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4 Snubbed Dividends Up to 8% Ranked Worst to First

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By Brett Owens

At some point, someone probably gave you the following investment aEURoeadviceaEURaEUR"or some version of it:

aEURoeAll you need to do to make money in stocks is buy a company with a big-name brand, sit back and let the gains roll in.aEUR

Sounds logical, right? After all, a household name is critical if companies want to keep their millions of fanboys (and girls) hooked.

Well, not anymore. HereaEURtms the proof.

Big Brands: Falling Left and Right

Just look at the worst performers last year: this rogueaEURtms gallery was stuffed with companies boasting so-called aEURoeunbeatableaEUR brand names.

Like General Electric ( GE ), whose banner ranks No. 16 on InterbrandaEURtms latest ranking. But that did zilch to keep investorsaEURtm cash safeaEUR"55% of it went up in smoke!

So Much for Brand Loyalty

Another big-name disaster slaps the word aEURoebrandaEUR right into its nameaEUR"and owns the banner once seen as the only word in lingerie: VictoriaaEURtms Secret. What did that do for shareholders? Not a thing!

Another big-name disaster slaps the word aEURoebrandaEUR right into its nameaEUR"and owns the banner once seen as the only word in lingerie: VictoriaaEURtms Secret. What did that do for L Brands ( LB ) shareholders? Not a thing!

VictoriaaEURtms Not-So Secret Losses

LetaEURtms dive into why big brands are yesterdayaEURtms news. Then IaEURtmll show you four aEURoeno-nameaEUR stocks that are much better buys.

Dire Warning Comes True

First, if any of this sounds familiar, itaEURtms because IaEURtmve been sounding the alarm about the fan faves of the S&P 500 for years, like when I dove into the Kraft-Heinz ( KHC ) dividend dumpster fire (a mess we also saw coming) in a March 5 article .

Think about it for a moment: a few years back, you simply wandered into a store and bought the labels you knew. But today, most folks spend hours online before making a big purchase, poring over reviews and hunting down the best price.

Brand strength? Forget about it. VictoriaaEURtms Secret is a textbook case: online peddlers like True & Co. and ThirdLove are clobbering it.

Shopping in the aEURoeNo-NameaEUR Aisle

So, savvy contrarians we are, weaEURtmre going to skip the slow-motion brand flameout and look to a set of proven aEURoeanti-brandaEUR stocks instead.

IaEURtmm talking about midcaps, or stocks with market capsaEUR"the value of all shares outstandingaEUR"between $2 billion and $10 billion. TheyaEURtmre off the brand-obsessed crowdaEURtms radar, giving us a rich hunting ground of bargains (and dividends) to play in.

The Classic Tortoise-and-Hare Play

HereaEURtms the funny thing about midcaps: most folks look at how theyaEURtmve performed in the last year (or even five years), throw up their hands and say, aEURoeWhataEURtms the point?aEUR

It is true that these aEURoegoldilocksaEUR plays are slow-starters compared to your typical S&P 500 name:

MidcapsLookCold aEUR

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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