The stock market is outperforming and I want to give you a little view of it.
The Market View
I don't normally compare the Rose Portfolio to the market, but for quick reference it is important to note the yield.
The S&P 500 or (^SPX) was reported up 14% for Q1 with a yield of 1.7% on March 29th. Fastgraphs chart is shown below:
Yep, the market is up, but then the yield for it is down and quite low. The same goes for bonds, and T bills but that is another chart and not my purpose here.
From NBR this last Friday the following was shown and reported for Q1 2019:
Definitely much happier news than the December downturn of about 9% for that month alone.
I also enjoy the expressions of amazement from the Wall Street traders, such as P. Tuchmann shown below when he saw:
The Rose Portfolio value is up 12.6% for Q1 with dividend yield still hugging 4.7%. Not really, as he was looking at something else, but I enjoyed his expression.
Image from CNN Business December 31st 2018.
Who doesn't love up?
It took 3 months and then some for the last Q of 2018 and especially December to reverse….let us be very happy for it. However, caution is always warranted.
Photo art is from free Shutter-stock images.
Portfolio Dividend Income
The 4.7% income yield keeps me happy with it being up 20.18% for Q1 on average from 2018. February was down 13.48% as last reported and March as mentioned was up 32.9%.
Income for the Rose portfolio comes from:
-dividends of common stock and preferred debt
-distributions from RICs or regulated investment companies such as MLPs, and others.
-coupon or interest payments from bond funds or CEFs, closed end funds.
Important to note: option premiums are not included here as income; I let it gather as portfolio value for right or wrong. Thus, my income and dividend increase is pure and simple the dividend income.
I do use simple options and they appear in the Rose moves action area of the chart to follow and reveal any future action I may have taken.
Dividend income estimate is revised upward for 2019 by 23.3%; a raise from 2018 last estimate of 9.32% to now 11.49% more income in 2019.
The Rose Portfolio is real and consists of 10 sectors as discussed and shown in last month's article for February here when I had 92 equities.
#94 is from Clip-art free images/Can Stock Photo.
2 new buys give me 94, they are not common stock, and will be discussed in the March transaction section. Now, without delay, comes the alphabetical list as promised, get ready for a long list chock full of information.
Stock quotes, hi and lows are from the March 30th Google values on my sheets with abbreviations as follows:
Cost/sh = Rose accounting method of cost per share on average for all accounts.
Note: PM and MO now have a cost price as I stopped dripping and the company revealed it for the partial share sold for tax purposes.
19-Div-E = 2019 dividend amount per year as estimated by Rose from Nasdaq or "FG", Fastgraphs.
WTB Price = The price Rose would like to buy more or find it to be an attractive value
Rose moves = The yield I would like to buy, or the option I am currently using to buy or trim. You may find other comments, but they should be hopefully self explanatory.
Lh = Long hold as I want to keep on owning it if possible. Some of the calls are for trim purposes and what happens happens. They are most likely core equity positions in many cases and the plan was to trim.
Hold = wait and see what happens, buy more, sell, trim, it's on the bench for some reason.
Div Pd/Mar = Dividend paid in March, an * = a monthly payment.
Bold prices in the current price column mean probably close or at a buy point; same for 52 week low
Bold price in 52 week high means it's near or there again= overpriced perhaps
Div Yield is the yield for 3-30 price and an * after any yield means warning or caution as the yield is low, historically low, and the stock could be overpriced. It's a warning to watch and probably not buy it right now; or even trim or sell a call.
Bold ticker and dividend is for a fixed preferred equity, no dividend increase is expected.
Sector RE= real estate and Fin = financial
|Price||52 week||52 week||Div||3-30||Rose||WTB||Rose|
|A Data Proc||(ADP)||Tech||159.74||$111.23||$159.91||3.16||1.98% *||20||<140||Call @165|
|Alerian MLP Etf||(AMLP)||MLP Energy||10.03||$8.27||$11.41||0.78||7.78%||12.35||9||Long hold|
|Infracap MLP||(AMZA)||MLP Energy||5.96||$4.71||$8.18||0.96||.08 *||16.11%||9.2||hold||income|
|Ares Bond Fund||(ARDC)||CEF-Fin||14.84||$13.07||$16.73||1.29||0.108 *||8.69%||14.9||14.5||8.90%|
|B-Dickinson||(BDX)||Healthcare||249.73||$208.62||$265.87||3.08||0.77||1.23% *||158.8||120||Trim 255 +|
|Brookf Infr P||(BIP)||Utility||41.87||$32.26||$42.54||2.01||4.80%||39.24||39||Long hold|
|Cisco||(CSCO)||Tech||53.99||$40.19||$54.23||1.38||2.56% *||28.47||hold||Call @60 trim|
|D bond||(DCUD)||Utility||49||3.37||6.88%||47.48||hold||becomes D in Aug|
|Diageo/ UK||(DEO)||Cons-D||163.61||$131.43||$165.53||3.6||2.2% *||70.82||hold||Call @150 sell|
|Digital Realty||(DLR)||RE-Data||119||$100.05||$125.10||4.25||1.08||3.57% *||22.1||94||Call @125|
|DNP CEF Ute||(DNP)||CEF-utility||11.53||0.78||.065 *||6.76% *||10||10||Old lovely income|
|Enbridge /CAD||(ENB)||Energy||36.32||$28.82||$37.69||2.22||0.562||6.11%||36.41||33.5||becoming long|
|EPR||(EPR)||RE-nnn||76.9||$52.80||$77.66||4.49||.375 *||5.84%*||50.41||hold||Call @ 75|
|FS Investmt||(FSK)||Fin-BDC||6.05||$5.09||$8.24||0.78||12.89%||7.58||hold||Watch 4 imprvmt|
|Gen Mills||(GIS)||Cons-D||51.75||$36.42||$51.96||1.96||3.79%||53.14||hold||Trim 53/ long hold|
|Gen Parts||(GPC)||Cons-C||112.03||$85.80||$112.18||3.01||2.69%||65.11||91||Call @ 120 trim|
|Home Depot||(HD)||Cons-C||191.89||$158.09||$215.43||5.44||1.36||2.83%||141||175||Long hold|
|Intel||(INTC)||Tech||53.7||$42.36||$57.60||1.27||0.315||2.36% *||38.55||hold||Call @60 trim|
|Johnson & J||(JNJ)||Healthcare||139.79||$118.62||$148.99||3.78||0.9||2.70%||89.05||127||Long hold|
|Kraft Heinz||(KHC)||Cons -D||32.65||$31.53||$64.99||1.6||0.4||4.90%||na||hold||was a sell long ago|
|Kimco||(KIM)||RE-tail sc||18.5||$13.16||$18.64||1.12||6.05%||19.01||hold||Call @17.50 trim|
|Coca-Cola||(KO)||Cons-D||46.86||$41.45||$50.84||1.6||3.41%||31.98||42||Call @49 trim/LH|
|Kite Realty||(KRG)||RE-tail nnn||15.99||$13.66||$17.75||1.3||0.3175||8.13%||15.57||14.75||8.81%|
|Alliant||(LNT)||Utility||47.13||$38.22||$47.91||1.42||3.01% *||21.88||35.5||Call @45 trim|
|Matercard||(MA)||Financial||235.45||$167.94||$237.08||1.32||0.56% *||82.98||hold||Call @250trim|
|McDonalds||(MCD)||Cons-C||189.9||$153.13||$190.88||4.64||1.16||2.44% *||78.71||hold||Call @200 trim|
|Madison G&E||(MGEE)||Utility||67.97||$54.70||$68.95||1.35||0.3375||1.99% *||hold||Amazing hi price|
|NGL-pb||(NGL-b)||Energy-pref||24.02||$19.53||$24.95||2.25||9.37%||24.11||23||Hold 4 price|
|New Res||(NRZ)||Fin-mREIT||16.91||$13.86||$18.75||2||11.83%||14.76||15||Hold 4 now|
|NY Mort Tr||(NYMTN)||Fin-pref||23.67||$20.70||$24.50||2||8.45%||22.46||22.5||might add more|
|Pfizer||(PFE)||Healthcare||42.47||$34.37||$46.47||1.44||0.36||3.39%||33.02||38||Call @47 trim/LH|
|Pennant Pk Flt||(PFLT)||Fin-BDC||12.81||$11.05||$14.12||1.14||.095 *||8.90%||12.25||12.5||hold income|
|Philip Morris||(PM)||Cons-D||88.39||$64.67||$103.55||4.71||5.33%||53.32||hold||have enough|
|Penny Mac||(PMT-b)||Fin-pref||25.24||$22.52||$25.38||2||0.5||7.92%||24.82||24.5||want below par|
|Brkfield RA||(RA)||Fin-CEF||21.62||$17.95||$23.55||2.39||.199 *||11.05%||23.18||21.4||hold income|
|RD Shell-B||(RDS-B)||Energy||63.95||$56.26||$76.99||3.76||0.94||5.88%||54.17||58||Long hold|
|JM Smucker||(SJM)||Cons-D||116.5||$91.32||$126.86||3.4||0.85||2.92%||109.12||100||Call @120 trim|
|Southern Co||(SO)||Utility||51.68||$42.42||$52.65||2.46||0.6||4.76%||39.38||44||Call @50 trim/LH|
|Simon Prop||(SPG)||RE-Retail||182.21||$145.78||$191.49||8.32||4.57%||163.64||165||Call @195/trim|
|STAG||(STAG)||RE-Industrl||29.65||$23.21||$29.81||1.45||0.1192*||4.89% *||17.38||24||Call @30/trim|
|Teekay||(TGP-pb)||Energy-pref||24.25||$20.27||$24.71||2.125||8.76%||23.61||23||no K-1 LH|
|Target||(TGT)||Cons-D||80.26||$60.15||$90.39||2.65||0.64||3.30%||62.98||67||Call @82/90 trim/Lh|
|Union Pac||(UNP)||Industrial||167.2||$126.37||$172.44||3.52||0.88||2.11%||88.36||140||Long hold|
|Visa||(V)||Financial||156.19||$116.71||$156.82||1||0.25||0.64% *||65.16||125||Call @160/ Lh|
|Vodafone||(VOD)||Comm-tele||18.18||$17.05||$30.20||1.74||9.57%||17.95||17.4||Put @19/20= <17net|
|Ventas||(VTR)||RE-Hcare||63.81||$46.55||$65.70||3.17||4.97% *||57.33||56||Call @65/trim|
|Verizon||(VZ)||Comm-tele||59.13||$46.09||$61.58||2.44||4.13%||45.22||48||Call @60/65 trim/Lh|
|Wec Energy||(WEC)||Energy||79.08||$58.48||$80.05||2.36||0.59||2.98% *||45.39||62||Call @ 75/trim|
|WP Carey||(WPC)||RE-nnn-Intrl||78.33||$60.84||$79.08||4.15||5.3% *||64.24||65||Call @75/80/trim/Lh|
|Wash Prime||(WPG.ph)||RE-prf||22.07||$12.59||$23.96||1.88||8.52%||18.06||18||Trim 24+|
|Xcel||(XEL)||Utility||56.21||$41.99||$57.51||1.6||2.85% *||drip unk||42||Long hold/ stop drip|
Portfolio Value and Options
Portfolio value, "PV", sits at an all-time high, even more than last year when the market was at an all-time high. A full 4.4% higher in value from the highest in 2018. Up 12.59% for Q1 from the December low. I attribute the extra value to dividends, but I am sure much of it could be from options too. I haven't begun to determine that amount and should, but know it is a very helpful and welcome addition to portfolio value, and therefore it needs to be mentioned. As I admit to not being an accountant, I have no desire to figure it out. I don't do anything tricky, it is simple easy options for me and I don't lose money, ever, from at least what was the intended goal.
I only do the following very simple and easy types of options:
-covered calls on owned shares (they are frozen with the option, are still owned and dividends collected).
-cash secured puts using cash in the account (cash is frozen until option expiration).
A premium is collected when doing the option and is never taken away, it is to keep. I had one option called early in March for WPC of which I owned plenty and still do, so the goal was to trim, which I accomplished. The details may be found below in March Transactions.
|Add on Buy||Stock||Ticker||Price/sh|
|Lockheed M||LMT||297.33||not many|
|New BUYs||GEO Group||GEO||18.4|
|B Dicksn||BDX||253.56||149||104.56 T|
|JM Smucker||SJM||112.19||112.04||0.15 T|
|Gen Mills||GIS||48.99||51.17||-2.18 T|
In the list above a T at the end of the net/sh means it was done in a taxable account.
With getting some WP Carey (WPC), a large position, called early for my low $65 strike right before the ex-date was no surprise. Actually, I was wondering what took so long. I was then looking to replace that income with a like type investment. The Fortune Teller, TFT, was asked in the chat room of The Wheel of Fortune on that very day, March 28th, if he had some suggestions.
The above logo is obtained free from The Wheel of Fortune service.
Many others also had WPC called early at various strike prices, but the fact remained we all were seeking income replacement. Suggestions were offered from the MR, monthly review by TFT, with GEO Group popping out to me. I had previously passed on it, and now was off to take a look at the price. I did hesitate with the BB- credit rating, but I put my trust in TFT as he sure knows great value, and I bought it that day for a low low price of $18.40. The $1.96 dividend gives it a 10.65% yield, nice historic high yield, and I am thankful for the suggestion.
2, 3, and 4- HSY, SJM, and GIS
The other trims were mostly just that, as the position was at or near cost for these and I had plenty to trim. I bought admittedly all of those at higher prices and had been averaging down for almost a year if not more. Now was the time to average out a bit and use the cash elsewhere. I still like them all and the plan is to hold the remainder long term.
Becton Dickinson is a medical devices healthcare company that is primarily overpriced and offers low yield of 1.2% at $250. I bought it years ago on the cheap and now is the time to keep trimming. I did not like the last low 2.7% dividend raise for a growth stock and will probably sell the remainder this year if it gets back up to 260 again. I am more about income now and it is just not what I want in that regard. It is a quality stock that can he held until I get the price I want.
The PV for both V and MA shows it is doing great. I actually remain extremely pleased with it in all regards of dividend growth and price. It is just getting too big for my financial section and does not provide much income. A trim was in order and I did sell some calls, please see the list. It the price gets to the strike, that's okay too.
EPR is an entertainment miscellaneous eREIT and is getting up in value from my purchase price and lower in yield @ 5.78%. It probably still has room to go higher, but this actually was a pair trade suggested at The Wheel of Fortune. The idea is or was to sell equal value amounts of EPR and buy IRM which I did. I hope I executed this in the right manner, but remain happy with owning more IRM and its higher income. IRM was undervalued a bit at the time and yielded more @ 7.2%. However, it does have a lower credit rating.
Definitely only a trim of ~ 10% with a quick gain of ~41% on those shares. It is not over valued or priced and still has a quality yield for a tech stock. I want to keep it for the dividend yield of 3.5% for now and even more so for the nice growth it may provide. The yield is what I will watch from now on.
This was a hot tip from TFT when it was over sold down to under $200, another thank you to The WoF.
Add Ons (9)
1 and 2- Preferred shares NYMTN and TGP-b
These are just plain undervalued with par at $25. I admit to buying TGP-b before the ex-date to get the payment, at still a decent > 8% yield and does not have a K-1 tax form.
Vodafone was discussed in the last article. I just added some more for now at the 10% yield mark. It is a UK telecom.
I Added at ~6% yield and continue to build the position. Now I will watch for a better price and average down if possible. The current yield is more than respectable for an energy MLP with no K-1 tax form. It is Canadian and exchange rates may differ the dividend amounts.
5 and 6-CVS and CAH
Healthcare is getting slammed in price and these quality companies are now extremely over sold and unloved. I averaged down somewhat reluctantly, but see the long term value. I bought them years ago for too much and admit to it. They should also provide quality dividends in the years to come.
Lockheed Martin is just plain a quality defensive stock yielding 3% and 5yr DGR of 11%. I say no more. I wish to get it cheaper all the time, but was just rounding up my shares and bought a few to do so.
Valero is a refiner in energy. I has a 30% 5yr DGR and 4.2% yield. I added a few shares here and sold a put to get more at $75 strike and 4.8% yield. It had been extremely overvalued in the $100+ area and I did sell some. I have waited for it to come back down in price. I do anticipate it regaining its price in a few years if forecast earnings by analysts are true. This year earnings are rather flat and a good time to add.
GEO Group from Boca Raton, FL, is an eREIT in the corrections business and operates globally mostly in the USA, Australia, South Africa and the UK. It is extremely unloved and underpriced as yet. Other contributors on SA have recommended it at $20+ level and around 9% yield. Analysts at Yahoo Finance have a $23.50+ price target, with the low being $22.
I see lots of value here and just got minimum 0.3% PV allotment immediately, which is a strong buy for the portfolio. It still is one of 12 other eREITs I own and I try to keep them all together under 10% of PV. WPC and VTR were the largest positions and will most likely continue to be trimmed using option calls.
Ares Dynamic Income Fund is a closed end mutual fund for mostly European HY bonds and pays monthly. The yield currently is ~8.6%. I do not expect a dividend raise and I generally hope to see the price to be rather low beta. It also is an idea suggested at The Wheel of Fortune service and from the monthly review.
Photo obtained from "D-Fence Cutouts" free imagery.
Defense in the Portfolio
I continue to keep the defensive sectors, cash and cash equivalents in put options and fixed income to above 50% in PV and Income. That is shown in the chart below. Previous articles reveal I have ~ 75% in common stock and the remainder in RICs and Fixed Income, Cash and cash equivalents.
I now also like to include my dividend paying tech stocks as possible defense as well and show them to be included at the end of the chart below.
Number of stocks in the sector is shown in the first column.
|8 FIXED||Fixed Pref||5.69%||10.67%|
Note it is hard to get high income out of tech and getting AVGO is really quite exciting for me. Consumer cyclical also is the same way for income and the financial sector seems that way too. I just prefer not to own banks and have great other financial holdings in the RICs, where higher yield is common.
31% of the income comes from eREITs and miscellaneous RICs where again the financial types reside. 11% income comes from fixed preferred debt which is new for my investing over the years. That pretty much sums up my defensive goals and giving the portfolio a nice HY diversification.
I owe a huge debt of gratitude to SA and making available so many contributors that specialize in writing about RIC type investing. It is where I found The Fortune Teller and his exceedingly great understanding of the equity markets. There are others and many of them have also started services, but continue to write great quality articles on the free side, which is needed and enjoyed by many and especially myself. Investing is personal and it must suit your own needs and plan. I continue to wish you all: Happy Investing!
Photo was obtained free from Labyrinth Gal: April 2010
All lists and charts are obtained from the author's own files.
Disclosure: I am/we are long GEO. 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 94 stocks in the lists