“Pure Income,” the “11% Promise” and the “Ultra-Dividend Stocks”

By Travis Johnson, Stock Gumshoe, December 20, 2012

The folks at the Sovereign Society launched a new newsletter services called Pure Income this week, with the first official recommendations apparently being released yesterday — and yes, the ads for the new letter teased us about those three ads … which means we want to know what they are now.

And no, we’re not going to shell out five hundred bucks for the privilege — this letter sounds like it’s focusing on a variety of different income strategies, mostly looking for lower risk, higher yield opportunities, but among the income-focused letters I’ve seen (like the 12% Letter, the Dividend Detective, Dividend Machine, etc.) it stands out as pretty expensive with a $495 “list price” … so perhaps they’re focusing on the smaller cap names, or making less liquid options sales part of their strategy and therefore limiting the subscriber list size … or just think they’re better, I don’t know.

The service is being helmed by Evaldo Albuquerque, whose name I’ve seen bouncing around for a year or two but who I’ve never written about before … and he’s apparently got a portfolio building up now of three particular “Ultra-Dividend Stocks” to buy now, plus a half dozen or so more that he’s got ready to recommend in the near future.

Here’s how Jeff Opdyke, one of the Sovereign Society editors, describes the strategy:

“… if we don’t show you an annual yield of least 11% over the next year – you won’t pay a dime for Evaldo’s advice and research.

“As I alluded to… this is not about risky stocks.

“This is not about low-yielding bonds, treasuries or CDs..

“And it’s definitely not a ‘get rich quick’ strategy.

“The premise is rather simple – provide readers with the absolute best opportunities to:

  1. Generate safe, steady, monthly income.
  2. Target stocks that at least triple the S&P 500 dividend paying stocks average.
  3. Earn an annual yield of at least 11%.

“The result, is an incredible one-stop income letter that shows you opportunities to quickly multiply your monthly income.

“And because some of these stocks are Canadian companies, you could actually increase your portfolio’s overall diversification. Again, these stocks can reduce your risk more than if you just own shares of U.S. companies alone.”

Hard to complain about any of that, of course — though with “safety” and a dividend yield of better than 6% it’s going to be tough to be very diversified. A bit more:

“Right now, the highest yielding S&P 500 stock is an income death-trap.

“In fact, if you’re holding Windstream Corp. (NASDAQ: WIN) in your portfolio – get out NOW.

“There’s a reason it pays 9.30% right now… and it isn’t because business is booming.

“Quite the opposite, sales are weak, earnings are vanishing, and its debt-burden is growing by the day. All indicators are screaming – avoid at all costs.

“But it’s not alone, the next two top yielding S&P stocks, Pitney Bowes (NYSE: PBI) and R.R. Donnelly & Sons (NASDAQ: RRD) don’t look any better.

“I urge you not to be tempted by high yields alone. It’s likely these dividends – and the stocks – will soon disappear.

“My point is, you can’t simply pick stocks based on high yields… it doesn’t always mean you’ll get monthly checks in your pocket.

“That’s why Evaldo has developed Pure Income.

“To show you which high-yielding stocks to buy, and which ones to avoid like the plague.”

And as I said, we do get teased about the first three specific “Ultra-Dividend Stocks” that are being recommended … this universe of high-yielding stocks (these apparently average 8-9% right now, per the ad) is not that large, so I bet we’ll have heard of them all and maybe even written about them before.

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