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Is it worth it to subscribe to Dividend Hunter?
Who is Tim Plaehn, the guy who started Dividend Hunter?
Can you trust him to help you build a dividend stock portfolio that “helps you pay your bills for life”?
Are there any other better alternatives to Dividend Hunter?
Who Is Tim Plaehn?
Tim Plaehn started his career off serving as an F-16 fighter pilot in the United States Air Force while studying mathematics.
Then, he went on to become an instructor for pilots.
After serving, he spent eight years as a stockbroker and licensed financial advisor.
He said that he struggled for years to make money for both himself and his clients.
He learned from other people and tried different stock trading strategies, but none of them worked.
Then, he came up with his own strategy which is a dividend investing strategy.
Tim Plaehn’s Dividend Hunter Stock Recommendations
So, are Tim Plaehn’s Dividend Hunter stock recommendations good?
Can you really follow these stock recommendations and have a comfortable retirement?
First of all, dividend investing is nothing new.
Is dividend investing risky?
All investing comes with risk.
Just because it pays dividends doesn’t mean it’s risk-free.
There are two things you need to keep in mind:
- Not ALL dividend stocks are good
- There is NO guarantee that they will continue to pay a dividend
- Some so-called high-yield dividend stocks are also risky (i.e. you can lose your capital)
Dividend Hunter recommends the following:
- A diversified portfolio of 20+ high-yield stocks
- A mix of monthly and quarterly paying stocks
- The average yield of over 8% across the portfolio
Are these high-yield dividend stocks safe in the long term?
Is it really suitable for your investment portfolio?
Let’s go through some of Dividend Hunter’s past stock recommendations and see how they performed over the years.
Tim Plaehn started Dividend Hunters in 2014.
Below are the closed positions for some of Tim Plaehn’s recommended dividend stocks as of June 2016.
As you can see, the largest loss was -83.1% while the largest gain was 57.69%.
In fact, there were three stock recommendations that had a loss of more than 70%.
The reason for such a massive drop in share price is that all three companies went bankrupt.
In 2017, the energy stocks such as KMI and WMB that were recommended in 2015 went down by a lot and never really recovered.
It was recommended to sell KMI in July 2017 to take a loss of about 50%.
InfraCap REIT Preferred ETF which was recommended in 2017 is still under water today.
However, it’s not all losing recommendations.
The recommended REITs in 2017 (e.g. STORE Capital, Arbor Realty Trust) generated positive returns.
In 2018, Dividend Hunter recommended a few new stocks.
Here are two of them:
- PermRock Royalty Trust with an entry price of $16 (the current price as of July 2022 is $8.94)
- TPG RE Finance Trust Inc with an entry price of $20 (the current price as of July 2022 is $10.23)
So, both PermRock Royalty Trust and TPG RE Finance Trust Inc are still 50% down from the time they were first recommended.
In 2019, Dividend Hunter also recommended a few new stocks.
One of the stocks is PAGP with an entry price of $23.25.
As of today, its share price is $11.09 which is down more than 50% from the time of the recommendation.
Also, its dividend has been cut by half in 2020.
In 2020 and 2021, Tim Plaehn recommended a lot of preferred shares in Dividend Hunter.
In case you are wondering what is the difference between preferred and common stock.
“The main difference is that preferred stock gives no voting rights to shareholders while common stock does. Preferred shareholders have priority over a company’s income, meaning they are paid dividends before common shareholders.”
However, there’s a big risk of buying preferred stocks.
Shares are often sensitive to changes in interest rates.
Because preferred stocks often pay dividends at average fixed rates in the 5% to 6% range, share prices typically fall as prevailing interest rates increase.
With the Fed increasing interest rates aggressively to tame inflation, the share price of preferred stocks has been going down.
After going through Tim Plaehn’s past stock recommendations, here are a few takeaways:
- The number of losing stocks with a loss of about 50% or more is quite high
- The turnover of the stocks in the portfolio is also considerably high
Personally, If I am a retiree or an investor who is trying to build a solid investment portfolio for retirement, I would not be comfortable seeing such huge volatility (and also drawdown) in my portfolio.
There is a reason that the stock is paying a high dividend because the risks associated with investing in the stock demand such a high dividend.
If you look at the dividend yield of the high-quality dividend stocks called “Dividend Aristocrats”, the dividend yield is much lower.
“A dividend aristocrat is a company in the S&P 500 index that not only consistently pays a dividend to shareholders but annually increases the size of its payout. A company will be considered a dividend aristocrat if it raises its dividends consistently for at least the past 25 years.”
The risk of investing in such high-quality dividend stocks is much lower.
Also, the shares of these Dividend Aristocrats have a high probability of going up over the long term.
Below is an example of a Dividend Aristocrat.
For dividend investors, it’s very important to invest in fundamentally strong companies as well.
Because a high yield of 8% or more is just not worth the risks if the company could potentially go bust in the end.
So, it’s very important to do your own research and not rely on other people to make your investment decisions for you.
Getting ideas from different sources is okay.
But, at the end of the day, I do my own research on those ideas and make the decision based on my own analysis.
I also stumbled upon a past subscriber’s review of Dividend Hunter.
Dividend Hunter Pricing
So, what do you get by subscribing to Dividend Hunter?
And how much does it cost?
Is it worth it?
As a subscriber, here’s what you get:
- The 36-Month Accelerated Income Plan: blueprint plus the recommended stocks
- The Monthly Dividend Paycheck Calendar
- 7 High-Yield Monthly Dividend Payers to Own Today
- 3 MUST-OWN Dividend Hunter Stocks to Buy Today
- Monthly Issues of The Dividend Hunter Newsletter
- Weekly Buy recommendations. Every Tuesday I’ll send you an update on the current ‘best buys’ in the portfolio
- Regular training and education live sessions
- A 60-day free trial to our new dividend tracking and forecasting software: Divcaster
It is $49 for 3 months and is automatically renewed quarterly.
So, it’s $196 per year.
Here’s another catch.
Your subscription to The Dividend Hunter comes with a free trial to Divcaster.
Divcaster is a dividend tracking and forecasting software that lets you know how much dividend income you’ll receive and when from all of your holdings.
[By the way, Stock Rover offers dividend tracking and forecasting tools for free. Plus a lot of other powerful portfolio management tools and stock research and analysis tools.]
This free trial will last 60 days.
After the 60 days, your card on file will be charged $99 /year to continue your Divcaster membership for 12 months and will renew annually at the same rate.
Is it worth paying $196/year?
I don’t think so.
There are a lot of good stock research and analysis platforms that help you find high-quality dividend stocks or ETFs.
For example, Seeking Alpha gives you a lot of helpful tools to find, research and analyze dividend stocks.
For each stock, you get ratings (i.e. with “A+” being the highest and “C-” being the lowest) on the following:
- Dividend safety
- Dividend growth
- Dividend yield
- Dividend consistency
On top of that, you get its dividend history as well as future dividend estimates from analysts.
Seeking Alpha not only helps you evaluate this stock in terms of dividend payouts but also helps you evaluate the stock in terms of “Value”, “Growth”, “Profitability”, “Momentum” and “Estimated Earnings Revisions”.
For Seeking Alpha, there are three types of pricing plans:
- Basic: Free
- Seeking Alpha Premium:
- Seeking Alpha Pro: $2400/ year (mostly for hedge fund managers)
Right now, there is a free 7-day trial for you to test drive it and see if it works for you. If you decide to get it, there is a special 30% discount for you by using this link.
With the basic free version, you can only get very limited access to Seeking Alpha stock in-depth news and analysis.
You also won’t get access to Seeking Alpha Author Rating and Quant Rating, Top-rated stocks, and all the premium stock analyses.
So, is it worth paying for Seeking Alpha Premium?
$167/year works out to be about $13.90/month (i.e. $0.47/day).
A cup of Starbucks coffee costs about $2.75.
Personally, I have been using Seeking Alpha Premium for my own stock research and analysis.