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Cabot Dividend Investor 421

April 14, 2021

While the direction of the market is highly unpredictable in the short term, it’s a safe bet that this economy will continue to recover after the covid recession. It is also highly likely that interest rates will continue to rise.

Interest rates tend to move higher as the economy emerges from recession and gains traction. It’s already happening. The benchmark 10-year Treasury bond yield has already risen sharply this year. Yet, rates are still well below pre-pandemic levels, and the economy is about to ignite. There will also be trillions in stimulus dollars causing inflationary pressures and upward pressure on rates.

Certain dividend stocks and income paying securities endure despite rising rates. And certain special securities can actually thrive. In this issue, I highlight an investment that loves rising rates. In fact, profits increase directly as a result. The stock pays a stratospheric 8.4% yield and pays dividends every month.

In this issue, I highlight an investment that loves rising rates. In fact, profits increase directly as a result. The stock pays a stratospheric 8.4% yield and pays dividends every month.

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Cabot Dividend Investor 321

March 10, 2021

Cyclical or open-up stocks are on fire, and for good reason.

The U.S. economy has far exceeded expectations at every phase of the recovery so far. The vaccines promise to end the remaining lockdowns and restrictions. With the shackles removed, the economy will kick into high gear. Even several normally dour economists are predicting the highest GDP growth in decades this year.

In anticipation, cyclical financial stocks are on fire. The Financial Sector SPDR Fund (XLF) is up 45% just since the vaccine announcement in early November. Yet, many financial stocks are still undervalued ahead of what should be an ideal environment for the sector.

In addition to the bright near-term prospects for financial stocks in general, there is also an incredible growth trend in a particular niche area, alternative investments. These include investments outside of the stock and bond markets. Individuals and institutions desperate to diversify are piling in. And massive growth in this arena is accelerating.

In this issue, I highlight a company I believe to be the very best player in alternative investments. Stock performance has far exceeded its peers and there is every reason to believe the outperformance will continue going forward.

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Cabot Dividend Investor 221

February 10, 2021

Market performance for the rest of the year will depend upon a full recovery brought on by the vaccines the removal of lockdowns and restrictions. If that doesn’t happen, look out. But I’m confident it will.

Of course, the pricey market indexes don’t apply to many individual stocks. Some stocks are very overvalued while others remain undervalued. At this point, the more conservative play is to target stocks with cheap valuations to buy, especially while many of those bargain stocks also have newfound momentum.

In this issue, I highlight a blue-chip energy stock. It sells at a dirt-cheap valuation while paying a high and safe dividend. It also has strong momentum ahead of what is likely to be a year of vastly improved profits.

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Cabot Dividend Investor 121

January 13, 2021

Beyond the incessant trumpeting of current events by every orifice of the media, a future awaits. And it’s right around the bend. Beneath the current noise, tectonic plates are moving below the surface, and the world is changing.

Identifying these underlying shifts is a great way to find winning investments. And there is a particular shift that is affecting the market far more than any other, the rapid pace of technological advancement. It is the greatest force driving the market and its dominance is likely to grow.

When investors focus on the world beyond the virus and the elections they will ask what’s next. What is next for the market is what is next for technology. And 5G is central to that discussion.

5G will drive the next phase of technological innovation and launch the world into a new digital age. In this month’s issue, I highlight a major player in the technology space that will benefit directly and massively from the rollout. It’s still cheap, pays a good dividend and is on the cusp of an epic year.

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Cabot Dividend Investor 1220

December 9, 2020

The vaccine is changing everything. Stocks that had been left for dead by the market recovery are springing back to life and leading the market higher.

One area of opportunity ahead of the New Year is in banks stocks. As a cyclical sector, banks took it on the chin during the pandemic. They crashed during the bear market and have lagged the recovery. But they are rising fast and have great momentum ahead of what looks to be a promising year for the sector.

In this issue, I highlight one of the very best and most profitable banks in the country. It still sells at a great value, pays one of the highest dividends in the industry and now has solid upward momentum.

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Cabot Dividend Investor 1120

November 11, 2020

The huge market rally earlier this week gives us a taste of what lies ahead on the other side of this pandemic. The lockdowns will end and the economy will boom. Many stocks that have not participated in the market recovery will come alive.

While the market indexes have recovered, many stocks and sectors have not. Technology may be booming but energy, travel and hospitality, finance and other industries are still wallowing in bear market oblivion. It is these stocks that came alive this week and they should benefit when the virus fades and the recovery gains full traction.

It’s time to invest for the other side of the pandemic. In this issue, I highlight one of the very best income stocks in the history of the market. While the company has remained profitable, it has experienced a disproportionate selloff. The stock is still cheap but starting to move ahead of the next phase of this recovery.

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Cabot Dividend Investor 1020

October 14, 2020

These are uncertain times with the election coming up and Covid still hanging around. But instead of trying to navigate the unpredictable twists and turns in the near term, let’s focus on things that are sure to last beyond the current headlines. This is a great time to focus on issues that will drive business and the markets long beyond 2020 while no one else is looking and bargains can be had.

One issue that is certain to remain is the aging of the population. The U.S. and global populations are older now than ever before and getting older still at a break-neck pace. The trend is even more pronounced in other parts of the world.

Regardless of who is elected president, the population will get older. No matter what course the virus takes, the population will continue to age. You can take that to the bank. In this issue, I identify two of the very best health care companies in the world that are perfectly positioned to benefit from the aging trend.

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Cabot Dividend Investor 920

September 9, 2020

For the first time since the summer began, the market is faltering. The rally that thrust the S&P 500 60% higher in little more than five months is cracking.

The end of summer is being greeted by cranky investors who see a market that has run up to new all time highs despite the risks of Covid and the election. Of course, a huge rally of this magnitude needed a breather. The pullback is normal, healthy and overdue.

It is impossible to say how far stocks will fall. But, unless there is some very bad news, I don’t expect a prolonged or deep selloff. The market is still looking ahead to a positive environment where the pandemic is fading away and the economy is quickly recovering.

In this uncertain environment, I found a rare stock. It is a company that benefits from the undeniable trend toward technological proliferation. It has solid earnings growth and stock performance. But it provides these benefits with remarkably low volatility.

The stock is off the high after a rare pullback and selling at a cheap price. Historically, it has less than a quarter of the volatility of the overall market. It’s a great forward-looking investment for this uncertain environment.

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Cabot Dividend Investor 820

August 12, 2020

These are uncertain times. Risks abound, yet the market forges to new all-time highs. With so many things we can’t know about the virus and the election, it’s a good time to focus on what we do know.

Certain powerful trends will continue regardless of what the economy does or who’s President. One such undeniable trend is the aging population. The population is older now than it has ever been before. And it’s getting still older, at warp speed. The aging population is an irrefutable fact. And older people will require more health care.

This mega trend is literally transforming the demographics of the human race. It will be a huge tailwind for the health care sector in the future. At the same time, many great health care stocks haven’t gotten nearly as pricey as the overall market. And they tend to hold up well if things turn south.

In this issue I highlight one of the very best health care companies in the world. The stock is defensive and barely budged when the market crashed. Yet there are huge growth opportunities ahead as it sells cutting-edge treatments and drugs for illnesses and diseases to a public that will demand them like never before.

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Cabot Dividend Investor 720

July 8, 2020

While everyone is focused on the near-term risks and inconveniences of this pandemic, lasting changes are being forged. Major events have a way of reshaping the American psyche and changing behavior. This pandemic ordeal is forever altering aspects of our culture, creating an a unique opportunity for investors.

In this month’s issue I highlight a stock that directly benefits from the fact that people will continue to do more things from home than they did before the pandemic. It sells popular packaged food brands. Business is booming and should stay good for a long time.

A former slow-growth stock is being transformed into a fast-growing, high-yielding investment that is ideal to hold through the crisis and beyond. Investors are just beginning to realize the opportunity. But you can still get in cheap.

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Cabot Dividend Investor 620

June 10, 2020

Despite the fact that the market indexes have come roaring back near the old highs, many stocks are still cheap. Cheap dividend stocks have created some of the highest yields in a decade. While there is great opportunity, it’s not as easy as it might seem.

There is also great risk. In most cases, stock prices have fallen because the coronavirus lockdown has seriously hurt business. The financial pain is yet to be realized. Many of these high-yielding stocks will be forced to cut the dividend to free up much needed cash.

It is only those rare cheap, high-yielding stocks with safe dividends that offer great opportunity for dividend investors in this market. In this issue I highlight one of the very best. It is one of the best high-yield opportunities in a decade.

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Cabot Dividend Investor 520

May 13, 2020

The market has rallied like crazy over the past seven weeks. It’s up over 30% from the low in March. The market is already looking beyond the coronavirus to a strong economic recovery.

But stocks are trading on a rosy scenario that may not come true. While the market is always difficult to predict in the near term, there is at least a good chance of disappointment going forward. The overall market may have gotten ahead of itself and it is prudent to prepare for the possibility of more turbulence ahead.

For those reasons, the Cabot Dividend Investor portfolio is only buying very selectively. While the overall market may be shaky at this point, certain companies are thriving during the pandemic. There are niches where business is actually booming.

In this issue I highlight two stocks that are selling at bargain prices, have businesses barely affected by the pandemic, and stand to thrive in the post-Covid-19 market as well.

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Cabot Dividend Investor 420

April 8, 2020

After a better than 30% plunge at record speed, the market has staged an epic rally from the bottom. The S&P 500 has moved more than 20% higher from the lows in late March. It is likely sensing an end to the economic shutdown sooner rather than later.

That’s good news, and the market usually gets it right. But even if the economy opens back up in May and June, there is a good chance of more trouble ahead. Terrible earnings and economic reports will come and consumers will be wounded for a while.

While I believe the economy and the markets will recover, there is a good chance of another down leg in the market. In this issue, I seek to take advantage of that possibility by targeting great companies to buy and below current prices. These are fantastic companies to own that are only ever cheap in bear markets like this.

The market will come back, but probably not yet. Taking advantage of another down move is a fantastic way to profit from the market’s eventual recovery.

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Cabot Dividend Investor 320

March 11, 2020

The coronavirus is sending the market into a tailspin. It took a thriving bull market from all-time highs to the cusp of a bear market in a matter of weeks.

It is likely that this market will not significantly recover until there is more clarity on the extent of the economic disruptions it is causing and how long they will last. That seems unlikely for several weeks at least. In the meantime, the market is vulnerable to constant headline risks.

It is likely that the market has not found a bottom.

That said, this too shall pass. The coronavirus is a black swan event that is singularly responsible for the market crash. When the panic and emergency subsides, and it will, the market will likely recover and make up for lost time.
In this issue I discuss the ramifications and measures to protect your investments. As well, I identify rare securities that are timely opportunities while the market is down. These stocks have limited downside if the market continues to fall and huge upside leverage when it recovers.

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Cabot Dividend Investor 220

February 12, 2020

The rollout of the new 5G technology is an evolution that is thrusting the world into a digital age that will change the world. This new technology will have a huge effect on the market in 2020 and beyond.

Companies that benefit from 5G have a powerful catalyst for growth that will push stock prices to a new level. But finding stocks in the area that are still cheap and defensive in a pricey and uncertain market is a challenge.

In this issue I identify a company that is defensive and high dividend-paying. But, unlike most stocks in that area, it is still reasonably priced. At the same time, the company has massive exposure to 5G and a huge catalyst for growth. With this company you can play offense and defense at the same time.

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