Editor’s Note: Regular readers of Trading With Larry Benedict know how powerful a consistent flow of income can be.
So today, we’re bringing you an essay from our special guest, Brad Thomas. Brad is a value investor and advisor with three decades of experience and a whole lot of lessons learned under his belt.
And tonight at 8 p.m. ET, he’s sharing a strategy for generating income no matter what chaos is happening in the markets.
He’ll also share a free recession-proof recommendation with everyone who tunes in.
If you haven’t already, there’s only a few hours left to RSVP. You can do that right here.
Then, keep reading to hear more about Brad’s path to beating inflation…
According to a OnePoll survey, more than half of all baby boomers worry they’ll never be able to retire.
And that was in mid-2021… before intense volatility and a bear market struck this year.
Frankly, I get that fear. It’s a real and unfortunately, valid concern. And the inflation we’ve seen since hasn’t made the situation any better.
In fact, research firm Indeed Hiring Lab reports there’s been a recent uptick in retirees returning to the workforce.
And the BMO Real Financial Progress Index adds that about a quarter of Americans have delayed their retirement due to inflation.
For my part, I’m not planning on retiring any time soon. I love what I’m doing too much. But I know not everyone is in the same position I’m in. And retiring in today’s economy seems like an uphill struggle.
That’s why I’ve made it my mission to give you the tools you need to retire – in comfort.
That goal is still very much possible, and it’s something my team and I at Wide Moat Research strive to show every single day.
We use our decades of real estate and stock market experience to find you the best income-generating ideas out there.
And the best way of gaining extra income from the market is through what we call SWAN stocks. These dependable companies help you Sleep Well At Night, knowing that no matter what the markets are doing…
They’ve got excellent chances of paying you dividends every year regardless. That’s what I want to show you today.
A SWAN in Action
Unlike “sucker yields” – stocks that pay out far too much compared to their share price – SWAN stocks have sustainable dividends and strong businesses supporting them.
Altria (MO) is one excellent example of a SWAN. This tobacco company has a 190-year-old history and yields 8.5%. This includes a 6% dividend hike at the end of August.
Today, that amounts to an annual $3.82 per share.
Here’s what sets that impressive dividend apart from sucker yields…
On top of its impressive history and solid plans for the future – which, incidentally, include phasing out of cigarette sales altogether over time – its dividend is well-covered by $4.84 in 2022 earnings.
In other words, Altria is making more than enough money to pay its dividend, raise its dividend, and grow its operations from here.
In fact, Altria has raised its dividend every year for 53 years straight. That makes it a dividend king: a company that boasts a half-century or more of increasing its payouts.
That kind of track record isn’t exactly a guarantee of this continuing into the future. But you’d better believe Altria has no intention of ruining it unless faced with a full-on catastrophe.
It also intends to grow that dividend further. If everything goes as planned, that will be by about 5% every year – about 3% faster than the bond market’s 30-year inflation estimates.
Here’s what that means in simpler terms: A SWAN stock like Altria, with its safe 8.5% yield, offers not only dividends you can count on…
But exponentially more inflation-adjusted income over time.
Inflation Has Nothing on SWANs
Now, dividend kings don’t grow on trees. Nor does your “average” SWAN stock.
But they are out there. I follow a whole list of them, in fact.
But for our purposes today, let’s stick with Altria to show how much SWANs can positively affect your portfolio.
My team ran some numbers through a backtest screening system. And here’s what we found…
Had you bought Altria in 1986 (as far back as the system measures) and reinvested its dividends… Your dividend income stream would have grown to $25 for every $1 spent.
That’s an incredible 18% annual income growth over 36 years thanks to the compounding of exponentially growing dividends and shares.
Or, to put it another way, buying Altria back then and reinvesting all the dividends would have left you with the kind of money that retirement dreams are made of.
And even if you hadn’t reinvested those dividends, you’d still be looking at an incredibly reliable income stream growing at 2.5x the rate of long-term inflation.
That’s the power of a SWAN stock.
Now, I’m not saying go out and put all your money into Altria today. There are plenty of other opportunities out there that offer SWAN benefits. And some for those who don’t have 36 years to wait.
In fact, that’s why I’m holding a very special event TONIGHT. At 8 p.m. ET, I’ll share my unique strategy for generating regular income even amid the current volatility we’re experiencing.
I’ll also give away one recession-proof play for free tonight.
So if you want to build a portfolio to withstand – and outlast – economic woes… please RSVP to tonight’s event – which will kick off in just a few hours. I hope to see you there!
And in the meantime, happy SWAN (sleep well at night) investing,
Brad Thomas
Editor, Intelligent Income Daily