2 Incredible Income Stocks for October

The FED rate cuts delivered in mid-September have sparked a series of rotations in the stock market.

Case in point — last week, energy and utilities, typically hailed as “defensive” were the best-performing sectors. The former rallied by 1.91%, the latter surged by 1.72% while the S&P 500 fell by -0.71%.

This isn’t a case of investors preparing for a recession. The true culprit is much less sinister. That being with treasury and bond yields sliding, stocks that pay dividends are suddenly looking much more compelling.

Dividends are no laughing matter — depending on which timeframe you’re looking at, they’ve contributed between 34% and 43% of the stock market’s total returns over the years. 

But here’s the trick — you gotta know how to pick the right income stocks.

That’s because if you solely focus on dividends, you’ll be leaving behind the lion’s share of the gains. That actually comes from the much more compelling capital appreciation side of the investment equation. 

So, we want to find dividend stocks that also have attractive growth prospects. This is the main driver of increasing the value of shares, plus the size of the dividend payments over time. 

Let’s see how we can do that now with our coveted…

Income Stock Strategy

Our proprietary quant rating system, Zen Ratings, gives investors an intuitive way to evaluate stocks.

By leveraging a configuration of 115 unique factors that span factors such as value, sentiment, growth, and momentum, coupled with financials and unique AI insight, you can get the benefit of a holistic, far-reaching overview of a stock's attractiveness.

We track a total of roughly 4,600 stocks — the top 5%, or roughly 230, are given our vaunted Strong Buy (A rating) on any given day.

That is a good start at narrowing down t0 the best stocks…but there’s still a lot of legwork left to do. If you want to truly focus in on the very best stocks emanating from the Zen Ratings model, then you’ll want to turn to our Zen Strategies.

There you will find 11 finely-tuned strategies, each consisting of just the top 7 stocks. These are rigorously tested and optimized strategies leading to consistent market-beating performance.

What exactly do we mean by market-beating? How about an all-time annual return of +25.4% delivered by our Income strategy.

On top of that, Income is currently our second-best performing strategy year-to-date basis coming in at +31.4% return. Clearly that means we have tapped into serious capital appreciation with these large dividend payers. 

Now let me share with you 2 of my favorite stocks currently in our Income strategy. 

Autoliv (ALV)

Today’s first pick operates in 25 countries and has been in business since 1997. What does Autoliv do? It keeps your car safe — airbags, seatbelts, child seats, you name it, they have it.

ALV has a forward dividend yield of 2.73%. Dividends have steadily been increasing over the past 10 years, without significant drops. More to the point, at a payout ratio of 30.4%, the company’s distributions look incredibly stable.

The stock has notched 3 consecutive quarters of earnings beats. In the last report, an upsurge in Chinese sales allowed the business to raise its dividend from $0.70 to $0.85.

ALV carries a Zen Rating of A, and currently ranks in the top 1% of the stocks that we track. In fact, it’s rated 46th overall, which places Autoliv in quite rarified air. 

So, what about capital appreciation? We’re looking at a 35.08% YTD gain, which places Autoliv in the 76th percentile when it comes to Momentum. As impressive as that is, ALV is still trading at a fair valuation, as it ranks in the 77th percentile in terms of Value. In terms of Growth, it ranks in the 86th percentile.

Autoliv is a rare sight in terms of how well balanced it is. The stock also places in the top 12% with regard to both Financials and Artificial Intelligence, as well as the top 7% when it comes to Safety.

In a little over two weeks, we’ll see if that EPS beat streak will extend to 4 quarters — right now is a great time to open a position.

CVR Partners LP (UAN)

Our next entry is in the fertilizer business. It also happens to be a favorite of renowned billionaire investor Carl Icahn, and is the 4th largest holding in his portfolio. Here’s why it should find a place in your portfolio.

CVR operates with a simple business strategy — if fertilizer demand is healthy, then profit is as well — and then it gets distributed through dividends. UAN has a dividend yield of 10%, looking at the past 12 months. 

UAN has a Zen Rating of A — the stock ranks in the top 3% of the equities that we track, and is rated 95th overall out of the 4,600 stocks that we track. I

It’s also a dominant figure in its wheelhouse — CVR Partners is the top-rated stock in the Agricultural Input industry, which has an Industry Rating of A. The company’s last earnings call saw EPS grow by 48% YoY — and dividends increased from $1.92 to $3.89 in the same timeframe.

CVR Partners LP shares have rallied by 17.57% since the start of the year. That puts it in the top 12% in terms of Momentum — but there’s a strong reason to believe the surge will continue, as the stock also ranks in the top 18% when it comes to Growth.

But there’s more — UAN also ranks in the 85th percentile in terms of Financials, and the top 7% with regard to Value..

Right now, all signs are pointing that the company’s next earnings report, due October 27, will be a success — and there’s still time to get in on the action at a great price.

Interested In More Great Stock Picks?

The 2 stocks highlighted above are just a fraction of what you get from our proven Income strategy. 

That’s because each day our system recalibrates — and Zen Strategies members get access to the 7 top Income stocks based on 115 different factors. 

See all Top 7 Income stocks here >

However, maybe income stocks are not your thing. Perhaps you would like to see all 11 of our market beating strategies. 

Everything from growth to value to momentum. Large caps and small caps. Even our top performing AI Factor model. Each one has been curated to generate market beating performance by narrowing down to just the top 7 stocks. 

You can explore the Zen Strategies service yourself here. 

Or better yet, let 45 year investment veteran Steve Reitmeister share with you all the insights on this service in this vital video that very much lives up to its name: 

10 Minutes a Month to Beat the Market > 

What to Do Next?

• 77 Best Stocks NOW! >
• See All “A” Rated Stocks with +32.52% Average Annual Return >
• 2 New Stocks to Buy from Steve Reitmeister >

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