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tom-hutchinson

Tom Hutchinson

Chief Analyst, Cabot Dividend Investor, Cabot Income Advisor and Cabot Retirement Club

Tom Hutchinson is the Chief Analyst of Cabot Dividend Investor, Cabot Income Advisor and Cabot Retirement Club. He is a Wall Street veteran with extensive experience in multiple areas of investing and finance.

His range of experience includes specialized work in mortgage banking, commodity trading and in a financial advisory capacity for several of the nation’s largest investment banks.

For more than a decade Tom created and actively managed investment portfolios for private investors, corporate clients, pension plans and 401(K)s. He has a long track record of successfully building wealth and providing a high income while maintaining and growing principal.

As a financial writer, Tom’s byline has appeared in the Motley Fool, StreetAuthority, NewsMax, and more. He has written newsletters and articles for several of the nation’s largest online publications, conducted seminars and appeared on several national financial TV programs.

For the past seven years, Tom has authored a highly successful dividend and income portfolio with a stellar track record of success. At Cabot, Tom provides monthly Cabot Dividend Investor issues, regular weekly updates on every portfolio position and a weekly podcast discussing goings-on in the market.

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From this author
Cabot Dividend Investor
December 18, 2024
It looks like the election euphoria has run out of gas. The market has digested the election and is now back to business as usual.

The Dow Jones Industrial Average has lost ground for nine consecutive sessions. Most of the S&P 500 sectors have been down over the past month. Of course, the S&P is still within a whisker of the high. It hasn’t pulled back. But it hasn’t gone up in a while either.
December 18, 2024
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Tom Hutchinson
Cabot Income Advisor
Cabot Income Advisor Issue: December 17, 2024
By most measures, 2025 looks pretty good for stocks.

The Fed has begun a rate-cutting cycle that should last for the next two years. Historically, stocks do well when the Fed is cutting rates and there is no recession. And the economy has been solid. This bull market is just 25 months old and has returned 65%. Bull markets usually don’t just run out of gas after two years. In fact, the average bull market has lasted 50 months and returned 152%.

But stocks are expensive. The S&P currently sells at 22.3 times forward earnings compared to an average of 16 times over the last twenty years. The market returned 26% in 2023 and about 28% this year with two weeks to go. It might be tough for stocks to deliver another consecutive year of 20%-plus returns.

It may be that a lot of the easy upside is behind us. Stocks can still perform well, but they’ll probably have to earn it in 2025.

In this issue, I highlight a stock that is poised for a strong earnings rebound in 2025. It is a stock that bounces a lot between the highs and lows. And it is currently well below the high. It is also one of the best healthcare companies on the market at a time when the population is older than ever before and aging at warp speed.
December 17, 2024
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Tom Hutchinson
Income Investing
2 Stocks Made for 2025
We’re in the midst of a bull market and knocking on the door of a new year. Here are two of my favorite stocks that look made for 2025.
December 16, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
Cabot Dividend Investor Issue: December 11, 2024
It’s been a great year in the market with the S&P up 27%. And there is good reason for optimism about 2025.

We are in a bull market that began in October of 2022. Bull markets don’t usually run out of gas after just two years, especially recent ones. The Fed has begun a rate-cutting cycle that is likely to last for the next two years. Plus, the economy is solid and expected to get stronger. Rate cuts in a strong economy are unusual, but the combination should be great for stocks.

One sector may have a better 2025 prognosis than the overall market: Financial stocks have been on a tear since the summer. The Financial Select Sector SPDR Fund (XLF) is up 33% YTD and 22% since early August. Despite the recent spike, many financial stocks are still cheap after a decade and a half of underperformance.

Financial stocks are dependent on yield spreads, economic growth, and relaxed regulations. All those areas are improving or expected to improve as a result of the election.

In this issue, I highlight one of the highest-growth companies in an industry that is on the rise. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble which has likely only delayed its price spike.
December 11, 2024
 · 
Tom Hutchinson
Dividend Stocks
The Best Utility Stock and ETF to Buy Today
People will always need electricity, gas and water. And that’s what makes utility stocks so reliable. Here are three that I like right now.
December 5, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
December 4, 2024
These are good times. The S&P 500 is up 6% since the election and 27% year to date. This adds to a 26% return for the index in 2023.

The market is seemingly making new highs every day as investors expect a higher level of economic growth going forward because of the election. We’ll see if the economic growth materializes. But this optimistic economy expectation comes while the Fed has begun a rate-cutting cycle that will likely last the next two years. Why wouldn’t the market be partying?
December 4, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
November 27, 2024
After a brief dip following the post-election euphoria, the market is right back to a new high.

So far, the promise of stronger economic growth is more than offsetting the likelihood of higher interest rates for longer. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. The financial, energy, and consumer discretionary sectors are leading the market. Those sectors are up 9.3%, 5.7%, and 8.6% respectively in the three weeks since the election.
November 27, 2024
 · 
Tom Hutchinson
Cabot Income Advisor
Cabot Income Advisor Issue: November 26, 2024
The election is changing things.

The difference is the expectation of stronger economic growth. As a result, new sectors have emerged as market leaders. Cyclical sectors have taken off. Financial, energy, and consumer discretionary sectors are leading the market. And this changing dynamic is likely just in the very early stages.

In this issue, I will focus on an opportunity in the financial sector.

Financial stocks, of which banks make up a big part, generally make profits from the spread between the cost of funds, mostly short-term rates, and what they charge for loans. Higher spreads mean more profits.

The Fed has begun a rate cutting cycle that will likely last for two years. Banks also need a good economy with strong loan demand. The better economic prognosis after the election is bullish. Plus, there is likely to be a much friendlier regulatory environment for banks and financial companies in the new administration.

In this issue, I highlight one of the highest-growth major financial companies that will surely benefit from the improving dynamic going forward. It is the leading all-digital bank in the country. Unlike many other industry-leading stocks, it is still well below the high because of a recent temporary stumble, and a price spike should be ahead.

November 26, 2024
 · 
Tom Hutchinson
Stock Market
The Dividend Aristocrats ETF: Own the 66 Best Dividend Growers
Buying this Dividend Aristocrats ETF is a way to own the 65 best dividend growth stocks on the market. But there are other alternatives too.
November 21, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
November 20, 2024
After a huge post-election rally, the market leveled off.

The S&P 500 soared 5% in the three days after the election. Since then, it hasn’t pulled back with any significance, but it has stopped going up.
November 20, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
Cabot Dividend Investor Issue: November 13, 2024
The election of Donald Trump has altered the trajectory of the economy and the market.

Investors perceive his election will deliver stronger economic growth, primarily through deregulation and tax cuts. Although interest rates spiked higher on the expectation of a stronger economy, the market views the revised prognosis as overwhelmingly bullish, so far.

The new administration will employ drastically different policies that will have a significant effect on different sectors and can’t be ignored. The most obvious sector beneficiary of the new administration is energy.

A huge beneficiary will be natural gas exports. The U.S. has recently become the world’s second-largest exporter of natural gas. Exporters ideally sell cheap American gas overseas where it fetches a much higher price. More production and cheaper domestic prices are ideal for exporters. At the same time, the new administration is likely to encourage as much natural gas exporting as possible.

In this issue, I highlight a company that runs the largest liquid natural gas (LNG) export facility in the country. It is a subsidiary of existing portfolio position Cheniere Energy (LNG), which is up 15% since the election. It pays a huge income and still sells at a reasonable price.
November 13, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
November 6, 2024
The election is over. The biggest risk, a disputed outcome, has been avoided. The new President is being viewed by markets as generally good for business and stocks. The market is thrilled today and rallying substantially.
November 6, 2024
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Tom Hutchinson
Cabot Dividend Investor
October 30, 2024
It has been a great market for most of the last two years. But the bull run will be severely tested over the next couple of weeks.

The S&P 500 is within a whisker of the all-time high after rallying 22% YTD and over 60% in the past two years. The recent investor perception is that the Fed has begun a rate-cutting cycle that will last for two years, and the economy is still solid. That view will be put to the test this week.
October 30, 2024
 · 
Tom Hutchinson
Dividend Stocks
The Best Conservative Dividend Stocks in 2024
Despite a broadly solid market, dividend payers lagged in 2021, but things are looking up. Here are 4 conservative dividend stocks for 2022.
October 24, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
October 23, 2024
The market has been generally very good, although it’s wobbling this week so far.

The bull market that started two years ago has returned more than 60% in the S&P 500. The index is up about 23% year to date. The market rally has also broadened since the summer to include many other stocks and sectors besides technology.
October 23, 2024
 · 
Tom Hutchinson
Cabot Income Advisor
Cabot Income Advisor Issue: October 22, 2024
This country has a massive shortage of housing.

It is estimated that the current demand for homes exceeds the national supply by a whopping 4.5 million. The shortfall has caused the median U.S. home price to double since 2011 and soar a staggering 40% just since the pandemic. In many areas, prices have increased a lot more.

High prices combined with the highest mortgage rates in decades have made housing unaffordable. Zillow estimates that only 15.1% of current non-homeowner households can afford a typical mortgage.

But there is reason to believe the housing problems will get a lot better in the years ahead.

Mortgage rates are falling. The average U.S. 30-year fixed mortgage rate has fallen to 6.6% from 7.2% this past May and 7.8% a year ago. And rates are likely to continue to trend lower from multi-decade highs in the years ahead. Prices are coming down too. The average U.S. home price has declined about 7% since the beginning of last year.

While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news for homebuilders. New homes should be in high demand for years to come, and sales should increase with the improving conditions.

In this issue, I highlight one of the best homebuilders on the market. The stock has been a stellar performer as investors realize the opportunity. But it is still reasonably valued and has momentum. It should provide a covered call opportunity soon.
October 22, 2024
 · 
Tom Hutchinson
Dividend Stocks
Qualified Dividends Explained: When Are Dividends Qualified?
What are qualified dividends? It’s important to know what makes a dividend qualified for tax purposes. Here’s what you need to know.
October 18, 2024
 · 
Tom Hutchinson
Dividend Stocks
How to Use an Ex-Dividend Date Calendar
If you want to spread out your dividend payments, an ex-dividend date calendar is a handy way to keep track of all your payments.
October 16, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
October 16, 2024
The two-year-old bull market is about to meet third-quarter earnings. And things look good.

The bull market is alive and well and shows no signs of stopping. Since the bear market low in October of 2022, the S&P 500 has risen over 60%. It has been powered by the artificial intelligence catalyst, a surprisingly resilient economy, and the peaking of interest rates. The current “soft landing” expectation means we are getting rate cuts but no economic pain. That’s good news.
October 16, 2024
 · 
Tom Hutchinson
Dividend Stocks
The Best Homebuilder Stock for a Low-Rate Environment
Historically, when the Fed starts to cut rates, homebuilder stocks are the first to benefit. And one high-profile homebuilder tends to outperform the rest.
October 14, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
Cabot Dividend Investor Issue: October 9, 2024
There is a colossal housing shortage in this country.

A decade of underbuilding in the housing industry following the financial crisis has left the industry unable to meet the needs of the growing population. It is estimated that the demand for homes exceeds the current national supply by a whopping 4.5 million.

The jilted supply/demand dynamic has caused the median U.S. home price to soar a staggering 40% just since the pandemic. In addition, mortgage rates have soared to the highest level in two decades. The prices and mortgage rates are making housing unaffordable for vast numbers of potential buyers. Sellers are unwilling to trade up and get a higher mortgage rate.

There aren’t enough new homes, and existing homes aren’t coming on the market either. Buyers can’t buy and sellers won’t sell. But there is reason to believe the housing problems will get a lot better in the years ahead.

While the situation is likely to improve, the supply/demand imbalance will likely remain for several years. That’s a problem for the housing market and economy to work through. But it’s good news if you’re a homebuilder. New homes should be in high demand for years to come, and sales should increase with the improving conditions.

In this issue, I highlight the premier luxury home builder in the U.S. The stock has the best track record of all large homebuilders, and the company is in an ideal position to benefit from high demand and increasing buying in the years ahead.
October 9, 2024
 · 
Tom Hutchinson
Dividend Stocks
Are All of the Highest-Paying Dividend Stocks High Risk?
Adding the market’s highest-paying dividend stocks to your portfolio can be a huge help in generating regular income in today’s environment.
October 7, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
October 2, 2024
The third quarter ended with the market looking good. The S&P 500 was up 2% in September after a rough start, 4.3% for the third quarter and over 20% YTD. Can the good times last?
October 2, 2024
 · 
Tom Hutchinson
Magazine
A Utility Stock for the New Age
Utilities may sound stodgy and boring, but this next-gen utility is ideal for the new age of technology built around AI, EVs, and data centers.
September 27, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
September 25, 2024
The market is hot stuff again. The S&P made a new high this week after making up all the early September losses and then some. It is the 40th record close for the index, which is now up 20% YTD with another quarter left.
September 25, 2024
 · 
Tom Hutchinson
Tech Stocks
Verizon (VZ) vs. AT&T (T) Stock: Which Is the Best Telecom Stock?
AT&T (T) and Verizon (VZ) are perhaps the two most widely recognized telecom stocks. But which is the better stock today?
September 24, 2024
 · 
Tom Hutchinson
Cabot Income Advisor
Cabot Income Advisor Issue: September 24, 2024
A new era has begun.

Most of the last two years have been an environment of rising and high interest rates and technology sector dominance. Now, we are entering a period of falling interest rates and a slowing economy. The new stage will bring different winners and losers.

The previously beleaguered interest rate-sensitive stocks and defensive stocks ignited and began to lead the overall market higher as technology pulled back. Since the summer, this new trend has been confirmed. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.

In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
September 24, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
September 18, 2024
It’s a new era, a changing of the guard. This week a Fed easing cycle starts as the Fed will begin to lower the Federal Funds rate after the steepest hiking cycle in decades. The easing cycle is expected to last for years.
September 18, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
Cabot Dividend Investor Issue: September 11, 2024
We are in the early stages of a new cycle in the market.

The environment is changing from one of high inflation and high interest rates to one of falling inflation and interest rates in a weakening economy. And it is unlikely to be a mere short-term gyration but rather the beginning of a new environment that should last for some time.

Interest rates may fall quickly or more slowly depending on whether the economy remains buoyant or slips towards recession. But rates will fall much more significantly than they have in years.

The cycle reversal will create new winners and losers. Certain interest rate-sensitive stocks have been laggards for a long time and have a lot of catching up to do. They are still cheap, high yielding, and now have momentum.

In this issue, I highlight a great monthly income stock. The yield is massive, and it provides a high income in an uncertain market. The stock also can provide great price performance when the interest rate cycle goes its way. This point in the cycle provides a great opportunity to get a high income and total return on the right side of a pronounced market shift ahead.
September 11, 2024
 · 
Tom Hutchinson
Cabot Dividend Investor
September 4, 2024
It’s the post-Labor Day market. Investors tend to start paying attention again after the summer. This refocus prompted one of the worst selloffs this year.

Investors were positive about things in the middle of August before they went on vacation and stopped paying attention. The market rode out the rest of the month in the same form. But investors coming back to real life after the summer realized that there might be more to worry about.
September 4, 2024
 · 
Tom Hutchinson