock Market Volatility

Dividend stocks are the cure for stock market fear and volatility. While most investors bite their nails fretting about what the market will do in the coming days, weeks and months, you can sit back and collect your dividends with little worry – except what you are going to do with your increasing amount of income (a problem anyone would like to have).

The six stocks mentioned above have an average yield of 4.9% and regularly raise their dividends. And as I mentioned before, the powers of reinvesting your income and compounding dividends will boost your annual dividend yield even higher.

Remember, these are not short-term picks. They are long-term holds, and all of them should be able to maintain high dividend payments over the long haul.

I’m confident that these Forever Dividend Stocks will help you create the wealthy retirement you’ve always dreamed of.

Good investing,

Marc Lichtenfeld
Chief Income Strategist, The Oxford Club

P.S. If you’re looking for a safer way to profit from the oil boom without buying regular oil and gas stocks, look no further. Today I’ll show you how to collect monthly income directly from the Permian Basin.

Bloomberg reports that the Permian is “uniquely positioned to become the world’s most important growth engine for oil production.”

While it’s the largest oil basin in the United States, only 37% of its wells have been tapped. So the lion’s share of its growth is ahead of it.

And you can get your share of this growth today.

The post Forever Dividend Stocks appeared first on Wealthy Retirement.

In recent months, the stock market has become a rollercoaster ride. Inflation remains sticky, interest rates are uncertain, and geopolitical tensions are rising. One bad economic report or unexpected news event can trigger a sharp pullback in major indexes — and retail investors are feeling the pressure.

If you’re worried about protecting your gains, limiting losses, or even profiting during downturns, you’re not alone.

But here’s the good news: you don’t have to sit on the sidelines or panic sell your portfolio. You can hedge your positions or profit from market drops using tactical tools like inverse ETFs — specifically, the ProShares Short S&P 500 ETF (SH) and the ProShares UltraShort S&P 500 ETF (SDS).

What Are Inverse ETFs – And Why Do They Matter?

Inverse ETFs are designed to deliver the opposite daily return of a specific index. In simple terms: when the market goes down, inverse ETFs go up.

• These ETFs use derivatives and other instruments to generate gains when the market falls.
• They are often used by traders or investors who want to hedge their portfolios without selling their core holdings.
• Unlike shorting stocks, which involves borrowing shares and carries unlimited risk, inverse ETFs can be bought and sold like regular stocks or ETFs.

In this case, SH and SDS track the S&P 500 in reverse, allowing you to play defense (or even offense) in a declining market.

SH vs. SDS: Know the Difference

ProShares Short S&P 500 ETF (SH)

• Seeks to deliver -1x the daily performance of the S&P 500.
• Ideal for investors who want to moderately hedge or position for market weakness without taking on high leverage.
• Lower volatility compared to SDS.

ProShares UltraShort S&P 500 ETF (SDS)

• Seeks to deliver -2x the daily performance of the S&P 500.
• Designed for aggressive, short-term positioning in response to sharp market declines.
• Carries higher potential upside — and higher risk.

Think of SH as the seatbelt, and SDS as the airbag. Both can help in a crash, but one is more forceful and should be used carefully.

When Do These ETFs Shine?

These ETFs are particularly useful during:

• Bear markets – When the S&P 500 is trending downward for an extended period.
• Sharp corrections – Fast 5–10% drops in response to interest rate hikes, earnings misses, or political events.
• Black swan events – Unexpected shocks like COVID-19, the 2008 financial crisis, or geopolitical escalations.
• Earnings seasons – When volatility spikes and markets react sharply to corporate performance.
• Hedging periods – When you want to protect gains but don’t want to sell your long-term holdings.

Rather than trying to time when to sell or go to cash, adding a small position in SH or SDS can give your portfolio downside protection without disrupting your strategy.

Why Hedge with Inverse ETFs Instead of Going to Cash?

Going to cash feels safe — but it’s not always smart.

• Market timing is hard: Most investors miss the best recovery days, which often happen right after big drops.
• You lose compounding: Staying in cash means you’re out of the game.
• No upside potential: Cash can’t grow — inverse ETFs can gain when markets fall.

SH and SDS give you a way to stay in the market, remain tactical, and even profit when things get rocky.

Real-World Examples: When SH and SDS Delivered

Let’s take a look at how these ETFs performed in past downturns:

COVID Crash – March 2020

• The S&P 500 fell more than 30% in just weeks.
• SH gained roughly 25% in that period.
• SDS more than doubled SH’s return, climbing around 50%+ in just days — ideal for tactical traders.

2018 Q4 Correction

• Amid Fed tightening and trade war fears, the S&P 500 dropped ~14%.
• SH returned over 10%, while SDS surged around 20%, capturing double the downside in a highly volatile quarter.

2008 Financial Crisis

• While long-only investors were decimated, inverse ETFs like SH and SDS provided a way to limit exposure or even generate gains during the crash.

These ETFs are not just for doomsday prep — they’re real tools for real moments of risk.

Know the Risks – Especially with Leverage

Inverse ETFs aren’t magic bullets. You need to know the downsides:

• Daily reset risk: These ETFs reset daily, which means performance can deviate over time in choppy markets.
• Compounding risk: Especially for SDS, longer holding periods can lead to unintended results if the market is volatile but ultimately flat.
• Not for buy-and-hold: SDS, in particular, is best for short-term trades or hedging, not long-term holding.

SH is generally safer for longer hedging periods, while SDS is for high-conviction, short-term market declines.

Use limit orders, set stop-losses if needed, and understand what you’re buying.

Conclusion: Stay One Step Ahead of the Market

Markets don’t go up in a straight line — and you shouldn’t invest that way either.

When uncertainty rises, ProShares SH and SDS offer tools to defend your portfolio, limit downside, or even profit while others panic.

• SH is your steady hedge — giving you peace of mind without wild swings.
• SDS is your powerful play — when you see a big move coming and want to act fast.

Both ETFs can be valuable tactical additions to your investment strategy — especially in today’s environment of rising volatility and economic uncertainty.

Don’t just watch the market drop — be ready to act.

The post Protecting Your Portfolio in Volatile Markets: Why SH and SDS Could Be Strong Buys Right Now appeared first on Wealthy Retirement.

Marc Lichtenfeld
Marc is the Senior Editor of The Oxford Income Letter, which is based on his proprietary 10-11-12 System. He is a leading member of Oxford Centurion‘s Centurion Advisory Board. He is also the Editor of Technical Pattern Profits, Trigger Event Trader and Oxford Bond Advantage.

Marc Lichtenfeld is the Chief Income Strategist of The Oxford Club. After getting his start on the trading desk at Carlin Equities, he moved over to Avalon Research Group as a senior analyst. Over the years, Marc’s commentary has appeared in The Wall Street Journal, Barron’s, and U.S. News & World Report, among others. Prior to joining The Oxford Club, he was a senior columnist at Jim Cramer’s TheStreet. Today, he is a sought-after media guest who has appeared on CNBC, Fox Business and Yahoo Finance.

His first book, Get Rich With Dividends: A Proven System for Earning Double-Digit Returns, achieved bestseller status shortly after its release in 2012 and was named Book of the Year by the Institute for Financial Literacy. It is currently in its second edition and is published in multiple languages. In early 2018, Marc released his second book, You Don’t Have to Drive an Uber in Retirement: How to Maintain Your Lifestyle without Getting a Job or Cutting Corners, which hit No. 1 on Amazon’s bestseller list.

As an undergraduate a million years ago, I sat in the front row, eagerly anticipating my first econ class. The professor confidently told the room full of freshmen, “If supply decreases and demand increases, price increases.”

Whoa!

It’s a simple idea, I know. But to a 17-year-old who had never studied economics before and whose work experience was limited to shoveling driveways every winter and spending four months in a tuxedo store, it was a groundbreaking concept.

I learned a lot in college, but that one notion stuck with me − perhaps more than any other.

It is also the foundation of my recommendation in this report, which I expect to move much higher in the coming years and which has the potential to yield more than 5% per year.

I am very bullish on the energy sector. I expect supply could be restricted and demand could increase for oil and natural gas.

But that dynamic is even more prominent in uranium, the fuel used for nuclear power.

It’s no surprise that demand for uranium is strong.

One uranium pellet measuring three-eighths of an inch in diameter and five-eighths of an inch in length provides as much energy as 17,000 cubic feet of natural gas, 149 gallons of oil or 1 ton of coal.

And nuclear power is so cheap and clean that it is perhaps one of the few topics that Republicans and Democrats agree on these days.

You can see in the chart below that nuclear power produces less carbon dioxide than solar power, geothermal power or hydropower. It emits the same amount as offshore wind power and only slightly trails onshore wind power.

Thanks to nuclear power’s efficiency and its environmental benefits, the sentiment surrounding it is shifting both in the U.S. and abroad.

In the Inflation Reduction Act, President Joe Biden provided incentives for companies that develop nuclear energy capabilities, including offering tax breaks for existing nuclear plants.

Last year, members of the European Union recommitted to using nuclear power to help achieve their climate goals. And France pledged 100 million euros to spark its nuclear industry.

China, India and Russia are also very pro-nuclear. China plans to generate 400 gigawatts of nuclear energy by 2060, more than all of the world’s current nuclear power plants combined. That means in the next 36 years, uranium demand from China alone will grow sevenfold.

Even California will continue to operate its Diablo Canyon nuclear power plant until 2030, five years past its planned shutdown. Diablo provides 8% of the state’s electricity.

And Japan, which once pledged to completely abandon nuclear power as a result of the 2011 Fukushima disaster, adopted a plan in late 2022 to extend the life span of its nuclear reactors and replace old reactors with new ones.

So clearly demand is skyrocketing.

But, unfortunately, supply will not even come close to keeping up.

As is the case with oil, the United States imports a significant amount of uranium from countries that are not particularly aligned with our interests. Though Russia isn’t a big uranium miner, it enriches about 50% of the world’s uranium. The U.S. gets 14% of its enriched uranium from Russia, and Europe is even more dependent, getting around 30% of its supply from Russia.

Just as tensions in the Middle East could restrict the supply of oil, tensions in Russia and Ukraine are threatening to restrict the supply of uranium.

On top of that, the world’s largest uranium miner, Kazakhstan-based Kazatomprom, recently said it will not meet its production goals over the next two years. The company accounts for 20% of the world’s uranium production.

Over the next 10 years or so, there will be a 60 million-pound shortage of triuranium octoxide, which is the primary component of the “yellowcake” that is used in nuclear reactors. That’s about the same amount that Kazakhstan produces in a year, and Kazakhstan produces three times as much as second-place Canada.

And while new mines might eventually alleviate some of the shortfall, it takes roughly 10 to 15 years for new projects and enrichment facilities to become operational.

By 2035, the supply deficit will be acute. Supply is expected to be 114 million pounds of uranium concentrate, while demand will be 209 million pounds.

Adding to the demand are the 60 nuclear plants that are under construction around the world and the additional 110 that are being planned. There are currently 436 nuclear power plants in operation worldwide.

Because the imbalance between supply and demand is so severe, I expect uranium to be a fantastic long-term hold. However, there aren’t a lot of uranium stocks, and it’s even harder to find one with a strong dividend yield.

But my top energy ETF for 2025 is unusual in that it doesn’t pay a solid regular dividend.

To be clear, you’ll still receive income. The dividend varies widely from year to year, but based on last year’s dividend, the yield is 5.7%.

The Global X Uranium ETF (NYSE: URA) tracks a uranium and nuclear power index. Its top holding is Cameco (NYSE: CCJ), which makes up 23% of the portfolio, but most of its holdings are traded on foreign exchanges. I like the diversification this exchange-traded fund (ETF) offers and the potential for its yield to get even bigger.

The fund usually pays out one small dividend and one larger dividend each year. In 2023, it declared a total of $1.68 per share in dividends. In 2022, it declared just $0.15. But in 2021, the figure was $1.33. The higher the price of uranium goes, the better the portfolio performs ­– and the more likely we are to receive a strong dividend payout.

I expect the ETF to again produce a nice dividend yield in 2025.

But keep in mind that this isn’t a typical dividend play where a company produces lots of cash flow to fund a continually increasing dividend. This is more speculative, as the performance of the ETF depends heavily on uranium prices.

In the short term, if the commodities market doesn’t cooperate, the dividend may be tiny and the price of the ETF could be volatile. But long term, due to booming demand and a massive shortage in supply, uranium is a slam dunk.

Action to Take: Buy the Global X Uranium ETF (NYSE: URA) at the market. Place a 25% trailing stop below your entry price.

The post No. 1 Energy ETF for 2025 appeared first on Wealthy Retirement.

The central bank’s two rate cuts marked the end of the rate-hiking cycle that began in March 2022, when inflation was approaching a more than 40-year high.

So, now that we’ve entered a rate-cutting environment, what stocks are likely to do well? Here are the top three sectors I expect to outperform during this new era.

1. Real estate investment trusts
   Real estate investment trusts, or REITs, are companies that buy real estate properties and rent them out to tenants. But these businesses don’t just buy houses or offices. They also own retail centers, healthcare facilities… even shelf space in data centers.

A stock that I’ve held in the Oxford Income Letter portfolio for a long time – and that I still recommend – is Four Corners Property Trust (NYSE: FCPT).

A former spinoff from Darden Restaurants (NYSE: DRI), Four Corners owns a ton of restaurant real estate, much of which it leases to Darden eateries. However, the company has expanded significantly in recent years, now holding properties in auto service, medical retail, and other retail as well.

Four Corners’ adjusted funds from operations, which is the measure of cash flow used by REITs, has been steadily rising, enabling the company to hike its dividend for eight years in a row. The stock now pays a 5.1% (and growing) yield.

2. Homebuilders
   There are not enough houses to meet demand in the U.S. The shortfall is staggering. It is estimated that we would need 7 million new homes in order to catch up with demand.

And demand could soon increase even more. As interest rates fall, mortgages will become more affordable. If the 30-year fixed rate mortgage (which is currently averaging about 6.7% nationwide) dips closer to 6%, I believe we’ll see a rush of new homebuyers.

Furthermore, on his first day back in office, President Trump signed an executive order directing the heads of all government departments and agencies to “[pursue] appropriate actions to lower the cost of housing.”

So demand could be set to increase significantly, while supply is still tight.

I particularly like homebuilders that are catering to first-time buyers, as first-time buyers will likely be the most ready to make the leap to a new home in the coming year.

Century Communities (NYSE: CCS) focuses on the entry-level market. In the company’s own words, this allows it to “target the broadest potential pool of customers.”

Century had a down year in 2023, which is not entirely surprising given that interest rates were rising for most of 2022 and 2023. Last year, however, the company’s numbers rebounded strongly.

Revenue in the first half of the year grew by 24% year over year, while earnings grew 75%. Wall Street predicts robust 15% earnings growth in 2025.

The stock trades at just six times earnings – well below the sector median of 17.6.

It also pays a small dividend.

3. Utilities

Utilities tend to perform well when rates fall. This is because they borrow a lot of money, and falling rates mean lower interest expenses.

The chart below shows the inverse relationship between interest rates (as measured by the 10-year Treasury yield) and the performance of the S&P 500 Utilities index.

Utilities’ strong dividend yields also become more appealing as rates decline, because low rates make it more difficult to find meaningful yields elsewhere.

Duke Energy (NYSE: DUK) is based in North Carolina and delivers power to 8.4 million customers in seven states. It has one of the largest electricity transmission systems in the country.

Other than the pandemic year of 2020, revenue has been steadily growing since 2015. In 2024, profits were the highest they’ve been in at least a decade.

This is a very well-run company that sports a 3.5% yield.

Generally speaking, falling rates are good for the stock market, and I expect these sectors and individual stocks to do particularly well.

The post Top 3 Stocks for Falling Interest Rates appeared first on Wealthy Retirement.

The unique fund I’ve just uncovered has been paying  a whopping 10% dividend yield practically all year, thanks to the high-tech artificial intelligence investments in its holdings.

(As of this writing the yield sits at 9.2% because the stock price has risen over 20% in 2024).

So when you invest, you’re getting not only an ultra-high yield but also the potential for breakout growth with THE biggest income opportunity of our lifetimes… AI.

Today there are more than 3,000 publicly traded assets on the market that pay dividends. But precious few of them pay high yields.

They’re fine, but they’re nothing to write home about.

But this dividend payer will expose you to a broader swath of the AI market than you’d be able to achieve by investing in individual stocks. And you’ll earn a huge yield while doing so.

This near double-digit AI income play is called Neuberger Berman Next Generation Connectivity Fund (NYSE: NBXG), and it’s the ultimate set-it-and-forget-it AI play.

A Straightforward Industry Play

Funds like Neuberger Berman are pretty straightforward. By investing your money in shares of the fund, you’re entrusting the managers of the fund to invest with a much larger pool of money than any one individual investor could.

These three managers have invested in some of the finest AI stocks on the market. For example, the fund has invested in Monolithic Power Systems, which makes chips aimed at improving energy efficiency for AI systems.

The fund holds positions in Texas Instruments and Taiwan Semiconductor Manufacturing Co., which puts it at the forefront of semiconductor production. Semiconductors are the basis of nearly all computer hardware that we rely on daily, and those companies are two of the most prominent manufacturers of them.

Advanced Micro Devices processors are found in over 35% of new devices. It’s the only real competitor to Intel, and the gap in market share between them has been narrowing since 2016.

Nvidia, on the other hand, has become one of the biggest tech companies in the world, arguably bumping Netflix out of the “N” spot in FAANG. Its processors and advanced graphics cards are used in everything from autonomous driving features in cars to high-end gaming PCs to crypto mining rigs.

And those are just five of the roughly 60 positions in the fund’s $1 billion portfolio right now. Despite the fund’s focus on technology and AI in particular, it’s well diversified within the technology field.

The fund has been on a rally this year, driven by secular forces building behind technology and AI in the market. And those forces aren’t going anywhere anytime soon. The fund is up 19.49% year to date.

AI is set to impact industries such as finance, manufacturing, retail, transportation, government, healthcare and education, among others.

The AI market itself is set to be worth over $826 billion by the end of the decade. McKinsey & Company predict AI technology could add $2.6 trillion to $4.4 trillion in economic benefits annually.

And the Neuberger Berman Next Generation Connectivity Fund is the best way to expose your portfolio to as much of that trend as possible as easily as possible.

But the other reason you’ll want this one in your portfolio is its incredible dividend…

A Closed-End Fund

The Neuberger Berman Next Generation Connectivity Fund is a closed-end fund, which is different from a mutual fund.

Let me explain.

When you buy or sell a mutual fund, the price is the fund’s net asset value (NAV). So if a fund has 10 million shares outstanding and the value of its holdings is $100 million, the NAV is $10 per share. Anyone who buys the fund on the day the fund is worth $10 per share will pay $10 per share.

If the next day the value of its holdings increases to $150 million, the NAV will be $15, and that’s the price all buyers and sellers will pay or receive.

A closed-end fund is different. It trades like a stock, based on supply and demand.

So if we have the same parameters – 10 million shares with a portfolio worth $100 million, the NAV would be $10 per share. But the price of the fund could be anything, depending on supply and demand. If the closed-end fund is in high demand, the price could be $10.50, which would be a 5% premium to the NAV. In other words, a buyer would be paying $1.05 for every $1 in assets.

Sometimes funds trade at discounts. Though the NAV is $10, the fund may be trading for $9, a 10% discount. If that’s the case, the buyer or seller will be trading the fund at $0.90 on the dollar.

A closed-end fund can generate profits or losses for shareholders based on both the NAV and the premium or discount.

If an investor buys the fund with the $10 NAV at a 10% discount, they pay $9. If the NAV rises to $11 and the discount stays at 10%, the fund will trade at $9.90 – a gain of $0.90 per share on the original investment.

You could have a situation where the NAV doesn’t move but the discount shrinks or increases. If the NAV stays at $10 but the discount shrinks to 5%, the fund will trade at $9.50, and the investor will have a gain even though the value of the fund didn’t increase.

Of course, the opposite happens if the discount gets larger.

And if the NAV increases and the discount shrinks, you can supercharge your returns.

As I write this, the Neuberger Berman Next Generation Connectivity Fund trades at a 12.39% discount. In other words, you are paying $0.88 for $1 worth of assets – a screaming bargain.

The Big Yield

Typically, tech stocks don’t pay big dividends. And while some of the AI-related stocks in the portfolio do, the yields don’t approach 10%. So how does the fund achieve such a high yield?

Neuberger Berman Next Generation Connectivity Fund sells options – mostly covered calls to generate more income. The extra income from the calls provides a nice buffer when the market doesn’t cooperate and stocks fall.

When they rise, the fund can either sell the stocks at a profit or buy back the option and sell another one with a later expiration date.

This is a common and conservative strategy for generating income and is what allows the fund to often pay investors a double-digit yield.

A Fund for Your Future

Because it’s a fund, the Neuberger Berman Next Generation Connectivity Fund doesn’t post revenue or income numbers. It doesn’t work like that. Any money it generates is either reinvested or returned to shareholders as a dividend.

And the dividend yields just shy of 10% at present. What’s more, this is a monthly dividend payer. That means every single month, shareholders receive a dividend of $0.10 per share for a total of $1.20 per share annually.

As I write, the fund is trading for a price of about $13, meaning reinvesting those dividends to compound your wealth will snowball incredibly fast with Neuberger Berman.

Say you buy 100 shares of the fund for a cost of about $1,300 total. That nets you $10 per month in dividends, or $120 in just the first year. If prices stay stable and you reinvest those dividends, you can add another 10 shares of the fund to your portfolio while your initial investment remains the same.

That, in turn, will net you another 10 shares the next year. Each year your position will grow, your dividends will grow, and the number of shares you add to your portfolio annually will grow and compound.

If you grow your position to 200 shares, you’ll net $240 in dividends annually, which will considerably speed up the pace at which your position will grow to 300 shares. At that point, you’ll be getting $360 in dividends annually. By now I think you get the picture. And that’s barring any dividend raises… The fund has been issuing dividends only since July 2021, so as the companies in its portfolio raise their dividends, the fund should as well.

And remember, you’re reinvesting those dividends at a 12.39% discount right now. If you could buy top AI stocks for $0.88 on the dollar, you’d do it all day, every day and twice on Sunday.

A high yield plus a relatively low share price and dividend reinvestment is a fantastic way to generate huge, passive income very quickly. And the Neuberger Berman Next Generation Connectivity Fund is the best way to do that while giving yourself exposure to the AI industry and all the growth it’s set to experience by the end of the decade.

Action to Take: Buy the Neuberger Berman Next Generation Connectivity Fund (NYSE: NBXG) at market. Set a 25% trailing stop to protect your principal and your profits.

Compound Your Wealth

Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.” And that principle also applies to compounding your wealth with dividend reinvestment.

It’s a positive snowball effect. Each dividend you receive increases the number of shares of the fund you hold, which increases the size of your dividend. Over time, a single, well-managed and reinvested dividend can cover your bills for the month or even give you enough to live on full time.

A discounted portfolio of dividend payers, particularly ones in a massive growth industry like AI, can do that even faster and more effectively. And that’s exactly what owning shares in the Neuberger Berman Next Generation Connectivity Fund allows you access to. The fund is an entire portfolio of the best AI dividend stocks that pays out nearly a double-digit yield and is trading at a steep discount to its NAV.

The post The Double-Digit AI Income Play appeared first on Wealthy Retirement.

I was very fortunate early in my career to have been trained by one of the greatest contrarian investors of our time.

So when I look at the market, especially in sectors that are white-hot, I’m not interested in the same questions everyone is talking about on CNBC or chatting about online.

I look for stocks that others are blind to… while they chase the hot stock of the moment.

There’s a company investors are making a huge mistake by ignoring. It sits on the convergence of the artificial intelligence (AI), healthcare and pharmaceutical industries.

There’s a ridiculous amount of money in all of those, and all three industries are growing rapidly.

The AI market is set to be worth over $826 billion by the decade’s end. McKinsey & Company predicts AI technology could add $2.6 trillion to $4.4 trillion in economic benefits annually.

Healthcare is a $5 trillion industry in the United States alone. The pharmaceutical industry generates almost $1.8 trillion in revenue annually worldwide.

And this company is set to profit from trends in all of them. It’s called Amgen Inc. (Nasdaq: AMGN), and it’s my #1 AI dividend stock right now.

The Future of Drug Development

Amgen, founded in 1980 and headquartered in Thousand Oaks, California, is solving one of the biggest problems in the modern pharmaceutical industry: drug development.

See, as it stands, drug development is incredibly time-consuming and expensive. The average cost to develop a new drug across the top 20 global biopharma companies is $2.3 billion, but it can go all the way up to $12 billion.

And it normally takes 10 to 12 years for a new drug to get to market. And that’s if it even sees the light of day. A full 90% of new drugs fail in trials. On average, of every 5,000 compounds that enter preclinical testing, only five make it to human trials. Of those five, only one makes it to market. That’s one successful drug for every 4,999 failures.

Modern drug development is a frustrating and expensive exercise in trial and error.

The scientists working for these companies spend countless hours testing thousands of molecules, hoping that one will show promise. But only a tiny fraction of possible drug candidates can actually be tested, and all the other potential molecules have to be ditched.

These companies are wasting years and billions of dollars to maybe find a drug that can both help people and make a profit (after recouping the money spent on development, of course).

What Amgen is doing is using the power of AI to rapidly calculate vast quantities of data and produce usable information to develop new drugs faster and with a higher hit rate.

With AI, scientists don’t have to waste time and money testing drug candidates that won’t amount to anything. They can analyze vast quantities of human datasets and potential molecules and proteins, eliminating much of the trial and error of drug discovery by focusing only on what Amgen’s AI has identified as potentially useful.

AI can conceivably cut the time between concept and product for new drugs in half. A drug that would have taken 12 years to develop without AI will take only six with AI assistance. And it can save companies hundreds of millions of dollars that could be better spent developing more new drugs. Costs could be reduced by 25% to 50%, leading up to the preclinical trial stage of development for new drug candidates.

It also means more drugs can be developed for rarer diseases. Drugs for the diseases with smaller addressable markets could be produced at lower costs, saving or improving thousands of lives the world over.

AI is even capable of seeing things scientists can’t and dreaming up molecules the human mind never could. Instead of searching for a needle in a haystack, scientists could have the proverbial needle handed to them by a machine that was able to sift through all the straw in a matter of minutes.

The benefit to humanity – not to mention the profit potential – is enormous… especially considering Amgen’s partnerships.

Friends in High Places

Amgen announced a partnership with tech and AI giant Nvidia early in 2024. The companyinstalled Nvidia’s DGX SuperPOD full-stack data center platform in its deCODE genetics headquarters in Reykjavik, Iceland.

The system, which Amgen is calling Freyja, after the Norse goddess of fertility with the ability to predict the future, will be used to build a human diversity atlas. The purpose of it will be targeted drug development and disease biomarker discovery.

Ultimately, the goal here is to help develop precision medicine models for various populations and even individualized therapies for patients with serious diseases.

Since it was founded in 1996, the deCODE facility has curated 200-plus petabytes of anonymous human data from nearly 3 million individuals (1 petabyte is equal to 1 million gigabytes). It’s a treasure trove of genetic medical data that, paired with the power of AI and Nvidia hardware, will now be able to be used to its full potential.

And Nvidia is far from the only big player Amgen has partnered with. It’s also paired up with Amazon, using the Amazon Web Services’ cloud platform to analyze its manufacturing capabilities and bring the new drugs it develops using Nvidia’s technology to market.

Not only is Amgen using AI to develop new drugs, but it’s also using it to produce the drugs it develops in state-of-the-art facilities.

Speaking of, Amgen already has a considerable pipeline of treatments showing promise for conditions ranging from migraines and inflammation to tumors and osteoporosis. In all, it has 36 drugs in its pipeline, with AI set to continue growing that number.

In fact, Amgen announced in April that the U.S. Food and Drug Administration (FDA) approved UPLIZNA® as the first and only drug to treat adults with generalized myasthenia gravis (gMG)… a rare autoimmune disorder. In addition, the FDA granted Breakthrough Therapy Designation (speeds up development and review of drug) for UPLIZNA® recognizing the massive unmet medical need for this disease and the potential benefits to the patient.On top of that, Amgen is pretty far from a cash-strapped biotech startup aiming to get acquired by one of the industry giants like Pfizer or AstraZeneca. The company’s balance sheet and its healthy dividend yield are proof of that…

The Financial Elephant in the Room

All the fantastic technology in the world doesn’t make a stock a #1 pick for me. But Amgen combines its sophisticated technology with one of the best balance sheets you’re likely to see in the modern stock market…

Amgen reported strong results in 2024. Total revenue grew 19% to a record breaking $33.4 billion, driven by 23% volume growth. Dividends per share increased 6%, making 2024 the 13th consecutive year with an annual dividend increase. The company not only reached millions of patients with its life-changing medicines but advanced its pipeline to position themselves to deliver robust long-term growth in the future.

The strong growth and momentum continues in 2025. Amgen reported total revenues of $8.1 billion in the first quarter, a 9% increase year over year.. The company’s gross margin is sitting at 69.1% at the time of this writing, and it holds cash reserves of almost $9 billion. For 2024, Amgen paid its shareholders $9 per share in dividends. It has raised its dividend every year since 2012. At present, with the share price sitting just above $279, that’s a yield of 3.4.%.

In short, the numbers here speak for themselves. Amgen is a steady growth machine and a regular dividend raiser situated at the convergence of AI, healthcare and pharmaceuticals.

Action to Take: Buy Amgen Inc. (Nasdaq: AMGN) at market. Set a 25% trailing stop to protect your principal and your profits.

A Fine Addition to Your Portfolio

There isn’t much more an investor can ask of a stock than what Amgen offers. It’s got the technology of a tech startup, the balance sheet of a blue chip, a long trend of steady growth and a healthy dividend that it raises regularly.

In fact, with 12 years of dividend raises under its belt, Amgen is well on its way to becoming a Dividend Aristocrat in 13 years. And given how well positioned it is to capitalize on the rise of AI, it should have no problem continuing its trend of dividend raises.

This is a rare opportunity that just about has it all. It’s the right stock in the right place at the right time, and that’s why it’s my #1 AI dividend stock right now… and why you ought to add it to your portfolio.

The post The #1 AI Dividend Stock appeared first on Wealthy Retirement.

This company is a unique investment. It’s not a stock, bond, private company or option.

Rather, it’s an unusual trust that can give you income from America’s artificial intelligence (AI) boom each and every quarter.

In fact, as a trust, this company is legally required to distribute 90% of its income to its investors via special tax-sheltered dividends… That’s money that can go directly to YOU!

And there’s plenty to go around.

This company already has $8.7 billion in annual revenues… and it is set up for incredible growth for the years ahead.

Now, when most investors think of dividend payers, they likely picture enormous blue-chip companies that have been around forever. And while many of those companies do pay dividends, they are hardly the only ones that do so.

And if you know where to look, you can find an entire portfolio’s worth of dividend-paying stocks of all sizes and in all industries… even industries on the bleeding edge of technology like artificial intelligence, or AI.

As you’ll see in a moment, the “AI Income Trust” is a prime example…

See, the modern internet goes far beyond your laptop, phone or wireless router. It requires infrastructure just as any other complex system does.

The infrastructure the World Wide Web uses is less visible than a freeway, airport or train. But the quintillions of bytes of data we produce daily need the virtual equivalent of roads, rails, ports and warehouses.

For example, the data for websites you use daily, like Google, need server space to function. Think of a server as a sort of warehouse for data. There are around 100,000 servers stored in each of the 10,000-plus data centers worldwide (5,427 data centers are in the United States, the most of any country). The servers provide the data to the devices we use every day.

That data needs to move through the internet to the endpoint user, and it does that through cables and wireless routers. They’re essentially the road, rail, port and airport network we use to move physical goods in this analogy.

It’s important to keep in mind that even though we can’t “see” much of the internet, it isn’t an invisible, intangible thing. It’s just as physical as anything else we use. The only reason you’re able to send emails across the sea to Europe or Asia is due to a massive bundle of cables sitting at the bottom of the world’s oceans.

And AI will greatly increase the traffic on that infrastructure network. AI programs like ChatGPT need much more data and internet bandwidth to operate than older websites. But as legacy websites like Google or Facebook integrate AI, their demand on internet infrastructure will also increase.

That’s where the AI Income Trust comes in… It is building our global internet infrastructure and preventing the digital equivalent of a traffic jam or train derailment. It’s collecting tolls (to the tune of BILLIONS of dollars) from its infrastructure and paying them out to its shareholders through a healthy dividend.

It makes money whenever you ask ChatGPT a question or whenever Amazon’s algorithm gives you a recommendation. Its data centers underpin the modern high-speed internet, communicating with one another and then to the phone in your pocket in milliseconds.

It’s called Equinix Inc. (Nasdaq: EQIX) and it’s like the toll collector of the internet…

It should be the foundation of an AI dividend portfolio because it’s forming the bedrock of the next generation of digital infrastructure.

Building Bridges in Cyberspace

Founded in 1998 and headquartered in Redwood City, California, Equinix is the premier company building out our global digital infrastructure. It’s also a real estate investment trust, or REIT, which means it owns, operates or finances income-producing real estate. These unique investments make it possible for everyday investors – not just Wall Street banks and hedge funds – to profit from investing in real estate and generate income in the form of dividends too.

As its name implies, Equinix aims to be a vendor-neutral – that is, equal access – data center provider, securely connecting networks and sharing data traffic across diverse industries, such as finance, manufacturing, retail, transportation, government, healthcare and education, among others.

AI is set to impact all of those industries in the near future. The AI market itself is set to be worth over $826 billion by the end of the decade. McKinsey & Company predicts AI technology could add $2.6 trillion to $4.4 trillion in economic benefits annually.

AI Market Is Poised for Rapid Growth

And Equinix will profit from all of it – the AI market itself and the economic benefits it will have for every other industry around the world.

The company operates a total of 270 data centers in 75 cities across 35 countries on all six inhabited continents. Its data centers are used by more than 10,000 companies, including 60%+ of the Fortune 500.

They all come to Equinix for one reason: Equinix is better than the competition. The company’s data centers have an incredible uptime rate of 99.999%. In addition, those data centers are protected by five-layer physical security.

In total, the company’s network of data centers and its proprietary physical connections (cables, ports, etc.), which it calls Equinix Fabric, handle over 468,100 connections around the world.

It’s one of the oldest and most experienced companies in the game, with over 25 years of expertise in designing and implementing digital infrastructure, both for its own use and for its clients’ company-specific networks.

The company’s 10,000-strong workforce is led by a capable and experienced team of executives as well. Chief Executive Officer and President Adaire Fox-Martin was appointed in June 2024 and has been a member of the Equinix Board of Directors since 2020. Adaire has 25 years of experience in the technology sector. In her previous role, she was President of Go-to-Market for Google Cloud and Head of Google Ireland.

Executive Vice President of Global Operations Raouf Abdel has 30 years of experience in the field. Since joining the company in 2012, he’s been a driving force in Equinix’s global expansion and success.

Finally, Chief Technology Officer Justin Dustzadeh joined the team in 2019. He’s an Uber C-suite alum who’s responsible for developing Uber’s global infrastructure network. He also has prior experience at Visa, Huawei, Ericsson and AT&T.

You might imagine that a company with this much going for it has quite an impressive balance sheet… And you’d be correct.

Digital Tolls for Digital Highways

Equinix is building out digital infrastructure and collecting tolls for using its network. Given its clientele, those tolls add up quickly…

In 2024, the company netted revenue of over $8.7 billion, up 6.6% year over year. Net income totaled $815 million.. And earnings per share were $8.53.

Revenue has been on a long-term growth trend as well. Over the last three years, revenue has grown at a compound annual rate of 11.3%. Over the past 10 years, revenue has grown at a compound annual rate of 13.4%.

And the good news doesn’t stop there. Gross margin is sitting at 49.4%. Cash and cash equivalents grew a whopping 47% to $3.08 billion in 2024. And cash from operations also grew, albeit slightly, up 1% in 2024.

And that growth has continued through the first quarter of 2025. Revenues topped $2.2 billion for the quarter, up almost4% year over year.

That brings me to the company’s dividend. At present, the company pays out a dividend of just over $18.76 per share for a yield of 2.1% at its current price. Equinix has grown that dividend for 10 years straight since becoming a REIT.

In addition, the company’s dividend increases are substantial. From 2023 to 2024, the dividend grew 18%. The company expects to grow it another 10% through 2025. And right now Equinix’s dividend payout ratio is just 48%, so it has plenty of room to continue growing the dividend.

And $8.7 billion in annual revenues means there’s plenty of money to go around. If you pick up some shares today, you’ll lock in a claim to the tolls collected on the information superhighway.

Action to Take: Buy Equinix (Nasdaq: EQIX) at market. Set a 25% trailing stop to protect your principal and your profits.

Digital Infrastructure for a Modern Economy

Owning shares of company like Equinix is akin to being partial owner of a massive infrastructure project. Imagine collecting some income every time a ship passes through the Suez Canal. Before the Egyptians nationalized the Suez Canal in the 1950s, that was a strategy that worked very well for investors.

Think of Equinix and its data centers as a digital Suez Canal. Instead of goods traveling along an international shipping line, data is traveling along a network of silicon and plastic. Every time that happens in one of its data centers, Equinix collects a toll – and as a shareholder that benefits you.

AI will put immense pressure on global internet infrastructure. More traffic through the world’s data centers means more tolls for Equinix to collect, more profits for the company and more “AI Income” for you.

You can bet that as the volume of tolls goes up and Equinix’s revenues follow that upward trend, its share price will rise in lockstep – and so will its dividend.

The post The AI Income Trust appeared first on Wealthy Retirement.

Marc Lichtenfeld
Marc is the Senior Editor of The Oxford Income Letter, which is based on his proprietary 10-11-12 System. He is a leading member of Oxford Centurion‘s Centurion Advisory Board. He is also the Editor of Technical Pattern Profits, Penny Options Trader and Oxford Bond Advantage.

Marc Lichtenfeld is the Chief Income Strategist of The Oxford Club. After getting his start on the trading desk at Carlin Equities, he moved over to Avalon Research Group as a senior analyst. Over the years, Marc’s commentary has appeared in The Wall Street Journal, Barron’s, and U.S. News & World Report, among others. Prior to joining The Oxford Club, he was a senior columnist at Jim Cramer’s TheStreet. Today, he is a sought-after media guest who has appeared on CNBC, Fox Business and Yahoo Finance.

His first book, Get Rich With Dividends: A Proven System for Earning Double-Digit Returns, achieved bestseller status shortly after its release in 2012 and was named Book of the Year by the Institute for Financial Literacy. It is currently in its second edition and is published in multiple languages. In early 2018, Marc released his second book, You Don’t Have to Drive an Uber in Retirement: How to Maintain Your Lifestyle without Getting a Job or Cutting Corners, which hit No. 1 on Amazon’s bestseller list.

In this report, I’m giving you three safe, healthy dividend plays that should be the backbone of your income portfolio.

My recommendations in this report don’t have gimmicky technology or an eccentric business model. They offer products and services that you can understand.

These three companies are the very epitome of unassuming but important. And because of their inconspicuous nature, they don’t have their value inflated by speculators.

However, you’re getting some of the safest dividend yields in the entire stock market. And these three companies have long histories of growing those yields.

Lastly, these are stocks from my own portfolio. I have owned them for years and expect to own them for many more.

High-Voltage Dividends

Two decades ago, Florida Power & Light Company was nothing special. It was just a large utility company based in Florida.

How things have changed since then…

Since becoming NextEra Energy (NYSE: NEE) in 2010, it has transformed into the world’s largest utility company.

The company operates in 49 states and four Canadian provinces. It even has a few international subsidiaries.

NextEra still owns Florida Power & Light, and thanks to the huge growth in Florida’s population, Florida Power & Light is America’s largest electric utility. It provides electricity millions of people, producing about $7.3 billion in operating income annually.

NextEra, through its wholly owned NextEra Energy Resources, is also the world’s largest producer of green energy.

Generating Green Energy Profits

NextEra was an early adopter of renewables and green energy. And now it is the world’s largest generator of renewable energy from the sun and wind and a world leader in battery storage.

In addition, since the 1970s, NextEra has built and maintained nuclear power plants. It currently operates seven nuclear power plants.

The early investments in clean energy have paid off…

Today, NextEra is a leader in energy storage. Historically, one of the largest problems with solar and wind energy has been what to do when the weather doesn’t cooperate.

The solution to that problem is storing the electricity in batteries similar to the lithium-ion ones found in electric cars. NextEra operates more of these battery storage facilities than any other company.

While many green energy companies are struggling financially, that’s not the case here.

Last year, NextEra brought in a whopping $24 billion in revenue. NextEra took in $6.9 billion in net income in 2024 and grew its cash reserves to a staggering $1.49 billion. Earnings per share (EPS) were $3.4.

A Long History of Satisfying Shareholders

And the company has a long-term track record of delivering shareholder value. It has far outperformed its competition and the S&P 500.

Its 15-year total shareholder return is 669%.

Over that same time frame, the total shareholder return for the S&P 500 is 255%, and for its industry competitors… the S&P 500 Utilities… it’s only 191%.

The company returns its incredible income to shareholders through a solid – and constantly increasing – dividend of $2.06 per share, which provides a healthy yield of 2.82%.

Title: NextEra Energy Dividend Growth

Source: FinChat.io

And with the money it’s raking in, NextEra is smartly expanding.

It’s constantly building new solar, wind, battery storage and nuclear plants. It won’t overwhelm itself with its expansion, though…

Completed projects are handed to NextEra’s local subsidiaries upon completion. That frees up the company’s cash from operating expenses to further fuel expansion and increase the dividend.

Its business model, technology, finances and dividend are all top-notch. NextEra will be providing stress-free income for years to come.

Action to Take: Buy NextEra Energy (NYSE: NEE) at market. Place a 25% trailing stop on your position.

Proven and Probable Dividends From This Gold Miner

When it comes to gold mining, there is no doubt that Newmont Corp. (NYSE: NEM) is one of the biggest and best in the business.

Founded in 1916, with headquarters in Denver, Colorado, Newmont has proven and probable gold reserves of more than 92.8 million ounces. In addition, Newmont has substantial holdings of other metals, including silver, lead, zinc and molybdenum along with 14 million tons of copper.

With more than 110 years of experience and huge mineral reserves stashed in mines across the globe, the company is a low-risk, high-potential investment.

For gold miners, the profit equation is quite simple. The difference between the price of gold and what it costs to get it out of the ground equals the company’s profit.

If costs rise and the price of gold falls… profits shrink. But if the metal’s price moves higher and costs sink… profits surge.

However, with Newmont, the pathway to profit is much more assured than that of many industry competitors…

• Newmont has a portfolio filled with assets and projects that are ranked as the most favorable in the industry.
• The bulk of its assets are in mining-friendly jurisdictions in the United States, Canada, Mexico and Australia.
• There’s a diversified mix of commodities being mined. Newmont can shift production efforts to the highest-priced minerals and/or the minerals with the lowest costs of production if needed.

This year, the company expects to produce 5.6 million ounces of gold. Each ounce will cost the company about $1,620 to pull out of the ground and get to the market. With gold currently selling for more than $2,900, each ounce sold represents a profit of about $1,280.

The company has seen its revenue surge in recent years as inflation has made gold a more popular investment.

Title: Newmont Corporation Annual Revenue 2014-2023

Source: FinChat.io

The more popular gold becomes as an investment, the higher the price of gold will climb… and the bigger the profit margin will become.

For Newmont, that will lead to increasing profits… but it also implies an increase in the dividend to shareholders. Here’s why…

Newmont has established a framework for the dividend payout… and for its increases.

The company will pay a base dividend of $1 per share per year at a $1,400 gold price. The dividend is recalibrated based on incremental moves of $300 per ounce in the price of gold.

The variable component of the dividend is based on the free cash flow generated at the higher gold price.

In the fourth quarter of 2024, Newmont paid a $0.25 dividend. Even without any raises over 2024, that works out to $1 per share which provides a current yield of 2.3%.

With the likelihood of higher gold prices ahead, the dividend should be increasing…

Management has set a goal (with the help of a higher gold price) of achieving a dividend payout range of between $2 and $3 within the next few years.

Betting on the Front-Runner

Eighty percent of Newmont’s gold production is coming from stable mining jurisdictions in North America, South America and Australia. And these are some of the richest and most reliable mining assets on the planet.

Two-thirds of its gold production is from Tier 1 assets (the highest mining industry classification based on potential production, mine life and operational costs). These properties will provide an ultra-reliable stream of cash flows.

Newmont has transformed itself with the Newcrest merger and the Barrick joint venture. It now has the largest gold reserves and the strongest management team in the gold sector.

The new Newmont is now focused mainly on assets with superior costs, long mine lives and high grades.

Last but not least, thanks to its strong balance sheet – $3.64 billion in cash and cash equivalents – and favorable gold prices, Newmont’s base dividend is rock-solid. And a higher gold price will lead to an increasing dividend.

As we know now, the current inflation is not transitory. It won’t be long before gold is once again recognized as the ultimate inflation hedge. That money will flow toward the biggest and safest companies in the industry.

Newmont fits the bill for both.

Action to Take: Buy Newmont Corp. (NYSE: NEM) at market. Place a 25% trailing stop on your position.

Safe, Highly Profitable, Boring, an Increasing Dividend… What’s Not to Like?

This next recommendation is in the industrial sector, which is often overlooked because it lacks the sexiness and glamour of other sectors.

But in this case, low volatility, a high margin of safety, consistent profits and a juicy dividend make up for that.

Founded in 1945 and headquartered in Miami, Florida, Watsco (NYSE: WSO) together with its subsidiaries, engages in the distribution of air conditioning, heating, refrigeration equipment, and related parts and supplies. Watsco is the largest player in the industry.

The firm installs, upgrades and retrofits heating, air conditioning and refrigeration (HVAC/R) products in the United States, Canada, Mexico and Puerto Rico, and on an export basis to Latin America and the Caribbean.

Watsco provides HVAC/R products that are the most technologically advanced in the industry, improving efficiency and dramatically reducing carbon emissions in the process. (More on that in a moment.)

Gosh, It’s Hot Out 

Air conditioning is something we rarely think about… until we suddenly need it or, worse, don’t have it! Then we find it hard to think about anything else.

Just ask the residents of Phoenix… They sweated through 54 days of temperatures at 110 degrees or higher in 2023. In 2020, Phoenix had 145 days when it was 100 degrees or more.

And the folks in Austin, Texas, appreciate their air conditioning. They had 80 days of triple-digit temperatures in 2023.

Investors tend to overlook pedestrian businesses like heating, cooling and ventilation. But the industry is steady and highly profitable.

There’s no better example of that than Watsco.

In 2024, the company established another new record for sales ($7.6 billion), gross profit totaled $2 billion, operating income of $748 million, net income of $536.3 million, and EPS of $13.30.

And last year was no fluke…

Since 2014, sales and have grown at a compound annual growth rate CAGR of 6.8%. Over this same period, the dividend has grown at a 18.1% compound annual growth rate.

The annual dividend per share for 2023 is $11 per share.As of this writing, the dividend yield is 2.2%. You’d think the yield would be much higher after so many aggressive rate hikes… but the stock has also soared. It’s up nearly 26% over the past year.

And Watsco has paid a dividend for 49 consecutive years! And it has raised the dividend relatively consistently over the past several decades.

Title: Watsco Dividend Growth

Source: FinChat.io

And now – thanks to lower carbon emission standards – the industry is ripe for disruption. A huge new opportunity for sales and earnings has emerged.

A Bright Future

The most exciting prospect for Watsco is its new role in providing efficient, low-carbon, smart HVAC/R products.

In response to wide-ranging regulatory requirements that took effect on January 1, 2023, higher-efficiency HVAC/R systems are in high demand.

For example, air conditioning is responsible for roughly 20% of the electricity used by buildings. Electricity generation accounts for about 25% of all greenhouse gas emissions worldwide.

Watsco is happy to help. It’s assisting companies around the world, helping them meet the new standards with higher-efficiency HVAC/R systems.

Albert Nahmad, Watsco’s founder, chairman and CEO, had this to say in the company’s 2023 second-quarter earnings report (it was the second-best quarter in company history):

Looking at the long-term, we remain very enthusiastic about the upcoming product and regulatory transitions that will influence replacement rates and Watsco’s unique technology platforms that continue to see growing adoption among contractors, both of which will positively influence the trajectory of our business.

Don’t underestimate the upside potential of this “boring” business.

Action to Take: Buy Watsco (NYSE: WSO) at market. Place a 25% trailing stop on your position.

The Building Blocks of a Healthy Portfolio

Reliable dividend-paying stocks should represent the base of your investment portfolio because they tend to be stable companies focused on returning money to shareholders.

When those companies are the boring but important kind – making products and providing services the modern world can’t go without – their stocks are especially lucrative.

The three companies in this report not only are reliable dividend payers… but also provide real potential for capital gains.

Now is the time to pick up all three of them and start collecting your share of stress-free income… just as I have.

The post Must-Own Dividend Stocks From My Personal Portfolio appeared first on Wealthy Retirement.