High-Yield Dividend Stocks to Boost Your Income Now


This webinar was recorded on September 12, 2019


You can download the slides here.

Tom talked about how dividend stocks have been the best place to be in recent decades (and will be even more so in coming decades) and also shared a couple of his favorite high-growth, high-yield stocks.

Webinar Transcript:

[00:00:04] Hello and welcome to today’s Cabot Wealth webinar — High yield dividend stocks to boost your income.

[00:00:10] I’m your host Chris Preston, Chief Analyst of the Cabot Wealth Daily advisory and managing editor here at Cabot Wealth Network.  With me today is Tom Hutchinson, Chief Analyst of our Cabot Dividend Investor advisory. Tom’s here to talk about the importance of owning dividend stocks in today’s low interest rate environment, to illustrate the power of dividend income and dividend growth, and give you two of his best dividend stock recommendations.

[00:00:35] This is an interactive webinar which means we’ll be fielding your questions after Tom’s presentation wraps up. So if you have a question feel free to ask it at any time and we’ll try to get to as many of them as time allows once Tom wraps up. Just keep in mind we cannot offer advice in regards to your own personal investing situation or portfolio.

[00:00:54] First let me introduce Tom. 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 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 401ks. He has a long track record of successfully building wealth and providing a high income while maintaining and growing principal as a financial writer.

[00:01:28] Tom’s byline has appeared in The Motley Fool, Street Authority, Newsmax and more. He has written newsletters and articles for many 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 income portfolio with a stellar track record of success.

[00:01:53] He arrived at Cabot last December to take over our Cabot Dividend Investor advisory where he provides monthly issues regular weekly updates on every portfolio position, and a weekly podcast discussing goings on in the market specifically as they relate to dividend investments.  And just 9 months in his Cabot Dividend Investor portfolios boast an average total return of better than twenty one percent.

[00:02:19] Long story short Tom knows what he’s talking about when it comes to income investing, so I’ll step aside and let him do just that. Tom take it away.

[00:02:28] Thank you Chris and hello and welcome to the webinar — High yield dividend stocks to boost your income.

[00:02:35] This is Tom Hutchinson, commander behind the curtain, for the magnificent Cabot Dividend Investor newsletter — a place where you can find high income in a low and getting lower interest rate world and where you can grow your wealth at a level not thought possible with a level of risk that enables you to sleep at night.

[00:03:00] Dividends are the place to be both right now and in the future which I’ll get into a little bit later. Now if you’re already a subscriber I want to take a minute to congratulate you on a brilliant piece of decision making. You are in the right place. If you’re listening and not yet a subscriber I would strongly encourage you to move toward the light and join this newsletter.

[00:03:31] So let’s get to it.

[00:03:33] The topic – high yield dividend stocks to boost your income now. Now dividend stocks provide both a high income and a great way to build your wealth. Why emphasize the income aspect in this webinar? And the reason is because America is in an income crisis.

[00:04:00] The human population is transforming before our eyes.

[00:04:08] The human demographic is changing because of longer lifespans and lower fertility rates. The population is older than ever before in the United States and around the world. And it’s getting still older. At warp speed. The massive population known as baby boomers are getting old now. Years ago the country was a baby factory. Sixty five years go by. Now it’s a retiree factory. And baby boomers are retiring at a rate of 10,000 per day, on average, every single day.

[00:04:50] And we’ll continue to do so for the next nine or 10 years.

[00:04:55] About one third of the population is over 50.

[00:04:59] The fastest growing segment of the population is 65 and older and that section segment is supposed to grow by some 30 percent by the middle of the 20 Thirties. That population of 80 and over is growing by leaps and bounds to levels we’ve never seen before.

[00:05:20] What does this mean.

[00:05:22] Well, it means if you’re driving you’re gonna get stuck behind a lot of people who pull out into the middle of the road and become stumped.

[00:05:30] But it also means that a lot of people are gonna have to figure out a way to support themselves for 20 or 30 years even without an paycheck in retirement.

[00:05:45] You know a generation or two ago workers retired at 65 and frankly didn’t expect to live that much longer. But today people can expect to live another 20 years after retirement. Maybe even 30 years. At the same time very few workers have pensions anymore. It’s gone the way of the eight track tape. Nobody’s got a pension anymore. Social Security is there but it’s really only meant to be a supplement. And for most the quality of your financial well-being and retirement is dependent on your ability to save and, as importantly, your ability to generate a decent return from your retirement income. So it’s more crucial than ever that people save up and generate an income from savings in retirement.

[00:06:41] Well let’s take a look at how it’s going.

[00:06:45] Not very good. If you see this slide let me explain what these numbers are. The top – medium retirement account and it says fifty eight thousand and something –  that’s from Vanguard.

[00:07:00] They give a list of retirement accounts at Vanguard and the median one is about fifty eight thousand. The three thousand number next to it is what you might be able to generate in income from those savings. The next row is median private pension. Now a lot of people don’t have pensions but in the aggregate for those that do the average annual income is nine thousand three hundred seventy two dollars. And Social Security on average is a little over seventeen thousand.

[00:07:37] So what does that add up to? About thirty thousand dollars a year with that sort of aggregate average level of retirement savings. That’s a tough nut. It’s tough to live on thirty thousand a year. I couldn’t even do it when I was young. So people are gonna need more.

[00:08:00] Now it’s really a two tier problem. Not enough savings. But even let’s say you’ve done a much better job saving. Let’s say you’ve done much better than those numbers. And good for you. But you’re still going to have to figure out a way to get enough income generation from those savings to sustain you in retirement. And income is key because if you keep spending your principal and spending your principal and you run out. Then what?

[00:08:34] So it’s crucial that you get a decent return from your savings. And let’s see what we’re looking at.

[00:08:44] These are the current rates on traditional fixed rate investments — 10 year Treasury bond one point forty seven.  Investment Grade Corporate Bond Fund , three point three.  Two year CD two point seven.  Triple-A rated 20 year muni bond one point six five. Money market account one point to two, and the dividend yield on the S&P five hundred one point eighty eight percent.

[00:09:10] Now these rates just aren’t getting the job done. These are traditional fixed accounts of retirees tend to gravitate towards and for the most part after inflation and taxes it’s not going to leave you with really anything.

[00:09:28] So how do you generate enough income. Well there’s really only one game in town and that’s with dividend stocks. There are many dividend stocks paying 5, 6 percent or even higher. They’re out there. I find them. You can get a much better return.

[00:09:50] But let’s say you get a dividend stock with a 5 percent return. Sure it’s much better than the rates listed here. But that doesn’t tell the whole story. Because that’s only the beginning right.

[00:10:04] It’s sort of like, you know my son’s out of college. He got a job. That’s only the beginning salary. If he’s in the right profession he’ll make a lot more. And that’s sort of the way you need to think of these rates on dividend stocks because the right dividend stocks grow income and the dividend every single year. And it makes a big difference and it can really help fill the gap. Let me give you a couple examples.

[00:10:32] The first one is Altria and they pay a current dividend yield of seven point six percent. The past five years they have grown the dividend by an average of nine point seven percent. Now I don’t know that they’re going to grow it by nine point seven percent in the five years looking ahead, but let’s just assume that amount considering what’s possible. And you have a twenty thousand dollar investment. OK. Now you may invest a lot more, you may invest less. This is just an example. So twenty thousand dollars in Philip Morris, you get seven point six percent and an income of $1520 every year. Not bad but five years from now, that dividend grows, if it grows at that rate it has over the last five years and five years from now the income goes up to $2415. And it yields 12 percent of your initial 20 thousand dollar investment.

[00:11:41] The stock price has probably grown, so the yield on the stock won’t be that high. That’ll be the yield on your initial investment. Ten years thirty eight hundred nineteen percent fifteen years six thousand thirty percent. So as time goes on and the dividend grows you can really get somewhere.

[00:12:01] Now I chose Altria because it’s the biggest dividend on a safe stock. I know I was showing off a little bit, but I redeem myself by earning you great returns and high dividends.

[00:12:15] So let me just use a more modest dividend paying stock — Brookfield Infrastructure Partners. You have a four point one six percent yield and they’ve grown the dividend a little over 10 percent a year over the past five years. So let’s look at that one.

[00:12:32] On a twenty thousand dollar investment you currently get eight hundred thirty two dollars, four point one six.  Not bad.  Five years, assuming the same rate of dividend growth, it’s thirteen sixty four with almost a 7 percent yield on your initial investment 10 years, twenty two hundred eleven percent, fifteen years 18 percent.  You get the idea.

[00:12:57] This is how you can get a decent income and grow it over time. But it’s also important to realize that if you need to save and grow your wealth, the dividend stocks can do that very well also. But a lot of people say, well you know what is with these dividend stocks? Very very conservative people think well they’re in that market too risky, more aggressive investors — ooh, they’re boring they’re too safe.

[00:13:27] Let’s let’s look at the at the real scoop on these dividend stocks. Now if you go back and you look from 1972 through 2018 the overall market as measured by the S&P 500 returned an average of seven point three percent a year. However when you look under the hood that’s a little skewed. Stocks that pay dividends averaged eight point seven eight percent a year while stocks it didn’t pay dividends. Only two point four percent a year. That is a massive, massive difference. And stocks that actually grew dividends, had an average return of nine point six two percent over that time frame. That’s a big difference.

[00:14:12] Now why did dividend stocks as a group over time do so much better. There’s really two reasons. One the money and two the company. Here’s the money.

[00:14:27] From nineteen hundred through 2015, dividends and dividends themselves accounted for roughly 44 percent of overall market returns. That’s a big chunk. How is it so big. Well because stocks don’t always go up and dividends come in anyway even in a bull market. A lot of the time stocks are going down and going sideways. Dividends keep paying. No matter what and then you get a bad 10 year stint in the market. Dividends make a big difference.

[00:14:59] But there’s also the company. If you look at dividend paying companies, here’s a chart from seventy two through 2011 gauging the profitability of dividend paying companies and non dividend paying companies. There is a vast difference. Companies that pay dividends tend to be more profitable. It’s actually a great way to screen a stock by its ability to pay and grow the dividend over time.

[00:15:29] Sort of like someone who’s a provider for a family for 20 or 30 years. You can’t fake it. You know you walk the walk or you don’t. Companies that pay dividends tend to get reliable earnings because they’re in good reliable niches in good markets and over time they continue to ring the register. And that works. Different things go out of favor. Different things go in and out of. But companies that really pay the bills all the time consistently never really go out of style.

[00:16:09] I talked about income you can get from dividend stocks but I want to talk about how you can really grow your wealth, how those growing dividends when they’re reinvested in the stocks and you can automatically have them reinvested how that can grow your wealth.

[00:16:29] Now here’s a hypothetical example. These are just numbers. Let’s say you buy a thousand shares of a 20 dollar stock for a 20 thousand dollar investment and that stock pays a 5 percent yield with an annual dividend of one dollar. Let’s also assume that the dividend grows at an annual rate of 5 percent and the stock appreciates at an annual rate of 5 percent.

[00:16:58] Now these aren’t lofty goals. These are very doable. So let’s see what happens to that investment over 10 years if you reinvest the dividends. You can see on the column on the right the top number, you will have a little over fifty three thousand under that criteria over ten years. So that’s a twenty thousand dollar investment grows to fifty three thousand in ten years with modest criteria.

[00:17:29] Now let’s pull back a second and think about that. Let’s say you bought a house 10 years ago for two hundred thousand dollars that’s now worth five hundred and thirty thousand dollars and that’s without lifting a finger or investing another dime. Wouldn’t you feel like you made a good investment? Of course you would. And this is with relatively modest returns.

[00:17:52] But let’s take it let’s take it to another level and let’s go back and look at the 10 year returns on some actual companies. And these are companies that you don’t have to worry about losing your shirt owning, that you can comfortably own. They’re not fancy and they’re household names.  See what dividend reinvestment is done over the last 10 years.

[00:18:21] In 10 years if you invested twenty thousand dollars in the S&P 500, it would be about sixty three thousand, not bad.  Good ten years. But if you had Altria ninety seven thousand. McDonald’s one hundred thousand. Pepsi about what the market, did sixty three sixty four thousand. Visa two hundred thirty one thousand and Caterpillar ninety five thousand.

[00:18:46] Now let me point out a few things about these stocks. First of all these are stocks that have had considerable trouble over the last 10 years.

[00:18:58] Altria has had a terrible time of it recently. The stock recently hit I think a five year low and they’ve been having all kinds of stumbles with the smoking falling and trouble with its new acquisition Juul and vaping and all that. But even with trouble look what it’s done.

[00:19:21] Caterpillar got killed when the global economy floundered in 2015 and 2016. They’re very sensitive to the global economy. That stock fell over 40 percent during those years and that Caterpillar is still down about 17 percent from its 2018 high. But even with those troubles ninety five thousand.

[00:19:50] McDonald’s. Same thing. They had some stumbles along the way — ooh the foods poison. What about Chipotle and what about these other places coming up behind them. Yeah and and still 100000.

[00:20:04] Now all of these stocks did not have a charmed ten years. One of them did, Visa that didn’t have any major problems. That’s what the returns look like. Two hundred thirty one thousand. But even with problems look at the sort of returns you get which is pretty amazing.

[00:20:24] That’s over the past 10 years. Anybody can look back over what happened. What I’m going to do is I’m going to give you a couple of ideas a couple of thoughts that will be good for the next 10 years. What I think we’ll do well now. I was a little torn. Should I go for stocks that are going to basically pay a high income or stocks that are going to grow a lot. And luckily I found two stocks that I think will do both –give you a high income and nicely grow your principal over time and hopefully look great on this list 10 years from now.

[00:21:05] The first one is Enterprise Product Partners. You’re getting a six point one percent yield. Now they’re one of the largest energy infrastructure companies in the country.

[00:21:18] They’re not vulnerable to commodity prices. They ship and store oil and gas around the country. Now let me give you a little background on this.

[00:21:27] The United States is undergoing an energy renaissance, an energy boom. We are now the world’s largest producer of oil and natural gas. And last month we were the world’s largest exporter of crude oil. Now if you’re old enough, think about that.  If you can remember the oil embargo in 1973 and the ensuing gas lines in recessions and misery you can appreciate the magnitude of this feat.

[00:22:00] It seemed to usher in an age where everything was getting worse. America’s prestige slipped. The Japanese automakers kicking our butts.  Inflation always gets worse.

[00:22:14] You know it seemed to spiral downhill after that and they’d always tell you Oh you’ve got to turn your thermostat down and conserve oil and it never worked. Things just got worse. Finally peaked in twenty two thousand seven where we were importing two thirds of our oil. Oil legend T Boone Pickens said at the time that if we continued to do that, send four hundred to five hundred billion dollars overseas every year it would be the greatest transfer of wealth in human history.

[00:22:47] Well technology came to the rescue — fracking and horizontal drilling. We’ve been able to uncover vast deposits of shale, gas and oil previously not retrievable and production exploded. Now we’re number one. And you would think wow this must have been a boon for the energy industry. Not really because a lot of them are vulnerable to commodity prices. And the extra supply on the market is making it cheaper. As a matter of fact there was an oil price crash 2014 through 2017 when increased American supply interacted with a slipping global economy and oil prices crashed and there was ensuing industry carnage. And most stocks have never recovered. A lot of stocks are not vulnerable to commodity prices, not affected. And even some that are, are well diversified.

[00:23:52] Earnings have recovered for a lot of these stocks but the stock prices haven’t. They represent an incredible value right now and eventually the market will wise up and find them.  Energy Product Partners is one of the very best of the best. It’s been around for 20 years and the returns have been stellar over that time. It’s grown the dividend every single quarter for all those 20 years and it’s doing gangbusters. We don’t have enough infrastructure, pipelines and storage etc. for the current energy production and it’s estimated the industry will need forty four billion in new infrastructure between now and 2023. So opportunities abound and Enterprise has projects coming on this year and in future years that will give you higher earnings to go with that six point one percent dividend.

[00:24:56] This is probably one of the very highest quality companies in the industry. Pristine investment grade ratings. A fantastic history. A low payout ratio and the stock is still selling 30 percent below its 2014 high even though earnings have increased by an average of eleven percent a year over the last five years. It’s a great place to look for both income and growth.

[00:25:28] Then there’s AbbVie, a cutting edge biopharmaceutical company specializing in small molecule drugs. This is one of the best big drug companies in the world by far. There they have the cutting edge technology but they’re hurting right now. The stock is down 30 some odd percent from their highs a couple of years ago. They’re down 20 something percent this year. It’s having a rough time of it. The reason is this. Their top selling drug Humira, an auto immune drug ad, is by far the biggest drug in the world with like 20 billion in sales but it accounts for about 60 percent of revenues and they’re getting competition right now from overseas and biosimilars in Europe and they’re going to face competition for it in 2023 and the markets nervous about how it can fill the gap.

[00:26:27] But they have one of the best pipelines of new drugs in the industry and the best newly launched drugs in the industry. That should cover the downfall over time. In addition they merged with pharmaceutical company Allergan which will also increase revenues and further diversify them away from Humira. It’s one of the fastest growing high dividend paying stocks in the industry in the midst of a bad stint. It’s got a six point five percent yield that safe when you consider their relationship — they were spun off from Abbott Labs in 2013. When you go back from their relationship with them they’ve raised the dividend every year for forty three years.

[00:27:15] So that’s a safe high dividend on a great stock that’s cheap right now. Now it sounds good but I’ve done this before. Eli Lilly was in a similar predicament. Back near the beginning of the decade and people fretted Oh no they’ll never overcome the patent cliffs,what are they going to do. Well I bought it then and it returned about 300 percent since then. And I see this same possibility with at the.

[00:27:44] So there are two good high dividend high return stocks for the next 10 years.

[00:27:52] Now I want to close by saying this. There is a huge thing going on with the baby boomers. It’s a huge population bubble. And when they demand something, look at what they did to toys in the 50s and 60s. Jeans and rock and roll in the 60s and 70s.  The housing market in the 80s and 90s.

[00:28:20] Every market that they’re in they’re like at a Tasmanian devil force. And now they have all the money. And you have to ask yourself what will this massive population bubble that controls 70 percent of the wealth do when they’re desperate for income.

[00:28:45] Dividend stocks are practically the only game in town. So although the results I showed you are impressive. There is reason to believe they might be even better going forward.

[00:28:58] In investing it’s a good idea to get in front of a megatrend and the aging population is a megatrend and that’s something you really need to pay attention to if you’re investing for the long term.

[00:29:11] People are always talking about it What about the yield curve inversion. What about the industrial production number. Yeah they’re important. I follow those myself. But if you want to invest successfully over time in a way that makes a difference, you better pay attention to a trend like this. It’s great to have the tailwind of a megatrend at your back. It makes all the choices you make better. All of a sudden you don’t have to be 90 percent right when you pick a stock. You only have to be 50 percent right.

[00:29:45] It’s a great time for dividend stocks. People need them desperately. And they really have the wind at their backs. So with that let me close and throw it to Chris.

[00:30:00] Thanks Tom.  And I give Tom a minute to catch his breath before he starts answering your questions. I see we’ve got some coming in but feel free to send them in now. In the meantime just a bit of housekeeping.

[00:30:15] If you like what you’ve heard from Tom so far today and want to invest alongside him by subscribing to Cabot Dividend Investor. You’ll receive an email in your inbox with a special discount offer to do so that’s reserved exclusively for today’s listeners. New subscribers can try Cabot Dividend Investor for just one dollar for the first month.  And again that’s just for anyone listening to this webinar today or recorded. And when you subscribe what you get is monthly issues with market insights and updates on Tom’s three dividend portfolios, weekly updates on all his holdings, 24/7 online access to your current issue and recommendations, a complete library of back issues and recommendations, portfolio tracking, guidebooks and more plus direct access to Tom for answers to all your questions.

[00:31:09] So look for that special offer to Cabot Dividend Investor in your email inbox shortly. And speaking of questions let’s get on some now see I will give the first word to Daniel who’s been waiting very patiently. Daniel asks would you suggest investing in REITS now. And if so any specific rates.

[00:31:37] Yes. The market has loved REITS recently. High dividends which is very popular and the performance of REITS have been very good. But as a group they’re a little expensive by historical standards. So it’s important that you pick the right ones. I like a couple right now. One is Crown Castle. They’re a REIT that invests in 5G infrastructure which I think is especially good because the build out is going to continue rain or shine no matter what happens. And the other is Alexandria Real Estate because they invest in not only health care properties but research laboratories which I think is gonna be very important because baby boomers are not only going to demand income they’re going to demand health care and they’re going to demand better health care.

[00:32:38] There’s actually only treatments for five percent of known diseases at this point. And when baby boomers with all the money demand something they’re going to research to find out how to do it so REITS as a group are sort of expensive but the exceptional REITS should continue to be good investments and those are two of them.

[00:33:00] Great. Thanks for the question Daniel. Here’s a interesting one from Robert. Robert asks How do you protect against the next recession and also what would you have done in 2007 to 2009.

[00:33:19] Well I can tell you what I did do in 2007. Well first of all protecting against the next recession. There’s a couple of things. I mean you want to have some money allocated so you’re not 100 percent invested in stocks just so you get a more stable ride but also so you have money you can tap to buy cheap when the market goes down. People think Oh should I get out because a bull market is coming at some point. That really hasn’t been a successful strategy because let’s say you get out and it doesn’t come for another five years what do you do in the meantime. You get back in higher. What if you’re right in the market goes down you’re probably not going to jump in and catch a falling knife.

[00:34:07] People worry about bear markets but really they represent a great opportunity to enhance your longer term returns because you can buy cheap. And that is a big deal over time.

[00:34:21] Now in 2007 through 2009 I had money allocated in safer investments, in bonds I not like 35 percent. And then I started buying when the market fell. I wasn’t good at picking the bottom I looked like an idiot if it looked like darts at a bullseye and I was all over the place. I initially bought stuff it went down another 20 percent then it went up I bought more. But everything I have is way up now. You don’t have to be precise. You just have to do the right general thing which is to take advantage of the bear market. Now if it’s money you’re gonna need to spend in the next year or two. You might want to keep that out of the market.

[00:35:09] All right. Thanks for the question Robert. We’ve had a couple questions about EPD Enterprise Products Partners which you mentioned earlier specifically.  A couple people asked first is it an MLP master limited partnership. And then Bruce asks fiduciary Fiduciary Claymore similarly is an energy infrastructure with a high dividend but its share price is substantially degraded in the past five years. What makes EPD different.

[00:35:44] Because EPD is the biggest and the best. Now bigger isn’t always better. But in this case it is because it’s hard to get new pipelines and they tend to grant them to companies that already have them. And you need deep pockets to take advantage of all the opportunities that are out there now. Enterprise is a company that continued to raise the dividend through the financial crisis and through the oil price crash. So they’re tested and true, the biggest and the best, and I like that.

[00:36:17] Now they may not go up the fastest when it when the market starts to favor these things. But in the aggregate you’re not going to go wrong and it’s cheap and high paying right now. So that’s my first pick.

[00:36:31] OK. This couple more general questions one from James– do high dividend growers do better than high yielding companies.

[00:36:46] They generally appreciate more over time. Yes. Companies that grow their dividend also grow their earnings. That’s how they grow their dividends and over time that will generally result in a higher stock price then you’re more a typical high yielding company that pays out most of their earnings and dividends and doesn’t grow as much. So if you want a high income now. You can get it but you also want to keep an eye toward appreciation over time.

[00:37:23] Here’s another sort of general educational kind of question. Does the income produced by dividend stocks reduce when the market crashes. In other words is it reliable income.

[00:37:35] Well it’s reliable income if you have a company that can maintain the dividend during a market crash. Companies that are strapped to pay the dividends that often pay high yields might have a little trouble. But the companies that I’ve picked here, Enterprise Product Partners, the market crashed in 2008. They paid dividend right through, perfectly safe.  AbbVie as part of Abbott Labs has not only paid but raised the dividend every year for forty three years so I would say these dividends are pretty safe during a market downturn.

[00:38:16] Here’s the question. You mentioned energy earlier. Are there other sectors you lean more heavily toward in today’s uncertain uncertain market environment.

[00:38:30] It’s hard. I like energy now. But let me explain it a little bit.

[00:38:35] We’re in a weird environment where the things that have been working in the past continue to work. So a lot of the defensive stocks and real estate investment trusts and utilities that it were so good last year have also been great this year and continue to forge higher. But stocks that haven’t been doing well get neglected.

[00:38:58] It hasn’t been a market where they snatch up neglected stocks and I would consider energy in that group. They’ve been the worst performing sector of the market for the last 10 years, five years, three years, one year, year to date and three months. That’s pretty abysmal.

[00:39:18] But no sector is in the doghouse forever and no type of market trend lasts forever. Eventually energy stocks will come back into favor and they’re cheap. Now what I feel I picked with Enterprise is not only something that’s positioned to do very well if the market ever comes back to energy but they’re doing well anyway even in this beleaguered market. So in the current market I like the sectors that have been doing well but with an eye toward the future I wouldn’t ignore some of the sectors that have gotten cheap.

[00:39:58] Here’s a question from John. John asks about, you mentioned Caterpillar earlier. Do you still consider it a good long term investment.

[00:40:08] I do.  It’s hard. You know Caterpillar is hard. I always want to buy it when it’s really struggling. It’s a great stock to buy in a recession. It’s a great stock to buy like a few years ago when the global economy was way down. You can probably get it cheaper than it is now if you’re patient. But you know if you just buy it now and forget about it you’re going to do very well at Caterpillar. It’s why it’s one of the great ones.

[00:40:51]  All those stocks you listed earlier their ten year returns are all pretty strong, relatively obvious names or big names. Is that a strategy you kind of recommend going forward for the next 10 years with companies that you know are are big, some seemingly obvious but have been paying a dividend and growing it for a long time. Is that strategy you go with or do you prefer more under the radar kind of stocks.

[00:41:17] It depends. It depends where the prospects look better. I can go either way. I use the household names to show people what can be accomplished very simply with household names. I also have stocks that are that are more obscure that have done even better that I do from time to time pick. But just for simplicity’s sake I just wanted to show what can be done with the obvious ones.

[00:41:48] All right. Any closing comments or general thoughts.

[00:41:55] Yeah I think that we’re in a market that’s uncertain as a lot of the attendees have have mentioned. And that’s going to gravitate people toward the safer stocks, the less economically cyclical companies that pay dividends. So on a relative basis I think dividends of stocks in sectors that have defensive businesses are probably the best place to be right now. And for all the reasons of demographics and the need for income, makes those also fantastic places to be for the longer term.

[00:42:41] Well thanks Tom and thanks to all of you for joining us today and for all the questions. We’ll be back next month on October 23rd at 2:00 p.m. Eastern Time with another webinar this time featuring Carl Delfeld who is Chief Analyst of our Cabot Global Stocks Explorer advisory, formerly Cabot Emerging Markets Investor we’ve expanded to not just focus on emerging markets but look more globally and Carl is leading that effort.  He’ll be talking about that October 23 so mark that on your calendar.

[00:43:20] In the meantime again watch your inbox for a special offer to Cabot Dividend Investor as a reward for joining us for today’s webinar. That does it for us.  For Tom Hutchinson and the entire Cabot Wealth Network team, I’m Chris Preston. See you next time.

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