The 6%+ Dividends To Buy As AI Surges And Layoffs Arrive

By now, it’s glaringly obvious: AI is replacing workers. And it’s boosting corporate bottom lines as it does.

I call this the “growth-without-hiring” trend, and it’s accelerating. Today we’re going to grab our share in the form of big dividends (up to 8.1%) and upside, too.

Latest Payroll Report Tells a New (Yet Familiar) Story

The latest evidence that “growth without hiring” is the real deal? The September ADP payrolls report, which showed that companies cut 32,000 positions. The August numbers were also revised to 3,000 losses, not the 54,000 gains originally reported.

With numbers like those, you’d expect the US to be in recession, or close to it. Nope. According to the Atlanta Fed’s up-to-the-minute GDPNow indicator, the economy grew a fit 3.8% annualized in the just-completed third quarter.

Numbers from companies themselves back up this shift. IT consulting firm Accenture plc (ACN), for example, laid off more than 11,000 employees in the last three months and has said more cuts are coming as part of its AI-focused restructuring.

But while Accenture’s workers pack their banker’s boxes, its profits are soaring: In its fiscal 2025 fourth quarter, revenue jumped 7%. For fiscal 2026, it expects a 2% to 5% revenue boost and a 5% to 8% increase in adjusted EPS. (Too bad ACN’s 2.6% divvie isn’t enough to get our hearts racing.)

“Growth Without Hiring” Goes Beyond Tech

We’ve talked about this trend before, first in tech and then as it’s spread into other industries, including insurance and even agriculture. And this is where our dividend opportunity comes in, including that shot at payouts up to 8.1%.

To be sure, that payout is not coming from the popular AI plays. I probably don’t have to tell you that NVIDIA (NVDA), Microsoft (MSFT), Alphabet (GOOGL) and Meta Platforms (META) pay somewhere between nothing and almost nothing.

Instead, we’re buying through closed-end funds (CEFs), for three reasons:

1. They pay big dividends (of course!)—around 8% on average.
2. They offer big discounts to net asset value (NAV, or the value of their underlying portfolios) and …
3. They let us access shares of both AI providers and AI integrators.

That last point is vital because most of the profits from AI will flow to companies that use the tech, rather than those that develop it. Accenture is a good example, but think of insurers using AI to read medical records and process claims in minutes. Or banks using it to make better decisions on exactly who they want to lend to—and who they don’t.

With that, here are three CEFs that come at it through developers, users and (our sweetest dividend deal of the three) firms feeding AI’s bottomless power demand.

“Growth-Without-Hiring” Dividend #1: NASDAQ 100 Dynamic Overwrite Fund (QQQX)

QQQX, as the name says, holds the stocks in the tech-heavy NASDAQ 100. But unlike index funds, it pays a big dividend: to the tune of 8.1%. The fund can pay that high divvie thanks to its strategy of selling call options on its portfolio.

Under this scheme, it sells option buyers the right to buy its stocks in the future at a fixed price. It keeps the fee it charges for that right. Hence, that healthy 8.1% payout.

This strategy generates the most cash when markets are volatile, and more volatility is likely, considering the rocket ride stocks have been on.

QQQX’s portfolio includes all the big tech kingpins, plus some firms on the user side of AI, too, like travel-site operator Booking Holdings (BKG), which uses AI to help travelers save time by letting them ask specific questions about a vacation property—like whether it has a beach view, for example. It also offers an AI summary of reviews. No more endless scrolling.

The fund also sports an 8.2% discount as I write this, which is good … but not quite as good as it was earlier this year, when it sunk to double digits:

That’s why I rate QQQX, a holding in my Contrarian Income Report advisory, a hold for now. Once it flips to a buy in our portfolio, members of the service will know right away.

“Growth-Without-Hiring” Dividend #2: Kayne Anderson Energy Infrastructure Fund (KYN)

Artificial intelligence is supposed to be graceful, just code humming in the cloud. Yet it’s anything but lightweight. AI is an energy hog.

Every time a chatbot like ChatGPT spits out an answer, it pulls from enormous racks of servers running in data centers. Those servers draw power on the scale of small cities.

AI can’t happen without natural gas. Renewables are growing, for sure, but most new data centers are still tied to gas-fired plants. Gas is abundant and reliable, and it fires up quickly when demand surges. Which means every new AI deployment is more business for the gas lines feeding those power plants.

KYN is a savvy CEF play on this situation, sporting a portfolio that reads like a who’s-who of big US pipeline operators, including Kinder Morgan (KMI), ONEOK (OKE) and master limited partnerships (MLPs) like Energy Transfer LP (ET) and Enterprise Products Partners LP (EPD).

(Bonus: With KYN, you get a simple form 1099 for reporting your dividends at tax time, not the complicated K-1 package you—or your accountant—would have to deal with if you bought these MLPs “direct”.)

KYN collects “tolls” on the gas flowing through its holdings’ pipes and hands them to us as a 7.5% divvie.

And while plenty of investors have made the connection between AI’s power needs and utility stocks, they haven’t yet made the leap to pipelines. That’s handed us “second-level” thinkers a likely-time-limited chance to buy KYN an 11%-off deal that’s actually gotten cheaper this year:

My take? It’s only a matter of time before the “first-level” crowd realizes just how good AI will be for gas pipelines—and sends that discount hurtling toward a premium.

“Growth-Without-Hiring” Dividend #3: Gabelli Dividend & Income Trust (GDV)

GDV focuses on innovators from across the economy—particularly finance stocks—set to cash in as they integrate AI into their businesses. Top holdings include Mastercard (MA), JPMorgan Chase & Co. (JPM) and American Express (AXP).

GDV yields 6.2% and hasn’t cut its payout since the 2008 financial crisis. The fund’s discount had been narrowing lately, but it recently widened to 11%, giving us another chance to get in cheap:

I expect that discount to keep shrinking as AI optimizes sectors like finance. GDV is an especially sweet deal when you consider that the fund has been outperforming the S&P 500 on a total-return basis this year: 18% to 15% as I write this.

Throw in a tailwind from “growth-without-hiring”—especially as the trend spreads from tech to other parts of the economy—and you get a sense of the opportunity for upside (and high, steady dividends) here.

Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: How to Live off Huge Monthly Dividends (up to 7.6%) — Practically Forever.

Disclosure: none