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  • Why Realty Income's Portfolio Risks Are Exaggerated [View article]
    You'e welcome, Rose. It has been fascinating to watch the fluctuation of the comparative yields. Since I've been watching these three, to my knowledge, all the yield swings have been due to "macro" economic events and to market sentiment. All three have been steady performers in terms of profitability.

    Ironically, according to David Fish:

    NNN has the lowest 5-year dividend growth rate: 1.6%
    WPC has the highest 5-year dividend growth rate: 10.4%
    O is in between with a 5-year dividend growth rate: 4.8%.

    Based on that metric, one might think WPC would trade at a lower yield than O and (particularly) NNN. Maybe NNN has a more dedicated and more tenured following.

    I think this endeavor will always be at least as much art as it is science!
    Jun 7 09:05 PM | 1 Like Like |Link to Comment
  • Why Realty Income's Portfolio Risks Are Exaggerated [View article]
    My pleasure, Maybenot. I've held WPC since July 2009 after it was recommended by a columnist in Forbes. The first purchase was at $23.99. At a $3.58 dividend, that's a 14.9% yield on cost. I've watched it closely for five years. WPC has raised the dividend every year since 1998. It appears to have more beta than most REITs even though their performance has been very steady. When it gets extended, I'll sell a little. When the price gets down to the point that it yields 6.0%, I try to buy more.
    Jun 7 05:04 PM | Likes Like |Link to Comment
  • Why Realty Income's Portfolio Risks Are Exaggerated [View article]
    Thanks for the nice article. A $60 fair value would provide a 3.6% yield at the current dividend. That seems stretched. One easy way to monitor Mr. Market's assessment is to track NNN, O, and WPC. I hold all three of these in my retirement income portfolio and they are core, long-term holdings. Periodically I will add additional shares to my core "minimum" amounts when I think one or more is undervalued.

    NNN should probably trade at a discount to O because of the relative credit quality of its tenants are slightly lower than O's. But it is a very well managed REIT and it will soon be a Dividend Champion, so it gets extra points on my scorecard for that. In any case, if you consider these three long-term dividend growing, triple-net REITs as relatively equal in strength, you can track their relative yields over time and you can find buying opportunities.

    NNN currently yields 4.5%, which in my opinion is a fair value. My portfolio allocation goal for NNN is 2.0% and it is currently underweight at 1.2%. (It is at the minimum goal I've set for it.) If it gets to a 5.0% yield, I will try to add shares up to the 2.0% weighting. If it dropped in price to a 5.5% or 6.0% yield, I would overweight it.

    O currently yields 5.0%, which in my opinion is a better value, somewhat underpriced relative to NNN. My portfolio allocation goal for O is 3.0%, and when its price was weak awhile back I added more shares. It is now at 5.2% of the portfolio. To the "fair value" point, I would peg fair value in the current environment at a 4.5% yield, which would be $48.67. If the price increased to the point that the yield was less than NNN's, I would shift some money. At $60, I would be back to my minimum position in O.

    WPC currently yields 5.5%, which in my opinion is the best value at present. It is my best long-term holding. Some investors see their tenants as being more risky, which likely accounts for the yield variance. I think WPC is a very solid, well-run REIT. I would put fair value for WPC at a 4.5% yield, which would be $79.55 at the current dividend. My target portfolio allocation for WPC is 3.0%. Recently, WPC traded at a 6.0% yield, and I became overweight at 6.6% of the portfolio. Currently, WPC is my largest holding and KMP is number two at 6.5%.
    Jun 7 11:36 AM | 12 Likes Like |Link to Comment
  • A Review Of The Dividend Safety Superstars [View article]
    Joys, yes! Sleuth, not always. When I saw 3.5%, it was a "deja vu" moment. A few years ago I added more shares of FLO thinking the yield was near 4%, only to find out that I had calculated the yield on the pre-split dividend. At that time I wasn't able to devote the time necessary to keep a "tight reign" on a large portfolio (that Dave Shafer mentions, above). When I realized my mistake I heard my Dad's voice inside me saying, "Measure twice, cut once."
    Jun 6 02:34 PM | 3 Likes Like |Link to Comment
  • Royal Dutch Shell Changes Rules, So Now What? (Part 2) [View article]
    Thanks for your analysis, Mike. It's helpful to see your thought process. I think it is a solid company but I exited RDS.B awhile back (about $4 too early!) because of its rapid price appreciation. I'm long AVA but I haven't studied ESV. Keep us posted!
    Jun 6 12:01 PM | Likes Like |Link to Comment
  • A Review Of The Dividend Safety Superstars [View article]
    Hey, Bob. Thanks for this good article. Dividend safety is always an important concern and it is particularly timely given that the market averages continue to make new highs.

    As for Maybenot's question, I'm not surprised FLO is in the group. It is a great company that I once held in the portfolio. I sold it after some strong price appreciation and I would like to own it again. I have a question, however. They have just raised the dividend to 12 cents per quarter, or 48 cents for the year. The new dividend will be 2.3% at today's price of $20.66. When I saw 3.5% in your "Today's Yield" column, I'm wondering if I'm reading something wrong. I haven't missed a stock split, have I? I think FLO at a 3.5% yield would be a good buy.

    As for Moderation's question about the chart showing OHI with an 8.3% current yield when its $2 dividend represents a 5.2% yield at today's price of $38.17, did you mean for that to be your yield on cost or the current yield?

    Jun 6 11:42 AM | Likes Like |Link to Comment
  • 20 Dividend Champions To Buy Today [View article]
    Thanks for launching this Champion project, Chuck. With much of today's market coverage devoted to the latest momentum favorites, you're giving appropriate air time to some stocks that will be safe long-term growers. It's easy for dividend-focused investors to be sidetracked by the glitz of the go-go names. I look forward to the remaining articles.
    Jun 5 03:13 PM | 9 Likes Like |Link to Comment
  • Linn Energy: The Worst Appears Over For This 10%-Yielder [View article]
    Critter, i'm curious what percentage of your portfolio you've allocated to LINE or LNCO. Is your stake part of a diversified portfolio or are you rolling the dice on this?
    Jun 3 11:39 PM | 1 Like Like |Link to Comment
  • Deere & Company: Worth $137 Per Share [View article]
    Thanks for a cool article, Jason. I used a tool called a Stock Selection Guide (developed many years ago by Better Investing) to project a possible high price during the next five years of $159.40, and a possible low price of $81.60. I explained my rationale for buying DE in this April 23 SA article:
    Jun 3 10:21 PM | Likes Like |Link to Comment
  • Linn Energy: The Worst Appears Over For This 10%-Yielder [View article]
    Thanks for your article, Bret. I'm long LNCO and I'm hoping your assessment is accurate. The theme song for Barron's "flip-flop" (praising LINE, then trashing LINE) could be "I Liked You Better Before I Knew You So Well."
    Jun 3 10:12 PM | Likes Like |Link to Comment
  • B&G's CEO Stepping Down At Critical Juncture [View article]
    Thanks for a good article, Cruncher. I'm a former holder of BGS shares but currently have no position. Although I appreciate Wenner's skill in the use of leverage to grow the company and in growing the dividend, the debt level caused me some concern.

    I believe any possible market angst about the CEO transition is countered by the takeover activity in the space, and surely BGS is on several takeover radar screens. It makes sense to me that Wenner's announced retirement would enhance BGS' appeal. A big potential acquirer could say to the Board of Directors, "Let us save you the trouble of looking for a new CEO...."
    Jun 3 09:59 PM | Likes Like |Link to Comment
  • Procter & Gamble: Still Cheap, And Now With A 3.20% Dividend Yield [View article]
    Albert, you've started a good conversation about a great company. If a person (i.e., my child or a good friend) is committed to buying PG as a long-term, buy-and-hold core position, then I would not discourage him or her from initiating a partial position at the current level. The "magic number" for me to buy a full position would be $73.55 (which, at the current dividend, represents a 3.5% yield). I think any time you can get PG at a 3.5% yield, you're looking at a great opportunity. I'm long PG and my "add to" price is $73.55. But, if someone is building a position, the number suggested by Mitul ($75) would be, in my opinion, a good level to add a little more.
    Jun 3 09:41 PM | 6 Likes Like |Link to Comment
  • Kinder Morgan: Was That The Bottom? [View article]
    Thanks, Casey. I was in there buying with you. With hedge fund snipers out there, I've quit trying to identify bottoms, but I believe LNCO and KMP were bargains in the price ranges you identified. I'm now overweight in those two positions (along with O, WPC and STWD). I appreciate CapeCapMgmt's reminder that a 10-20 year horizon is a good perspective to keep.
    Jun 3 09:32 PM | 2 Likes Like |Link to Comment
  • A High Income Portfolio For A More Prosperous Retirement [View article]
    Bob, thanks for another good article. This could be a chapter in Investing 101. You explain the various categories with brevity and clarity. You have a balance of some good, solid stocks and you've "juiced" the yield with a basket of relatively conservative high-yield funds, etc.

    One of our SA readers sent me a private message a few months ago asking for some high-yield suggestions because he needed to boost his current income. I'm going to send him a link to your article because you have addressed his concern and (IMO) you've taken some steps to minimize the risks. If one wanted a slightly lower risk exposure, one could substitute some of the blue chips you mentioned for some of the higher yielding securities. The trade-off, as you said so well, is that lower risk may mean lower yield.

    This one is a keeper to pass on to anyone who is new to investing. Thanks!
    Jun 3 12:38 PM | 2 Likes Like |Link to Comment
  • Our Retirement Income Business Plan - The Legacy Addition [View article]
    I was a subscriber to Josh's newsletter for two or three years and I think Morningstar is wise to develop a product based on that work.

    I believe modern digital technology will equip companies like Morningstar, Vanguard, Fidelity, Schwab, Motley Fool, etc., to be able to say to an investor, "You give us the parameters and we (i.e., our computer) will tailor a portfolio to your specifications." At some point in the not-to-distant future, I believe an investor will be able to electronically submit a design like Bob's business plan to an investment service and their computer will "spit out" a portfolio. A customer like Bob or one of us will be able to say, "I want this portfolio design to outlive me. I want this plan to stay in place for my survivors unless they changes the parameters." The portfolio would be updated by the company quarterly, semi-annually, or annually (at the owner's discretion). We have the technological capability to do this. It will happen when companies see the potential for profit and the risk of losing customers to small "boutique" shops that can to this kind of tailored portfolio or to other big houses that develop it first.

    As with index funds, the fees will go down as more companies provide this kind of "tailored" service.
    Jun 2 01:30 PM | 4 Likes Like |Link to Comment