{"id":15837,"date":"2024-06-20T17:00:26","date_gmt":"2024-06-20T21:00:26","guid":{"rendered":"https:\/\/mtatradeoftheday.com\/?p=15837"},"modified":"2024-06-20T16:54:14","modified_gmt":"2024-06-20T20:54:14","slug":"a-bunch-of-malarkey","status":"publish","type":"post","link":"https:\/\/mtatradeoftheday.com\/a-bunch-of-malarkey\/","title":{"rendered":"“A Bunch of Malarkey”"},"content":{"rendered":"

Editor’s Note:<\/strong> My colleague Marc Lichtenfeld, the Chief Income Strategist over at The Oxford Club, loves dividend stocks more than anyone I know.<\/p>\n

So today, I’ve invited him to share his knowledge on the “best of the best” among dividend-paying stocks.<\/p>\n

I also recommend that you check out Marc’s upcoming broadcast on a little-known stock that has caught the eye of none other than Nvidia<\/a>, the newly anointed most valuable company in the world.<\/p>\n

For months, Marc’s been downright giddy about some big news that’s fast approaching<\/a> for this tiny tech stock.<\/p>\n

He’ll have more details for you at his free event – click here to reserve your spot.<\/a><\/strong><\/p>\n

– Ryan Fitzwater, Publisher<\/p>\n

\n

Most people would describe me as patient.<\/p>\n

Generally, things roll off me like a defensive end off of Lamar Jackson.<\/p>\n

At the poker table, I’ve been known not to enter a pot for a half-hour if I don’t have good cards or the right opportunity to bluff. And I’ve gone weeks without making a stock or options trade if I don’t have the right setups.<\/p>\n

So, it’s no surprise that I’m a dividend investor and a big proponent of dividend growth stocks. You don’t buy a dividend stock if you’re planning on collecting the payout and then selling it a few weeks later.<\/p>\n

Owning dividend stocks requires patience.<\/p>\n

Or does it?<\/p>\n

There’s a type of dividend payer that dramatically outperforms the market over the long term and can lead to big, short-term gains as well.<\/p>\n

Dividend initiators.<\/strong><\/p>\n

When a company pays a dividend for the first time, it is sending a very strong signal to Wall Street that its cash flow is strong and very likely to grow. Most companies don’t recklessly part with their cash unless they know they have a lot more coming in the door.<\/p>\n

So a dividend initiation is a gigantic vote of confidence.<\/p>\n

And over the long term, owning stocks that initiated dividends pays off big-time.<\/p>\n

From 1973 to 2023, dividend initiators returned a staggering 14,000%, while companies that didn’t pay dividends returned just 743%. For an investment of just $1,000, that’s the difference between making $7,430 and making $140,000.<\/p>\n

Here are some examples of how powerful dividend initiations can be…<\/p>\n

Just look at Covenant Logistics<\/strong> (Nasdaq: CVLG).<\/p>\n

It initiated a dividend in January 2022.. And in the next year and a half, its stock more than doubled.<\/p>\n

\"Covenant<\/a><\/p>\n

Same with Ferrari<\/strong> (NYSE: RACE)…<\/p>\n

It initiated a dividend in May 2016…<\/p>\n

And its stock is up 975% since.<\/p>\n

\"Ferrari<\/a><\/p>\n

And then there’s Nvidia<\/strong> (Nasdaq: NVDA).<\/p>\n

Since it initiated a dividend in 2013…<\/p>\n

Its stock is up an extremely rare 36,000%!<\/p>\n

\"Nvidia<\/a><\/p>\n

But despite the mountain of data to the contrary, there are still critics who say companies that pay out dividends to shareholders are wasting their extra cash.<\/p>\n

As President Joe Biden would say, “That’s a bunch of malarkey!”<\/p>\n

Let’s look at why that argument doesn’t hold water.<\/p>\n

Dividends = Stronger Earnings<\/strong><\/p>\n

Studies have shown that companies that pay dividends have more reliable earnings than those that don’t.<\/p>\n

Douglas J. Skinner and Eugene F. Soltes, professors at the University of Chicago and Harvard University, respectively, concluded, “We find that the reported earnings of dividend-paying firms are more persistent than those of other firms<\/em><\/strong> and that this relationship is remarkably stable over time. We also find that dividend payers are less likely to report losses<\/em><\/strong> and those losses that they do report tend to be transitory losses driven by special items.”<\/p>\n

So non-dividend-paying companies may use their cash to acquire growth, but dividend-paying companies have stronger and more consistent earnings. And a vital rule of investing is that stock prices follow earnings.<\/p>\n

If earnings are better and more reliable for dividend-paying companies, that should mean dividend-paying companies’ stocks perform better.<\/p>\n

And we know that they do.<\/p>\n

In fact, dividend stocks beat the pants off of non-dividend-payers.<\/p>\n

So the next time a friend says a company should have better things to do with its cash than pay dividends, wish them luck with their investing.<\/p>\n

Just keep in mind that you’ll likely be the one picking up the tab for lunch in a few years, because you’ll be the one who can afford it.<\/p>\n

\"Logo\"<\/p>\n

YOUR ACTION PLAN<\/strong><\/h2>\n

Dividend initiations are some of my favorite “trigger events” to look for as I search for stocks that are about to soar.<\/p>\n

I’ll be discussing some of my other favorite trigger events during an urgent broadcast on Thursday, June 27.<\/a><\/p>\n

Why so urgent, you ask?<\/p>\n

I recently uncovered a fascinating company that’s on track to experience a trigger event as soon as July 1… so I want to get the word out to as many people as possible before the window of opportunity closes.<\/p>\n

Hint: Nvidia revealed recently that it has invested in five artificial intelligence stocks… and this is one of them.<\/p>\n

(Be careful, though… After you learn all my secrets to trading trigger events, you might be picking up the tab at lunch a lot more often!)<\/p>\n

Go here to reserve your free spot at this exclusive event.<\/a><\/strong><\/p>\n

\n","protected":false},"excerpt":{"rendered":"

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