The safe, easy way to earn 15% annually on stocks

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Why chase the market when we can let 15% a year —each year – come to us?

This is the perfect time to buy what I call “hidden yield” investments. These are stocks that pay dividends today. But, more specifically, they have an important catalyst this will help drive up their share prices in the coming year.

This trigger is so powerful that these stocks are sailing at 15% or more each year. That’s really great when other stocks and even bonds are buried around us.

We’ll talk about these stocks and their “dividend spark” in a moment. Let’s go back to the why first.

This bear market started in January. We quickly identified the train wreck with a “Look out, ahead!” With the Federal Reserve And last but not least tightening, the arrival of the bear was almost inevitable.

But let’s not forget that bear markets are much shorter than bull markets. They only last about ten months on average. Our current bear is over the month nine.

(Of course, ten is an average, not a promise or guarantee. We won’t get free pizza if it lasts longer. The 2000-02 bear market dragged on for several years. The financial crisis gave us a downdraft.)

My point, cue the Stones, is that time is on our side. And while turbulence is likely ahead, we can use that to our advantage and build the 15% shares a year cheaply.

L3 Harris Technologies (LHX) is such an opportunity. The cup yield is one we would do usual yawn at – LHX pays 1.9% today and it’s rare for this current dividend to exceed two.

But LHX over time is the kind of safe dividend stock that makes us rich. Since early 2010, the stock has returned 393% to investors.

Most of that comes from capital gains, but we can thank the dividend for it!

You see, LHX’s payout acted like a “dividend magnet” pulling its price up. (Yes, sometimes investing is that simple.) The payout increased by 409%. This is no coincidence.

Every time the payout rate exceeds the dividend, the stock price catches up. That’s the dividend magnet at work, honey!

Of course, these are past achievements. But the future also looks rosy.

Not for warm and vague reasons, I admit. LHX makes what the US needs to compete militarily with China, especially at sea. It is a leader in anti-aircraft defenses for US naval ships and aircraft.

The company expects its next dividend hike in March. Mark this catalyst on the calendar.

Let’s apply this magnet hunt to utility stocks. Utilities have done well this year as investor “refugees” have been inundated with bad ideas like profitable technology and crypto. ‘Utes’, the old dividend stocks, are back in vogue.

That’s nice from a price point of view, but it’s challenging to put new money to work. After all, if stocks are popular, that means their returns are too lower. Not good for us purists who do it for the dividends.

So, let’s grab a magnet.

Again, a simple but successful formula. We buy the fastest growing dividends.

Next Era Energy

NO
(NO)
has been a favorite of ours for years for this reason. NO is the largest renewable energy developer in North America. It is one of the fastest growing dividends in the utility sector.

NO is one of those great dividend stocks that is rarely cheap because everybody know it’s great. In fact, Chief Financial Officer (CFO
financial director
Kirk Crews recently said a ten percent payout increase is likely for years to come.

Double-digit annual dividend increases from a safe utility –does it get better?

Brett Owens is chief investment strategist for Contrary Outlook. For more great income ideas, get your free copy of his latest special report: Your Early Retirement Portfolio: Huge Dividends – Every Month – Forever.

Disclosure: none