Imagine investing a million dollars and getting back a pathetic $17,500 in income every year.
You dont have to imaginebecause thats exactly what youd get if you bought the typical S&P 500 stock today, which yields a sad 1.75%.
The worst part? That yield is a lot smaller than it was just 10 months ago, and down near 10-year lows as stock prices have ground higher:
Dividend Yields Scrape Bottom
No wonder dividends get no respect!
But Ive got good news: that 1.75% doesnt matter a bit to us. In fact, its a distraction from the real opportunity I want to show you: a dead-simple, 3-step shot at a much bigger payout.
Im talking about 6%+ in cash here. Thats enough to turn that $18,000 into a very nice $60,000 a yearat least!
Ill give you the full story (including how you can grab this hidden yield yourself) now. Ill also show you how this easy strategy can grow your nest egg fast, toowith huge price returns like the 813% one stock delivered.
3 Keys to Big Gains (and Dividends) in Any Market
To start off, lets look at the three ways a company can pay us. Find a stock thats doing one and youve got a leg up on most folks. Find one thats doing all three and youve hit the sweet spota stock that can power your income (and gains) in any market.
Here they are:
To show you the profit-making power of doing all three, lets look at a stock you undoubtedly know well: Visa (V).
The payment giant ticks all three of our boxes: starting with paying a dividend (though the 0.6% current yield seems pathetic, its anything butIll explain shortly).
860% Dividend Growth
When it comes to growing dividends, few companies can match Visa: its payout has exploded 860% in the last 10 years:
What the Current Yield Hides
That massive payout hike is great, but theres more here than meets the eye.
How a 0.6% Yield Turned Into a 6% Cash Stream
For one, payout hikes increase our yield on cost, which is more important from an income standpoint than the stocks current yield (the one you see on Google Finance or Yahoo Financeand the one everyone obsesses over).
Because while Visas current yield is just 0.6%, its explosive dividend growth means youd be pocketing a fat 6% yield on a buy made just 10 years ago!
Thats because you calculate yield on cost by dividing your current annual dividend rate$1.20 in Visas caseby your per-share purchase price (around $20 a decade ago, just 11% of the $180 a Visa share sells for now).
But this true 6% yield is hidden because Visas share price moved up with its dividend (more on that in a moment), keeping the current yield roughly the same:
Visas 6% Dividend in Disguise
I think youll agree that our yield on cost is what really matters for your retirement income stream.
Theres more, though.
Because what almost no one pays attention to is the crystal-clear connection between dividend hikes and rising share prices. Check it out:
Visas Dividend Magnet Goes to Work
Theres no way you cant see the pattern here!
Name the crisis: the panic over rising rates, the Chinese stock-market meltdown of early 2016 and, lately, trade-war fears. None of it matters: Visas stock always snaps back to its rising dividend. And this pattern is far from unique to Visa: Ive seen it happen over and over.
Like with General Dynamics (GD):
General Dynamics Share Price Lifts Its Stock
And Warren Buffett favorite Coca-Cola (KO):
Why Buffett Loves Dividends
If thats not a proven pattern, I dont know what is. And Visa is doing one more thing that will keep this dividend up, share price up cycle going for years to come.
Buybacks: Your Dividend (and Share Price) Afterburner
The last ingredient: share buybacks.
To see how potent buybacks are, lets add the number of shares outstanding to our chart showing the companys dividend and share-price growth:
Share Count Down, Share Price (and Dividend) Up
That red line might not look like much, but its decline (meaning Visa has effectively bought up 20% of itself in the last decade) is the trigger for our virtuous cycle. Fewer shares mean higher dividends on the stocks that remainand that, in turn, powers the share-price rise.
Yours Now: My Top 7 Buys to Double Your Money Fast (Bull or Bear)
Visa, Coke and General Dynamics are just the startand to be honest, this trio, great as they are, dont even make the list of my 7 top dividend growers to buy now.
Ill show you those 7 pickswhich are, hands-down, my best dividend-growth plays for 2020right here. Ive selected them to do one thing: double your nest egg every 5 years (or less!) while tripling your dividend income.
No, these arent speculative, high-risk bets you cant tell your spouse about. Theyre boring plays like Packaging Corporation of America (PKG), which delivered 65% in gains and dividends in just 15 months after I recommended it:
Boring Stock Explodes After My Buy Call
Or CoreSite Realty (COR), a low-key landlord whose buildings house the computing hardware modern companies simply must have. It handed us 69% in gains and dividends in less than 3 years!
Megatrend Stock Quietly Soars
Dont miss your shot at the next CoreSite. Go here and Ill give you the full story on my proven dividend-growth strategy, plus my top 7 dividend-growth plays for 2020names, tickers, best buy prices and everything else you need to know.