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Dividend Sleuth
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64-year-old individual investor currently engaged in a second career and focused on dividends in a Retirement Income Portfolio. Member of the National Association of Investment Clubs (NAIC) since 1982, which now operates as BetterInvesting.org. NAIC's historic "four principles" have... More
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  • 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!
  • Consuelo Mack Interview With Bill Priest

    It's appropriate that the markets are silent on this Memorial Day of remembrance.

    This week's WealthTrack interview by Consuelo Mack is with Bill Priest and Tim Hartch, "Award Winning Managers, Contrasting Strategies."

    Dividend investors may be particularly interested in Priest's comments about how stocks are chosen for his MainStay Epoch Global Equity Yield Fund.

    Priest says every company has five options for how to deploy its free cash flow:

    1. Pay dividends

    2. Buy back stock

    3. Pay down debt

    4. Invest in the business

    5. Buy other companies.

    His goal is to build a fund with a 9% return, comprised of 4.5% in dividends, 1.5% in either buybacks or debt reduction, and 3% growth.

    I always enjoy looking at the portfolios of funds that have great track records. Priest's Global Equity fund seeks to have 100-105 stocks with a low beta (.75). Here are the top ten equity sectors in the fund's holdings (as of March 28, 2013):

    Diverse Telecommunication Services 11.30%

    Pharmaceuticals 10.88%

    Tobacco 7.74%

    Electric Utilities 7.09%

    Multi-Utilities 6.90%

    Media 4.95%

    Oil, Gas & Consumable Fuels 4.22%

    Insurance 3.98%

    Aerospace & Defense 3.87%

    Wireless Telecommunication Services 3.33%.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    May 27 12:26 PM | Link | 2 Comments
  • Chambers Street Properties Added To Portfolio

    A real estate investment trust, Chambers Street Properties (NYSE:CSG) has been added to the Retirement Income Portfolio. An initial purchase (representing about 1% of the portfolio) was made on the stock's first day of trading on the New York Stock Exchange.

    Chambers Street was formed in 2004 as the CB Richard Ellis Trust. The President and CEO is the founder, Jack Cuneo. The company's website (www.chambersstreet.com/) indicates that it owns 129 properties in 22 states, the UK and Germany.

    The company has more than $3 billion in assets, with over 98% of its 34 million square feet leased by 272 tenants in more than 25 industries.

    The company began trading on the NYSE on Tuesday, May 21 at $10.00. Unlike most initial public offerings, where the company sells new shares or the original investors sell their shares via the IPO, CSG's listing coincided with a tender offer from CSG to purchase up to $125 million of its common shares between $10.10 and $10.60 per share. It's likely that the company's participation in the market on the "buy" side helped provide a floor for the stock, which traded in a close range on the first two days of trading, closing at $10.00 (unchanged) on May 21 and $9.99 on May 22.

    I learned about Chambers Street from Brad Thomas' May 3 2013 Seeking Alpha article, "Chambers Street: More Liquidity Magic On the Way in REIT-Dom" (seekingalpha.com/article/1397961-chamber...).

    Brad also contributed a May 8 2013 article to TheStreet, "For a Hot New REIT, Go to Chambers Street," (www.thestreet.com/story/11918148/1/for-a...), which includes a video interview of CEO Jack Cuneo. The company's portfolio is 25% office and 25% industrial. Its largest tenant is Amazon (6.6%). About 56% of the rent base is from property leased to investment grade rated tenants. About 82% of the square footage is leased to single tenants on a triple-net basis.

    Total assets at March 31 2013 were $2,866,877,000. Total liabilities were $1,181,915,000. There were 248,400,000 common shares outstanding. Chambers Street will pay a 12.5 cent quarterly dividend, or 50 cents annually, for a 5% yield at the initial pubic price of $10.00.

    This is not a recommendation to buy CSG, but this is presented as a suggestion for a stock to study.

    Since my last report, I have continued to raise cash, which now accounts for 18% of the portfolio.

    Tags: REIT
    May 22 10:47 PM | Link | 2 Comments
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