The Rose portfolio
The Rose Portfolio consists of 2 Roths, a taxable trust account and 9 separate company stocks outside of the broker. It now sits at 92 Investments and on average ~4.6% dividend yield on value. I hope to do a quarterly report at the end of June for portfolio value and dividends.
Composition of holdings and dripping and a bit about Rose
I could add cash to the taxable but rarely do that as we are retired and currently living off a pension and social security. We have no loans and older vehicles and remain happy living a simple life here in Iowa. I do still drip 5 of the separately held companies and have owned those the longest. The dividend income is currently being reinvested at the broker in all accounts, but no options are done in the trust. I will trim a position if I don't want to risk a full 100 shares, which is the minimum for any option, and holds true for buying. Some of the stocks in the taxable are not in the Roth and vice-versa. I keep all the Regulated Investment Companies or RICs in the Roth accounts. BUD is in the taxable to allow recovery of the foreign Belgium tax. I just discovered my broker takes an ADR fee that is not recoverable, it is not much, but is still annoying to me. This ADR fee is something to consider with foreign holdings that do not have a tax treaty with the US. My hubby has an IRA not included here. Here is a link to the most recent article I have written about the IRA. Know we will need to take Required Minimum Distributions or "RMD" at his age of 70.5 which occurs in 2019. It is the smallest of our accounts and we will just do the distribution taxable requirements as time goes on, and I hope to write about it as it happens.
I have included in the chart the buy and sell prices along with the cost for those sold and all were done sometime in May. The IRA transactions are separately found at the bottom of the chart.
BUYS= 22 + 2 for the IRA
BCE, a Canadian telecom was new and I am currently building this position. It was bought 4 separate times as shown in the chart, no dates included for any buys.
Ventas was an option I had assigned for $52.50 strike and $17 in closing fees = 5267 for 100 shares.
The shares were actually selling for $52.05 when exercised, but it is selling higher now. My premium probably makes me even with the closing price that day. It wasn't a brilliant move but has turned out fine. I find the only way to learn options is by doing them and I am pleased to own Ventas.
The preferred debt of CBL, NGL and TGP were purchases to replace income lost and also give safer alternatives to owing the actual common stock of those particular entities. They have nice fixed to floating rate yields of 10, 9 and 8 % and the ideas came from The Wheel of Fortune service on SA.
APLE a hotel equity REIT with a flat dividend of $1.20 and yield of ~ 6.4% that pays monthly.
It was sold near or above my cost and it seems to remain at or near that value most often.
I want something more than this bond like holding and have found the previously mentioned preferred debt issues.
OXLC is a CEF or closed end fund. They are best to buy below NAV or Net Asset Value or some say look for a discount on the price. I owned it in my husband's IRA as well at the Rose Portfolio and bought at different times. It was selling at premium level when I sold and had not owned it very long.
I will consider buying it again if it dips to the low level I purchased my shares at on the advice from The Wheel of Fortune subscription service. I love making money and I enjoy the suggestions of The Fortune Teller that seem to work very well.
GAIN also was sold for getting a low yield of under 7% without the special dividend. I purchased it with >9% yield. I had held it for almost 2 years when The Fortune Teller introduced it as a member of the "A-Team", so time to move on as the upside for it is probably close. I have numerous other ideas to grow the capital and get a better yield, again as mentioned above.
FSIC was a new holding and I got scared out of it on my own. It was a small position and felt the need to move out of it as it was a speculation for me. Perhaps a mistake in the long run and I am not telling anyone else to sell it. I got a few nice dividends and broke even or up a bit on cost and have moved on.
SBUX is one company that has been going sideways in price for numerous few years now. I had been selling call options on it for some time trying to sell out of it. Some would be assigned away and this last time it did not, so I sold out purely on my own, netting ~ $10 per share. I no longer need a growth stock, as I prefer income stocks now, and personally do not see this one coming back to my portfolio.
Trim of DEO
I like Diageo quite a bit and think my shares have outperformed and therefore trimmed a few off. I do see it heading to even more success, but like to live a bit dangerously and have sold a call for $150 strike that ends July 20th. You can watch it with me and see if it gets there and it might. I received $1.14 premium for this and therefore will get ~$151 if that price hits. Know I have many shares left and can play a bit here with the price as my average cost now is $101. So I see 50% gain in about a year on the price. Rose is smiling, but I also know anything can happen and usually does.
Uniti is a speculation and has a terrific dividend of $2.40 with a yield of ~ $11%. I sold most of it out of the IRA and then sold options on the remaining shares in both accounts. The call strike is $20 for Jan 2019. I received ~ $1.05 premium to do so when the shares were at $18.56.
They are now around $22.00. I am betting the price goes back down and if not I still have profit on a speculation. The bet comes from the fact too much revenue for UNIT comes from WIN which actually seems to be a loser. My cost on the shares is around $15.60 and 15.90 in the accounts and I will move on and watch from the sidelines.
My Future Purchase Plan and The Spread sheets
I love to make spread sheets especially since I learned how to use excel and have access to a free Google sheets account. I check them often to determine the best holdings or way to determine which shares I should add on to. I also have a want to buy "WTB" sheet created and given to me by a helpful fan a few years ago Vince McG., and I thank him often, but he doesn't know that. I hope he is still around and alive and well and gets this message of appreciation. I also should thank others for pushing me to learn excel and helping me do it.
What kind of spread sheets you ask? I developed this most recent one to show me hopefully what to buy next. Just know it did not end up to be what I eventually used. It, however, was instructional and had great value leading me to a more helpful spread sheet.
The first spread sheet is shown below where I wanted to determine investment quality and dividend safety. Like I said it was valuable as it showed me the quality of my holdings. All the May activity presented above has been included in the following spread sheet evaluation.
First the abbreviations I used for the columns:
Curr p/sh = Current price /share as on June 8, 2018.
Div 18= yearly dividend and in some cases the forward estimate for 2018. Most of the facts come from Fast Graphs, "FG" a subscriber website. I also use Nasdaq in some cases and just know the dividends shown are not set in stone.
Est Y18 = the estimated dividend yield for shown dividend shown and current price/share
S&P CR = S&P Credit rating taken from Fast Graphs
VL = Value Line safety score which is a 1 for the best safety and 5 for the worst. I own only 1, 2 and very few 3 rated and none 4 or 5.
Fin = the Value Line Financial score with A++ being the best.
The Value line premium statistics I obtain free from a library source.
x-div yrs = dividend years of continuous payment from the CCC list by David Fish from his old website here.
The sheet list is sorted using this last column from the longest dividend streak to the shortest and with those having no sequential upward dividend payment history of note appearing at the top.
The RICs or Regulated Investment Companies appear first for that reason and I use the following for them in that last column.
P/pref = preferred
m-R = mortgage REIT
REIT = Real Estate Investment Trust
F = Frozen or no raises for some time
ETF= Exchange Traded Fund
e-reit = equity reit
CEF= Closed End Fund
bond = baby bond
BDC = Business Development Company
ADR = foreign investment that pays 2x each year and are not listed on the CCC list as exchange rates make it too difficult.
|TICKER||curr p/sh||Div 18||est Y18||S&P CR||VL||Fin||x-div yrs|
S&P credit ratings that changed from my last list are as follows:
KHC from BBB- to BBB.
BDX, CVS and GIS from BBB+ to BBB
KO from AA- to A+
SBUX to A-
UNIT from B to B-
Unit is definitely a speculation for me.
I really enjoyed making this one and it showed the quality of my non RIC holdings and generally dividend safety. They are the defensive holdings which are core and I have owned for perhaps the longest in the portfolio, so no real news there at least to me.
I stared at this long and hard and it did not help me decide which ones would be the best ones to add on to. I moved on to ordering the portfolio by % Portfolio Income Highest to lowest, current dividend yield, % portfolio value (not cost), along with the S&P Credit rating.
This is spread sheet #2 and provides more insight into the portfolio real needs and even eye opening top income leaders.
|%PV||18-Div F||S&P CR||%P Inc||18-Div F||Curr D Y||CR||Y||L#|
I need to describe how I got to the last 3 columns in the chart above.
On the spread sheet above I did the following:
CR column is for S&P credit rating.
Capital Y is given for an A or better type rating
Lower case y was given for BBB+ credit rating
Y column is for Dividend Yield
I picked dividend yield as it can mean many things and generally is a value key for me. Yield goes up as price goes down. As yield gets too low, it can mean overvaluation as well and or it is a growth stock.
Capital Y is given for 3% or greater dividend yield.
Lower case y is given for 2.5% or more
L# in the last column means:
1 is for 2Ys =the best rating for credit rating and dividend yield of +>3%.
2 is for 1 capital Y and 1 lower case y =BBB+ credit rating and >=2.5% dividend yield.
Since I made the charts Scana has suspended its dividend so it has been disqualified.
I also feel this was not truly fair to Low Yield growth stocks or the RICs, but those that are really quality have a way of showing up, but I will learn if that is true or not.
There were a total of 41 finalists
First I would like show my portfolio by sector allocation and then add more information to the finalists before presenting the final 16 winners.
Sector Allocation and my Needs
41 is still way to many to buy so I added another level of inspection and this is purely by sector and personal needs and desires for the portfolio.
Below is a quick current summation of my holdings of 92 by portfolio sector and by % Portfolio Value "%PV" and % Portfolio Income " % P-Income".
Consumer Staples and some others will rise back up on value eventually as the sector improves, so I am in no hurry to add to it or some others for now. The income part is now where I will be generally looking.
I see a need for more tech, healthcare, consumer discretionary and not much more finance, real estate REIT or energy.
The 41 Finalists by #1 or #2 level
You might need some of these so I revealing all of the 41 that qualified.
I reveal my yield preference and WTB price and opinion about sector need.
"FTRY" meaning For The Right Yield as stated and my price or "WTB" Want To Buy price for that designated yield.
|L #1 = 2Ys|
|25||%PV||%P Income||Curr D Y||Sector||Need it?||WTB|
|ABBV||2.67%||A -||2.19%||3.82%||Healthcare||FTRY 4%||96|
|KMB||2.54%||A||2.07%||3.87%||Cons Staples||FTRY 4%||<100|
|CSCO||1.50%||AA-||0.96%||3.04%||Technology||FTRY 3.3 %||40|
|SPG||0.81%||A||0.83%||4.78%||Real Estate||FTRY 5.5 %||144|
|GPC||1.31%||A+||0.82%||3.04%||Cons Disc||FTRY 3.3 %||87|
|PEP||0.95%||A||0.65%||3.62%||Cons Staples||FTRY 3.8%||97.63|
|TGT||0.92%||A||0.65%||3.28%||Cons Staples||FTRY 4%||64|
|CVX||0.75%||AA-||0.57%||3.54%||Energy||FTRY 4 %||112|
|HSY||0.90%||A||0.52%||3.01%||Cons Staples||FTRY 3 %||91.33|
|T||2.73%||BBB+||3.46%||5.91%||Tele-com||FTRY 6.5 %||30.75|
|VTR||1.73%||BBB+||1.87%||5.76%||Real Estate||FTRY 6+%||50|
|DEO||1.73%||A-||0.97%||2.53%||Cons Staples||FTRY 3%||116|
|CL||0.37%||AA-||0.21%||2.65%||Cons Staples||FTRY 3%||56|
and finally the 41 finalists are now 16 winners.
I did add on some more evaluation parameters including P/E or Price/Earnings, from FG, and Morning Star "M*" Fair Value and Value Line "VL" estimates PT or price target for 3- 5 years out for price. This might be more confusing, but I did find it interesting.
I put in bold a P/E and company ticker I thought attractive currently. I am not saying I am buying them, just that they are attractive and I still have my own WTB prices and desires to own them.
|Finalist 16||M*||M*||VL Frwd|
|%P Income||Curr D Y||Need it?||WTB||P/E 10yr||P/E 5yr||Curr P/E||Frw P/E||FV||PT 3-5|
|HSY||0.52%||3.01%||FTRY 3 %||91.33||21.7||23.9||18.3||17.2||116||120-160|
Yep - I am done analyzing.
The dividend yield helps me look for a good value along with quality credit rating and how little a position I might hold in the portfolio for income.
I should be buying those 16 winners.
What really stood out to me again is how a little can go a long way with RICs.
AMZA is under 0.9% of portfolio value yet provides the highest % of income, the highest I repeat, at 4.2%. To be noted is AMZA did cut the dividend in January and become a monthly payer. It paid 0.52 in January 2018 for the past quarterly dividend from 2017 and then went to currently 11c per month. That gives it $1.73 for 2018 and the forward dividend would be $1.32 for 2019. So it will drop down to perhaps 8th place next year. For a speculative position this is just to high a spot for it to reside, but what is done right now is done and I will not add any more. Unfortunately I did add some in May averaging down in my price. No more AMZA.
I am thankful for the learning and wonderful help for part of my portfolio to The Fortune Teller and his co-moderator Trapping Value at the subscriber service The Wheel of Fortune. By the way, the service also has a buy on CMI. They do more than just speculate in RICs.
Finally, these evaluations give me appreciation for all that I do own. I also enjoy your comments. Happy Investing and in life.
Disclosure: I am/we are long ABBV.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: and 92 investments mentioned in the article