Contemplating investing a substantial sum? How about $10K or even a hefty $100K? Your best bet, in my opinion, is to dive into the world of dividend magnet stocks and simply ride the tide as Fed Chair Jay Powell fuels their ascent to the moon!
Historical Context: The Last Fed Rate Cut and a 124% Surge
Remember the last time the Federal Reserve slashed interest rates? The broader market catapulted by a staggering 124%! Powell’s aggressive printing of money set the stocks on an exhilarating trajectory.
Today, certain dividend stocks are poised to deliver returns akin to that phenomenal surge of 124%. Seizing these opportunities now stands as the optimal path to amassing riches and shield oneself from the clutches of inflation.
Back when Powell kickstarted the printing press, inflation reared its head for the first time in four decades – a rare occurrence that caught many off guard.
As Powell takes a victory lap for solving a problem he arguably contributed to, it signals a prime moment to hunt for stocks discounted amidst recession apprehensions and secure them before they transcend from the bargain bin.
Let’s take a clue from how we approach the dividend grower, UnitedHealth Group (NYSE:), scooping it up each time it dips. Identified as a standout stock for 2024, UnitedHealth’s stock price lagging behind its payout marked a unique opportunity that warranted immediate attention.
UnitedHealth profits from the perpetual rise in health insurance premiums – a driver that played a role in Powell’s inflationary saga. Coupled with robust earnings from the tech-enriched Optum unit, responsible for pharmacy benefits, running clinics, and offering data analytics services, the company ensures an annual double-digit dividend increment.
Diving Deeper: The Appeal of UNH as a Hidden Yields ATM
Our experiences with UNH in the Hidden Yields advisory have been nothing short of profitable. By strategically investing in UnitedHealth Group, we’ve established a reliable source of gains, effectively transforming UNH into an “in-house” ATM for our benefit!
On days when patience is key, as highlighted during our Q2 “Subscribers-Only” Webcast, UNH may exhibit sideways trading patterns. However, past demonstrations prove that it merely sets the stage for an impending surge towards its lucrative payouts.
Insightful Investments: The UNH Dividend Magnet Phenomenon
A closer look reveals that UNH’s price surges have consistently surpassed its dividend payouts, positioning the stock in a favorable “Hold” stance. Missed opportunities to acquire UNH during specific junctures are akin to a mild parental reprimand – “I’m not angry, just a tad bit disappointed. Just like conversing with my kids!”
Another intriguing dividend magnet prospect we explored was Amgen (NASDAQ:) back in May. Anticipating gains from a dovish Fed stance, Amgen shone as an ideal candidate benefiting from Powell’s pronounced affections towards stocks wielded high dividend potential.
An Episodic Journey: Amgen’s Dividend Magnet Configuration
The initial market sentiments towards Amgen were subdued, with critics overlooking the pivotal role rare diseases played in its progression. With a vast array of rare diseases awaiting remedies and only a fraction currently addressed by effective medicines, Amgen’s robust expertise in research, development, and commercialization is a formidable advantage.
Remarkably, since 2020, Amgen’s rare disease product sales have skyrocketed from $2.2 billion to $3.9 billion. Key offerings like BINCYTO, designed for acute lymphoblastic leukemia, registered a commendable 48% year-over-year surge. The recent acquisition of Horizon Therapeutics (NASDAQ:) further expanded Amgen’s rare disease product portfolio, exemplified by Tepezza’s breakthrough in treating thyroid eye disease.
The cumulative effect on Amgen’s financials is undeniable, with an accelerating top-line growth driving an impressive 26% surge in stock performance since its inclusion in our Hidden Yields roster in April, translating to a substantial 61% annualized growth.
If the boats for UnitedHealth Group and Amgen have already sailed past, keep your spirits high. Numerous other enticing dividend magnets await in the wings, courtesy of Powell’s continued generosity in the monetary domain.
For instance, NextEra Energy Partners (NYSE:) rollicked the dividend scene with yet another rapacious raise last month.
The “yieldco” offspring of NextEra Energy (NYSE:) since 2014, NextEra Energy Partners is ardently committed to renewable energy pursuits. As the yieldco procures energy assets such as wind farms, the parent firm orchestrates their operational efficiencies.
While once deemed a benchmark for renewable energy initiatives in the utility sphere, the essence of renewable energy entities faced a challenge in 2022. Powell’s stringent rate policies unfurled doubts surrounding the sustainability of yieldcos, given their perpetual financing necessities essential for business operations.
Despite sporting a lofty 13.4% yield, a reflection of prevalent skepticism, NextEra Energy Partners continues its robust dividend escalations, boasting an exceptional streak of raising payouts – 39 consecutive quarters!
Charting Growth Trajectories: NEP’s Consistent Dividend Hikes
While market sentiment might paint NextEra Energy Partners as a risky venture, CFO Brian Bolster’s recent testament offers assurance. Not requiring growth equity injections until 2027, the entity can capitalize on prevailing low-interest rates to refinance its debt strategically, thereby enhancing cash flows exponentially.
Fostered by the Fed’s newfound benevolence, NextEra Energy Partners, alongside several others, adopts a stealthy ripe approach leveraging dividends to elevate their strategic prominence.
Disclosure: Brett Owens and Michael Foster are contrarian income investors scouting for undervalued stock opportunities in the U.S. markets.