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I'm a 64-year-old individual investor focused on dividends in a Retirement Income Portfolio. I'm in a second career. As Director of Community & Property Care, I'm part of a management team that oversees 123 residential retirement units for a non-profit organization. I've been a member of... More
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  • Our Roller-Coaster Market

    How was your ride on Monday's roller-coaster? Here's a summary of my ride.

    Exxon (NYSE:XOM)

    On Thursday and Friday (August 20-21), I bought my first-ever shares of Exxon, which I believe is the "best of breed" oil major with the safest dividend. XOM now yields slightly over 4.0%. XOM's high yield for the past five years has been:

    2010 3.1%

    2011 2.8%

    2012 2.8%

    2013 2.9%

    2014 3.1%.

    Like many of you, I've been watching Exxon decline in recent months. I decided last week that I would initiate a position if XOM moved into 4% range ($73). I took a 1% stake in Exxon on August 20 and another 1% on August 21. Dennis Gartman is one of the most knowledgeable persons about commodity trends and he said late last week (on CNBC's Fast Money) that he thinks the bottom is in for oil.

    Over the weekend, I decided to devote 4.0% of my retirement income portfolio to Exxon. My major activity during the Monday morning frenzy was to purchase more XOM. When the dust settled, my basis in Exxon is $71.62, for a 4.08% yield on cost at the current dividend. XOM has increased the dividend annually since 1982.

    Exxon is one of three companies with a AAA rating by S&P, along with Johnson & Johnson (NYSE:JNJ) and Microsoft (NASDAQ:MSFT). At one point during the day, I briefly considered buying some MSFT when the yield was at 3.0%.

    My frame of reference is dividend income, with a priority on dividend safety and growth. Sometimes a broad market selloff presents an opportunity to trim lower-yielding stocks and add some "accidental high yielders." We are in the midst of an opportunity to pick up some stocks that are rarely on sale. Exxon closed Monday at $68.72, yielding 4.2%.

    Care Capital Properties (NYSE:CCP) and Ventas (NYSE:VTR)

    Healthcare REIT Ventas has been 4.0% of my portfolio. Last week I received shares of Care Capital Properties, a skilled nursing facility REIT which was spun off by VTR. Prior to the spinoff, I put in a limit order to buy enough shares of CCP at $32 to bring the stake to 2.0% of the portfolio. After the spinoff, CCP traded around $34 or $35.

    Over the weekend, I weighed the possibility of selling VTR to fund more shares of XOM and to enlarge the stake in CCP. Management has indicated that CCP will have a higher yield than VTR. CCP's projected quarterly dividend is $.57, or $2.28 annually, for a yield of 7.0% at Monday's closing price of $32.63.

    In retrospect, the best strategy going into Monday was to have a limit order to buy a blue chip at a low-ball price. I inadvertently did this with CCP. It was one of the stocks that opened slowly on Monday. I discovered that my $32 limit order actually filled at $30.

    Shares in stocks like Johnson & Johnson and PepsiCo were spiking down in what is now being called Monday's "flash crash." VTR held up nicely on Monday morning, so I sold my stake at $58.82 in the first 20 minutes of trading. VTR closed Monday at $56.87, yielding 5.13% at the new indicated post-spinoff dividend of $2.92. VTR's credit rating is BBB+.

    International Business Machines (NYSE:IBM)

    IBM is a controversial stock since they are going through a major change of focus (to services and the cloud rather than hardware), but I think IBM presents a good opportunity. IBM had fallen below my target allocation of 4.0% of the portfolio, so I added a few shares on Monday at $142.70 to bring it back to that level. IBM closed Monday at $143.47, yielding 3.6%. IBM has raised the dividend annually since 1995. Credit rating: AA-

    3M (NYSE:MMM)

    3M is a classic company whose stock price has been under pressure in recent weeks. My target allocation for 3M is 6.0%, and it had fallen slightly below that level, although the price held up relatively well last week. I watched 3M's price action on Monday. The stock hovered around the 2.9% yield level. It sold off somewhat in the afternoon, so I purchased a few shares at $139.89. 3M has raised the dividend annually since 1958. MMM closed Monday at $138.58, yielding 3.0%. Credit rating: AA-.

    Enterprise Products Partners (NYSE:EPD)

    On July 21 I opened a 2.0% position in EPD, which I consider the best pipeline company. I have been adding shares on weakness, with a goal of raising the stake to 4.0%. The last shares were purchased on Friday at $27.49. EPD has raised the distribution annually since 1997. EPD closed Monday at $26.13, yielding 5.8%. Credit rating: BBB+.

    Main Street Capital (NYSE:MAIN)

    MAIN generally is recognized as the best and safest business development company. It had been 3.0% of my portfolio. On Friday, I raised this stake to 4.0% by purchasing shares at $28.45. MAIN has raised the dividend annually since 2010. It closed Monday at $27.15, yielding 8.0%. Credit rating: BBB.

    CenterPoint Energy (NYSE:CNP)

    This utility is a recent acquisition. I bought shares on August 3 at $19.20. This company operates electric transmission lines in the Houston, Texas area. They do not produce the electricity. Neither do they operate retail meters. They transmit electricity from producers to local electric companies. CNP also operates a gas business. CNP closed Monday at $18.49, yielding 5.4%. Credit rating: BBB+.

    Stag Industrial (NYSE:STAG)

    I purchased shares of STAG in July. It is a real estate investment trust that specializes in industrial properties. The current yield is 7.9%. STAG has been on my watch list since it was in the high $20s. When it dropped to the $20 range, I became a buyer. My basis is $20.14. STAG is 2.9% of the portfolio, just under the 3.0% target allocation. STAG closed Friday a $19.31. Credit rating: BBB.

    Omega Healthcare Investors (NYSE:OHI)

    OHI is another recent acquisition. I initiated this position in July at a cost basis of $36.35. This real estate investment trust owns properties that are leased to skilled nursing operators. Until recently, it has been the only pure play SNF REIT. The spinoff from Ventas, Care Capital Properties, is now another "pure play" in the skilled nursing arena. OHI currently yields 6.4%. My target portfolio allocation for OHI is 3.0%. OHI closed Monday at $34.40, yielding 6.4%. Credit rating: BB+ (below investment grade).

    Emerson (NYSE:EMR)

    Emerson closed Monday at $46.36, yielding 4.1%. EMR has raised the dividend annually since 1957. They are in the process of shedding an underperforming division and this has the market a little concerned. I think this is a good move. My target allocation for EMR is 6.0% of the portfolio. EMR has an A credit rating. Emerson's high yields for the past five years are not as dramatic as XOM, but this still reveals the opportunity it presents:

    2010 3.6%

    2011 3.3%

    2012 4.1%

    2013 3.5%

    2014 2.8%.

    Johnson & Johnson

    JNJ's annual dividend is $3.00, so $100.00 would represent a 3.0% yield. It closed Monday at $92.82. JNJ is 5.9% of my portfolio, just shy of the 6.0% target allocation. JNJ has raised the dividend annually since 1962. Credit rating: AAA.

    Procter & Gamble (NYSE:PG)

    PG closed Monday at $69.14, yielding 3.8%. PG is shedding some less profitable divisions and the stock has underperformed in recent quarters. The payout ratio is high. My target allocation for PG is 4.0% of the portfolio. PG has raised the dividend annually since 1956. Credit rating: AA-. Recent high yields for PG were:

    2010 3.3%

    2011 3.7%

    2012 3.8%

    2013 3.3%

    2014 3.4%;

    WP Carey (NYSE:WPC)

    Real estate investment trust WP Carey closed Monday at $57.98, yielding 6.6%, which I think is amazing. WPC is 6.0% of the portfolio. It has been my best performing stock over time. WPC is considering restructuring their investment management business, which augments their traditional triple-net business. They are also launching a business development division (it will provide capital, like a business development company). WPC has raised the dividend annually since 1997. Credit rating: BBB.

    Realty Income (NYSE:O)

    Realty Income closed Monday at $45.82, yielding 5.0%. O's market price has been relatively strong durng this selloff. O is a premiere, well-diversified "triple net lease" REIT. O has raised the dividend annually since 1993. My target allocation for O is 5.0% of the portfolio. Credit rating: BBB+.

    AT&T (NYSE:T)

    AT&T closed Monday at $32.37, yielding 5.8%. There seems to be growing appreciation for T's deal with Direct TV. My target allocation for T is 5.0% of the portfolio. AT&T has raised the dividend annually since 1984. Credit rating: BBB+ (recently lowered due to taking on debt to buy Direct TV).

    PepsiCo (NYSE:PEP)

    PEP closed Monday at $91.83, yielding 3.1%. PEP is 5.9% of my portfolio, slightly less thatn the target allocation of 6.0%. PepsiCo has raised the dividend annually since 1972. Credit rating: A.

    Genuine Parts (NYSE:GPC)

    GPC has raised their dividend annually since 1956. GPC closed Monday at $81.19, yielding 3.1%. GPC is 4.9% of the portfolio, just under the 5.0% target allocation. Value Line credit rating: A+.

    National Retail Properties (NYSE:NNN)

    Real estate investment trust NNN closed Monday at $35.26, yielding 4.9%. NNN is 3.9% of the portfolio, a bit less than the 4.0% target allocation. NNN has raised the dividend annually since 1990. Credit rating: BBB+.

    HCP Inc (NYSE:HCP)

    HCP is a healthcare real estate investment trust. It has been out of favor because large tenant HCR ManorCare is in trouble with the federal government. HCP's market price has stabilized (relatively) in recent days in the midst of the broad selloff. HCP has raised the dividend annually since 1985. HCP closed Monday at $38.39, yielding 5.9%. HCP is currently 5.1% of the portfolio, slightly above the target allocation of 5.0%. Credit rating: BBB+.

    Wisconsin Energy (NYSE:WEC)

    In order to add some XOM (described above), I trimmed Wisconsin Energy from 5.0% to 3.0% of the portfolio when it was in the $51.50 range. Utility stocks had been declining after their strong appreciation earlier in 2015, but they seemed to have bottomed (as a group) and have moved up a bit--a classic defensive play in a scary market. WEC closed Monday at $48.77, yielding 3.8% Credit rating: A-.

    Hercules Technology Growth Capital (NYSE:HTGC)

    This business development company specializes in life sciences and other technologies. It is one of three internally managed business development companies (along with MAIN and Triangle Capital (NYSE:TCAP). Hercules has seen a number of its companies payoff their loans early and this has created some difficulty in covering the dividend through net investment income. Retained "spillover" funds from previous quarters that have enabled them to pay the dividend and they are on an aggressive program to grow the portfolio while maintaining quality. HTGC is 2.0% of the portfolio. HTGC closed Monday at $10.85, yielding 11.4%. Credit rating: BBB-.

    Starwood Properties Trust (NYSE:STWD)

    One of my old favorites, STWD is a real estate investment trust with a focus on commercial mortgages, many of which are in the New York City area. STWD closed Monday at $21.05, yielding 9.1%. The credit rating is BB (below investment grade). Currently, STWD is 4.2% of the portfolio. My goal is to eventually lower this percentage to 2.0% (due to the low credit rating).

    Pennant Park Floating Rate (NASDAQ:PFLT)

    PFLT is an externally managed business development company focusing on first lien debt at floating rates. PFLT is 2.2% of the portfolio, above the target allocation of 2.0%. PFLT closed Monday at $12.00, yielding 9.5%.

    Enviva Partners (NYSE:EVA)

    EVA is in the alternative energy industry, manufacturing wood pellets and wood chips, mostly for export to Europe. The company's initial public offering was in April. EVA is 2.0% of the portfolio. They recently declared their first dividend as a public company, $.4125 a quarter, for a yield of 12.2% at Monday's closing market price.

    Pattern Energy Group (NASDAQ:PEGI)

    During the Monday morning selloff, I liquidated my small stake in PEGI at $21.70 to provide funds for CCP and XOM. PEGI invests in alternative energy sources, primarily wind turbines. PEGI closed Monday at $21.64, yielding 6.7%.

    At the market close on Monday, there were 24 holdings in the portfolio and the portfolio yield was 5.4%.

    I offer this brief portfolio review as a journal of my retirement income portfolio. This is not a recommendation buy or sell any security. These investments work for me and I offer them to you as an idea for various stocks to study. Everyone's situation and risk tolerance is different. Please do your own due diligence.

    Tags: XOM
    Aug 24 10:48 PM | Link | 9 Comments
  • Kringle And Amazon Announce Partnership

    December 25, 2014, North Pole.

    At a blustery news conference, speaking on behalf of a tired Kris Kringle, Chief Elf John Bundler announced today that Mr. Kringle has entered into a long-term agreement with Amazon.com to assist in the worldwide delivery of certain Christmas items.

    Chief Logistics Elf Skye Router added that a key factor was Amazon's entry into drone development. "As the first mover in sky delivery, we recognize the complex technology involved in the accurate, on time delivery of packages on a worldwide scope. We welcome Amazon's entry into this sector because we have maxed out our reindeer platform and we have been looking for either a bolt-on acquisition or a strategic partner."

    An Amazon spokesperson said that the company would have an announcement to make at a later time, and deferred all inquiries to the Kringle operation, saying, "They are the pioneers. We wanted them to break the story. We are just honored to be part of their long history of satisfying customers. They have used us as an outsource for warehousing and seasonal overflow delivery, so this is a natural expansion of our partnership."

    Details of the expanded partnership are expected to be provided to the financial news media in the second quarter of 2015, with full implementation expected by November, 2015. A spokesperson for the Amalgamated Brother/Sisterhood of Reindeer said that the hoofed union was a full partner of the negotiations and was not threatened by the proposed inclusion of high-tech drone air delivery in their annual operations. "The rapid population growth of the planet, plus the renewal of steep-pitched roof architecture has made it difficult to find enough skilled reindeer for our delicate clandestine flight and landing operations. Amazon is a leader in fast, accurate delivery and we welcome them as part of our worldwide system."

    Tags: AMZN
    Dec 25 7:41 AM | Link | 7 Comments
  • Two CEFs Added, One Dropped

    Four closed end buy/write funds have comprised about 20% of my retirement portfolio with about a 5% allocation for each: ETV, JLA, NFJ and IGA. (Additionally, BUI comprises about 4% of the portfolio, but I count it in the utility sector.)

    Yesterday I closed the position in IGA (the ING Global Advantage & Premium Opportunity Fund) and opened a position in ETW (the Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund).

    This move was inspired by Douglas Albo's article, "Equity CEFs: Top Funds by Fund Family (Part I)," particularly his comparison of their discounts to net asset value. I also appreciate Eaton Vance's commitment to buy shares if the fund trades at a 10% discount to NAV.

    ETW now represents about 4% of the portfolio. I reduced the allocation of ETV, JLA and NFJ to 4% of the portfolio (down from 5%), and for diversification I added another Albo recommendation, the Nuveen Equity Premium & Growth Fund (JPG).

    So, excluding BUI, the CEF portion of the portfolio continues to be 20%. but it is now comprised of five funds with a 4% weighting for each.

    This morning, when Chambers Street Properties (NYSE:CSG) spiked down, I bought some more shares and it is now fully weighted in the portfolio. This weekend I will post an end-of-the-month portfolio update.

    Disclosure: I am long ETW, ETV, JLA, JPG, NFJ, BUI.

    Additional disclosure: CSG is not yet recognized by the SA system, but I am long CSG.

    May 30 2:53 PM | Link | Comment!
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  • "Our Roller-Coaster Market," Instablog portfolio review, with Monday's trading activity and purchase of $XOM: http://seekingalpha.com/p/2keog
    Aug 24, 2015
  • Why did $JNJ & $PG spike down so sharply this morning--far out of line with the rest of the market? If not a flash crash, a flash pot hole.
    Aug 24, 2015
  • Bedtime reading--Emerson Electric: Not a Utility, Not a Radio Company http://seekingalpha.com/a/1ymrv
    Jul 1, 2015
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