 | | A 20% Yield With a Good Chance of an Upgrade | | Marc Lichtenfeld, Chief Income Strategist, The Oxford Club | The Holy Grail for Income Investors
Imagine getting a 100% income yield... every single year... without options, leverage or any other gimmicks.
It's finally possible... thanks to something we call "Extreme Dividends." If you're an income investor, you don't want to miss this. | | | Editor's Note: Today, Marc reveals how an energy company with an impressive yield could boost its dividend safety and inspire investor confidence.
Investors are drawn to this oil producer because of its sky-high 20% yield.
But what if they could earn 50X their money... without betting on a hot-and-cold company?
Recently, Marc uncovered a unique technical indicator that reveals the key windows for making winning trades.
He calls the indicator "CAT-5 profits" because its formation reminds him of the telltale patterns that form around hurricanes as they grow - and because of its power.
A single Category 5 event can strike the market and leave profits of up to 5,850% in its wake.
Click here to find out more.
- Mable Buchanan, Assistant Managing Editor
When I decided to write about EnLink Midstream (NYSE: ENLC) and its 20% yield, I remarked sarcastically to our Director of Research, "I'm sure it will be a safe yield."
Twenty percent yields almost never are.
I won't go so far as to say that EnLink's yield is safe - it's not. But it does stand a real chance of receiving an upgrade next year. | | | EnLink has raised the distribution 19 times since 2011, though often just by a fraction of a penny. Still, the distribution is 3 1/2 times higher than it was eight years ago.
That being said, EnLink lowered the distribution in 2009 and 2010. SafetyNet Pro looks very unfavorably at companies that cut their dividends. | | | SafetyNet Pro is a groundbreaking tool that predicts dividend cuts with stunning accuracy. With it, you can determine the dividend safety rating of nearly 1,000 stocks. Access to SafetyNet Pro is reserved exclusively for subscribers of Marc's newsletter, The Oxford Income Letter. To learn more about SafetyNet Pro and The Oxford Income Letter, | | |
It indicates that the dividend is not sacred to management and it will reduce it when times get tough.
The company has grown its distributable cash flow (DCF) sharply this year because it acquired its master limited partnership. Wall Street currently expects DCF to be $727 million in 2019 compared with $231 million last year.
Management had previously forecast DCF to be between $715 million and $735 million. In its most recent quarterly report, management said DCF would be closer to the lower end of that range.
Here's where this creates an opportunity for an upgrade...
The current consensus estimate for DCF next year is $712 million - slightly lower than this year's estimate. SafetyNet Pro is penalizing EnLink for the lower expected cash flow in 2020.
If DCF comes in at the bottom of the range this year, if the company can generate a few million dollars more in cash flow than Wall Street forecasts - to where it comes in above 2019's total - and if all else remains equal, it will receive an upgrade.
Who knows, maybe the company is sandbagging this year's estimate just to be eligible for a SafetyNet Pro upgrade next year...
Additionally, the company's debt is too high. But just by a little. | | | You Won't Believe Who We Found Inside This Dilapidated WarehouseTwo men were just found inside this abandoned-looking Long Island building.
One is the most famous TV personality of all time. The other is a money legend.
More details here. | | | EnLink's debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) ratio is 4.2.
SafetyNet Pro's cutoff is 4. If debt-to-EBITDA is at 4 or higher, the rating is downgraded.
Management told Wall Street to expect debt-to-EBITDA to be between 3.9 and 4.2 at the end of 2019. So if company executives can bring that number lower, even below 4, there's an opportunity for another upgrade.
Both the debt and 2020 cash flow are big "ifs."
But if either or both of those numbers get in line with what SafetyNet Pro (and I) look for, you could see a big upgrade from a rating that indicates the dividend is not very safe to one that shows the distribution has a low risk of being cut.
This will be a fun one to follow, especially considering its 20% yield.
Dividend Safety Rating: D If you have a stock whose dividend safety you'd like me to analyze, leave the ticker symbol in the comments section.
Good investing,
Marc
P.S. I'm always on the lookout for shocking opportunities like this that help my readers boost their savings while the rest of the market looks the other way.
That's why I'm so excited to share my latest research into CAT-5 profits. A single one of the forecasts I made using this telltale indicator earned my readers 2,381% in profits...
Click here to find out why I'm confident this indicator could make you 50X your money. | | | | | | Attention: Have you heard about this audacious new movement?!
Starting with an announcement late in the day on December 11, 2019, American investors may be in for a nasty surprise. That's when one of the most popular assets in America could suddenly be made illegal.
Learn the five (easy) steps to prepare yourself now. Click here to continue reading. | | | | - More From Wealthy Retirement - | | | | | | | | | "My Brain Is Operating at Its Highest Level!"
 For years, Adam Kearns struggled with brain fog. Then the software sales executive discovered the natural memory-boosting miracle recommended by one of America's top doctors.
After just four days, he reported online, "My thoughts were clear. My mental energy levels stayed up... I feel like my brain is operating at its highest level. This is a lifesaver!"*
If you've had a "senior moment" in the last 30 days, you need to see this.
*Results not typical | | | | | |
The Oxford Club is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that although our track record is highly rated by an independent analysis and has been legally reviewed, investment markets have inherent risks and there can be no guarantee of future profits. The stated returns may also include option trades. 
No comments:
Post a Comment