Seeking Alpha
Value, long-term horizon, dividend investing, portfolio strategy
Profile| Send Message|
( followers)  

Summary

  • Price appreciation for first quarter of 39.5% and dividend increase during first quarter of 23.3%.
  • Dividends approaching $20K/year.
  • Yield of 7.58%, YOC of 7.95%.

The first quarter was a relatively volatile quarter with no huge market direction up or down. For example, on January 2, 2014 the Dow closed at 16,441.35 and as of Friday, March 28, 2014 the Dow closed at 16,323.06. The S&P on the other hand closed on January 2, 2014 at 1,831.98 and as of March 28, 2014 it closed at 1,857.62.

So, despite the market as a whole making relatively small movements overall since the beginning of the year, our portfolio has done comparatively pretty well.

A lot of the success is due to buying when others were in fear. We bought a lot of mREITs at rock bottom prices in the last half of last year. This tactic paid off as prices recovered and stabilized in the first three months of this year.

2014, Quarter 1 Investment Portfolio

Company

#

Value

YOC

Weighted Goal

Dividends*

ConocoPhillips (NYSE:COP)

78

$5,263.44

4.30%

$5,000.00

$216.00

Kinder Morgan Energy Partners (NYSE:KMP)

153

$11,191.95

6.67%

$10,000.00

$831.60

Vanguard Natural Resources LLC (NASDAQ:VNR)

210

$6,268.50

9.21%

$10,000.00

$522.00

General Electric (NYSE:GE)

90

$2,286.00

3.78%

$5,000.00

$79.20

3M (NYSE:MMM)

21

$2,795.52

2.93%

$5,000.00

$72.00

Coca-Cola (NYSE:KO)

125

$4,805.00

3.08%

$5,000.00

$140.40

Philip Morris (NYSE:PM)

138

$11,178.00

4.42%

$5,000.00

$518.40

Procter & Gamble (NYSE:PG)

65

$5,062.20

3.08%

$5,000.00

$154.80

Leggett & Platt Inc. (NYSE:LEG)

130

$4,153.50

4.12%

$5,000.00

$154.80

Triangle Capital (NYSE:TCAP)

270

$7,028.10

7.76%

$10,000.00

$583.20

Wells Fargo (NYSE:WFC)

240

$11,788.80

3.00%

$5,000.00

$288.00

American Capital Mortgage Investment (NASDAQ:MTGE)

922

$18,375.46

13.66%

$15,000.00

$2,397.60

Annaly Capital Management, Inc (NYSE:NLY)

1025

$11,767.00

10.28%

$10,000.00

$1,231.20

American Capital Agency Corp. (NASDAQ:AGNC)

525

$11,802.00

11.25%

$10,000.00

$1,364.40

Dynex Capital Inc (NYSE:DX)

2050

$18,573.00

12.92%

$15,000.00

$2,214.00

Realty Income Corp (NYSE:O)

255

$10,480.50

5.30%

$10,000.00

$558.00

UBS ETRACS Monthly Pay 2x Leveraged Mortgage REIT ETN (NYSEARCA:MORL)

670

$14,813.70

19.86%

$10,000.00

$2,563.20

HCP, Inc (NYSE:HCP)

327

$12,056.49

5.54%

$10,000.00

$712.80

Healthcare REIT, Inc (NYSE:HCN)

190

$11,063.70

5.31%

$10,000.00

$604.80

Johnson & Johnson (NYSE:JNJ)

57

$5,468.01

3.00%

$5,000.00

$151.20

Illinois Tool Works (NYSE:ITW)

15

$1,211.40

2.42%

$5,000.00

$25.20

Target Corporation (NYSE:TGT)

93

$5,528.85

2.76%

$5,000.00

$158.40

Textainer Group Holdings Limited (NYSE:TGH)

139

$5,152.73

5.28%

$5,000.00

$262.80

McDonald's Corporation (NYSE:MCD)

30

$2,864.10

3.44%

$5,000.00

$97.20

StoneMor Partners (NYSE:STON)

270

$6,723.00

8.19%

$10,000.00

$648.00

Emerson Electric Co (NYSE:EMR)

20

$1,307.00

3.07%

$5,000.00

$24.00

NTT DoCoMo, Inc (NYSE:DCM)

130

$2,122.90

1.91%

$5,000.00

$79.20

Apple (NASDAQ:AAPL)

10

$5,328.70

2.88%

$5,000.00

$122.40

AT&T Inc (NYSE:T)

300

$10,290.00

5.58%

$5,000.00

$550.80

American State Water Co (NYSE:AWR)

165

$5,379.00

2.94%

$5,000.00

$133.20

UBS ETRACS 2X Leveraged Long Wells Fargo Business Development Company ETN (NYSEARCA:BDCL)

253

$7,046.05

14.21%

$10,000.00

$1,090.80

AmeriGas Partners LP (NYSE:APU)

217

$9,031.54

7.75%

$10,000.00

$730.80

Rogers Communications Inc. (NYSE:RCI)

162

$6,402.24

4.57%

$5,000.00

$298.80

Prospect Capital (NASDAQ:PSEC)

466

$5,088.72

12.14%

$10,000.00

$205.20

PetMed Express Inc. (NASDAQ:PETS)

100

$1,332.00

0.00%

$5,000.00

$0.00

Total

$261,029.10

7.95%

$260,000.00

$19,784.40

*annual

Source: Cash King portfolio as of March 21, 2014

Portfolio Performance

This quarter was an extremely interesting quarter. First, we saw the portfolio skyrocket from $187,078.45 to $261,029.10 a 39.5% increase. Some of these gains, roughly $35,000, were additional contributions. Even accounting for the contributions it is roughly a 20.8% increase. This was largely accomplished with the purchase of T, MORL, NLY, AGNC, MTGE and AGNC at rock bottom prices, as well as many other companies.

The overall yield of 7.58% dropped from 8.57%, which is mostly due to the rise in prices and also the last dividend cut in many of the mREITs. This also accounts for the drop in Yield on Cost from 8.31% to 7.95% currently. I expect Yield on Cost to increase above 8% and maintain above 8% for the foreseeable future though starting next quarter. This should continue to grow as the dividends in the mREIT sector have bottomed and the rest of my portfolio should continue increasing their dividend.

Total dividends were changed from a monthly figure to an annual figure and have increased from $16,041.60 to $19,784.40 or a 23.3% increase.

This last quarter PETS, RCI and PSEC were added to the portfolio. WFC increased their dividend after the end of this reporting period so that will help going forward. I'm expecting various other increases with some of the more notable ones being MORL and maybe some of the mREITs next quarter.

Conclusion

With my number one priority being dividends and income this was a mixed quarter. On one hand, it was good because total dividends went up substantially. On the other hand, yield on cost and yield went down. The positive side to that is they mainly went down due to price appreciation within the portfolio. However, since I don't plan on selling, this price appreciation is only on paper right now and brings my profitability down (yield).

I will continue to focus on undervalued securities going forward and where I can maximize reward vs. risk going forward. As I said, I believe the portfolio is setup for future success and this quarter will hopefully be a good quarter filled with several very profitable dividend raises and dividend payouts.

Source: Dividend Portfolio Approaching $20K Annual Income