Tim Lutts Names Four Favorite Stocks for Long-Term Growth


Here's a transcript of the MoneyShow interview with Timothy Lutts, Chief Analyst, Cabot Stock of the Month

Four Favorites for Long-Term Growth
Published: 06/03/2015 10:00 am EST 

Timothy Lutts is editor and chief analyst for Cabot Stock of the Month; here, he looks at four favorite stocks: a renewable energy yieldco, an electric car maker, a recent IPO in the gourmet burger sector, and a technology firm involved in high-definition video.

Steven Halpern:  Our guest today is Timothy Lutts, editor and chief analyst for Cabot Stock of the Month and head of the Cabot Publishing Group, which—for some 45 years—has published many of the industry’s most respected and widely followed newsletters. How are you doing today, Tim?

Timothy Lutts:  Great, Steve, glad to talk to you.

Steven Halpern:  At Cabot, you oversee a dozen advisory services ranging from small-caps and options, global investing, as well as growth- and value-oriented services, and the newest one focuses on dividends. 

Could you walk us through the decision to introduce a dividend service and how important dividends are in the market cycle now?

Timothy Lutts:  Sure. This publication—called Cabot Dividend Investor—aims to give investors—and steer investors toward—sources of regular income that they’re missing because interest rates are so low. 

Interest rates, I think, are staying low and I think investors, especially as baby boomers head into retirement, I think they’re going to gravitate toward these various sources of dividends.

In particular, you know, blue chip stocks, of course, but there’s a great trend toward increasing dividends.

Since 1900, in fact, the average dividend payment on stocks has been about 5.4%, but today it’s down around 2%, so just to get back to average, and get us back to 5.4%, which is something to look forward to.

The other thing happening with dividends is some people are coming out with new vehicles, you know that in recent…okay, so, we’ve had REITs and then we’ve had NRPs, but the newest wrinkle is things called yieldcos. Yieldcos, there are only a few of them out there so far, they’re pretty young.

Steven Halpern:  Speaking of yieldcos, you recently highlighted one in particular called TerraForm Power (TERP).  Could you just briefly explain what a yieldco is and walk us through what you like in particular about TerraForm?

Timothy Lutts:  TerraForm, like most of the yieldcos, is focused on the energy industry, specifically renewal energy, solar and wind in particular, and what they do is, the parent company (or companies) drop down their secure assets, which have long-term contracts, and therefore, a steady cash flow looking decades ahead.
And then, investors are encouraged to invest in these for the steady dividends, which—in the case of TerraForm—is a 3.2% yield. 

Some are higher, so investors get the dividend. The parent companies get a new influx of cash for investment in new development and I think there’s going to more of them coming out in the years ahead.  TerraForm is one.

Steven Halpern:  
Among growth stocks, you’ve been a long-term fan of Tesla (TSLA). In fact, you’ve been bullish on the shares at many times when the market was most skeptical. What kept you confident in the outlook for Tesla and what’s your outlook now?

Tickers Mentioned: Tickers: TERP, TSLA, SHAK, AMBA

More information on Cabot Stock of the Month More Cabot in the News
Sign up for free Cabot Wealth Advisory e-newsletter

Headline News

Stock Picks

Loews Corp.

This undervalued stock has strong future earnings growth expectations.


Biogen is the market-share leader in treating multiple sclerosis.


One of Paul Godwin’s favorite stocks in his Cabot Emerging Markets Investor portfolio.

Cabot Wealth Advisory

Tesla Model 3 vs. Chevy Bolt: Which Affordable Electric Car Is Better?

By Timothy Lutts on September 26, 2016

The Tesla Model 3 and Chevy Bolt are the first two affordable electric cars with a driving range of more than 200 miles. Let’s see how they stack up - and what they could mean to Tesla Motors (TSLA) and General Motors (GM) stock. Read More >

Does Alibaba (BABA) Stock Measure Up to Amazon (AMZN)?

By Paul Goodwin on September 23, 2016

Alibaba (BABA) is the Amazon (AMZN) of China. But does BABA stock measure up to AMZN stock? Let’s break it down!Read More >

As Stock Market Trends Change, Invest in these New Leaders

By Michael Cintolo on September 22, 2016

History tells us that all stock market trends change, and if you don’t recognize the leaders of that change early, you risk missing out on the next big winners.Read More >