My 20/20 Vision For The Year 2020 - Update #4

Summary

• This article will update through the five months the portfolio has been in existence.
• The update will reveal there have been few stocks not impacted by recent pandemic events occurring on a worldwide basis.
• I will discuss each stock in the portfolio with comments outlining my current thinking.

Warren Buffett recently admitted he had lost $50 billion during the pandemic. If Buffett can be so open about how the stock market has treated him as of late, it is time for me to man up and look at my portfolio. Back in November, I had decided the market was overextended and due a major correction. Based on this belief, I opted to move most of my portfolio into stocks yielding dividends, where the individual companies had long track records of paying and sustaining their dividends. It was then that I decided to create a model portfolio of my stocks and share the results here on SA. I have previously issued three SA reports, ending with the February update. Knowing that March was when the market really began its correction, I opted not to watch it daily. Elm Street is out there, but I did not need to see the carnage Freddie Krueger was bringing to this street, or maybe Wall Street.

With this article, I am skipping the long-ago March report, however, the March results and dividends have been included in the April results just ended. As one can see, the DJIA, my comparator model, has taken massive declines and yet has recently bounced off the 18,000 level seen in March. Will the rebound continue in the DJIA? Will these industrial stocks, not necessarily paying dividends, be the leaders in the market? With such companies paying sizeable dividends and thus being more mundane in market activity, can they catch up with the DJIA results?

I do not have a clue for the near-term future. However, if my dividend-paying stocks continue to accumulate cash at the same rate, I will be pleased with the valuation of my portfolio.

The DJIA hit the 18,000 level in March. Anything in the future having a negative impact causing the market and the DJIA to retrace to this level - we are in trouble with a capital T.

Interim Movement in the DJIA:
	DJIA	% +/-
11/29/2019	28,051
12/31/2019	28,538	1.70%
1/31/2020	28,256	0.73%
2/29/2020	25,409	-9.41%
3/31/2020	21,917	--21.8%
4/31/2020	24,345	-13.2%

Click to enlarge

The following is the update for my portfolio through April. The DJIA is reflecting a current decline of 13.2%. My dividend portfolio includes the balance of my initial cash investment, and the cumulative dividend is reflecting a decline of 14.4%. There are three stocks in my portfolio showing a net gain from the initial investment.

One only needs to look at Exxon (XOM) to see what has happened to many common shares in this current financial crisis. Can it return to the levels that had only a few months ago? The current rebound has been impressive, but the hole they find themselves is very deep.

The best personal example I can give for Exxon is the fact I live in Texas. Texans drive their automobiles everywhere. I drive an Avalon Hybrid. My wife and I have been in a self-imposed lockdown in our home for going on 8 weeks. It has been since March 12^th that I have filled my gas tank, and my fuel gauge still shows I have over half my tank of fuel. Apply my situation and decisions to a national market - can the Exxons and other petroleum producers recover to historical levels? Here in Texas, the daily cases of newly confirmed coronavirus patients are growing by over a thousand cases a day. By mid-May, our lockdown restrictions will be totally removed. What does June have waiting to deliver to us?

Dividend Tracking Chart Based on $10,000.00 Invested in Each Stock:(11/29/19)
		Price	Valuation	Shares	Dividend	$Value	Net Value
BBDC	11/29/2019	$10.41		961			$10,000.00
	12/31/2019	$10.28	$9,879.00		$0.15	$144.15	$10,023.00
	1/31/2020	$10.30	$9,898.00				$10,042.00
	2/29/2020	$9.44	$9,071				$9,215.00
	3/31/2020
	4/30/2020	$6.76	$6,496		$0.16	$154.00	$6,794.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$298.00
BKCC	11/29/2019	$4.95		2020			$10,000.00
	12/31/2019	$4.97	$10,039.00				$10,039.00
	1/31/2020	$4.98	$10,059.00		$0.14	$282.80	$10,341.00
	2/29/2020	$4.50	$9,090.00				$9,372.00
	3/31/2020
	4/30/2020	$2.94	$5.938.00		$0.14	$282.00	$6,502.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$564.00
BKEPP	11/29/2019	$5.18		1930			$10,000.00
	12/31/2019	$5.39	$10,402.00				$10,402.00
	1/31/2020	$5.40	$10,422.00				$10,422.00
	2/29/2020	$5.09	$9,824.00		$0.18	$345.00	$10,168.00
	3/31/2020
	4/30/2020	$5.31	$10,348				$10,593.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$345.00
BKT	11/29/2019	$6.02		1661			$10,000.00
	12/31/2019	$6.05	$10,049.00		$0.03	$56.47	$10,105.00
	1/31/2020	$6.09	$10,115.00		$0.03	$56.47	$10,227.00
	2/29/2020	$6.01	$9,982.00		$0.03	$56.47	$10,150.00
	3/31/2020				$0.03	$56.47
	4/30/2020	$6.03	$10,015.00		$0.03	$56.47	$10,295.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$280.00
BDJ	11/29/2019	$9.61		1041			$10,000.00
	12/31/2019	$9.92	$10,326.00		*$0.221	$230.00	$10,556.00
	1/31/2020	$9.40	$9,785.00		$0.05	$52.05	$10,067.00
	2/29/2020	$8.25	$8,598.00		$0.05	$52.05	$8,932.00
	3/31/2020				$0.05	$52.05
	4/30/2020	$7.23	$7,526.00			$52.05	$7,964.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$438.00
DODIX	11/29/2019	$14.17		710			$10,000.00
	12/31/2019	$14.03	$9,961.00		*$0.182	$129.22	$10,090.00
	1/31/2020	$14.25	$10,117.00				$10,246.00
	2/29/2020	$14.37	$10,202.00				$10,331.00
	3/31/2020
	4/30/2020	$14.21	$10,089.00		$0.14	$99.00	$10,317.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$228.00
HASI	11/29/2019	$29.36		341			$10,000.00
	12/31/2020	$32.18	$10,977.00				$10,973.00
	1/31/2020	$34.09	$11,624.00		$0.34	$114.23	$11,087.00
	2/29/2020	$33.95	$11,576.00				$11,691.00
	3/31/2020
	4/30/2020	$27.99	$9,544.00		$.0.34	$116.00	$9,777.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$233.00
HRZN	11/29/2019	$12.49		801			$10,000.00
	12/31/2019	$12.93	$10,356.00		$0.10	$80.10	$10,436.00
	1/31/2020	$12.72	$10,188.00		$0.10	$80.10	$10,348.00
	2/29/2020	$10.84	$8,682.00		$0.10	$80.10	$8,922.00
	3/31/2020				$0.15	$120.00
	4/30/2020	$9.61	$7,696.00		$0.10	$80.10	$8,136.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$440.00
PTY	11/29/2019	$18.55		539			$10,000.00
	12/31/2020	$19.00	$10,241.00		*$0.16	$86.24	$10,327.00
	1/31/2020	$19.57	$10,548.00		$0.13	$70.07	$10,704.00
	2/29/2020	$16.42	$8,850.00		$0.13	$70.00	$9,076.00
	3/31/2020				$0.13	$70.00
	4/30/2020	$14.19	$7,697.00		$0.13	$70.00	$8,061.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$366.00
XOM	11/29/2019	$68.13		147			$10,000.00
	12/31/2020	$69.78	$10,257.00		$0.87	$127.89	$10,384.00
	1/31/2020	$62.12	$9,131.00				$9,258.00
	2/29/2020	$51.44	$7,561.00				$7,688.00
	3/31/2020
	4/30/2020	$46.47	$6,831.00		$0.87	$127.89	$7,085.00
	5/31/2020
	6/30/2020
	7/31/2020
	8/31/2020
	9/30/2020
	10/31/2020
	11/30/2020
	12/31/2020
	Cum.Div.					$255.00
12/31/2019						Capital+-	$102,487.00
						%+-	2.49%
1/31/2020						Capital+-	$102,742.00
						%+-	2.74%
2/29/2020						Capital+-	$93,436.00
						%+-	-6.56%
4/30/2020						Capital+-	$85,624.00
							-14.40%

Click to enlarge

Update on Portfolio Stocks

We are five months into these stocks being evaluated for capital gains and their dividend income for growing an investor’s asset base. At this point in the existence of the portfolio, with the exception of the pandemic invasion and the resulting shutting down our economic engine for workers earning an income, I haven’t seen any major events causing the precipitous drop in stock’s valuation. As if the pandemic was not enough, where more than 33 million workers have been placed in the unemployment line. The reality being only three of the stocks are showing a net gain for the initial $10,000.00 investment. Seven are showing a net loss from the initial $10,000.00 investment. In many cases, the net drop in share prices has been a 40% retracement. Finally, in mid-April, we started seeing some companies making a slow uphill recovery in their share prices. We can little afford any stumbles in this recovery mode, and this turns into another tumble in share prices. Let us hope this does not occur, but it is a well-known and validated axiom - stocks don’t move up in a straight line.

Barings BDC ((BBDC)) - Its first quarter showed excellent results. However, the company kept its next dividend payable at the current $0.16. If the current economic recovery stays intact, I would expect to see BBDC move higher. However, it will take time to recover back to the initial price of the portfolio. I think the management team's game plan offers investor a good vehicle for capital gains and dividends.

BlackRock Capital Investment Corp. (BKCC) - The stock took a drubbing during the March-April time frame. The company has maintained its $0.14 quarterly dividend. In my personal portfolio, the company's generous payout has allowed me to extract enough from its dividends that I have recovered my initial cash investment. "Long term! Long term!" is my mantra. With the current downturn, I will continue holding the stock and let my granddaughters get a reset in the share price. The current level should be a great entry price for more shares.

Blueknight Energy Partners (BKEPP) - The stock is currently priced above the initial entry price valuation. The dividend is very generous, and with it being a preferred stock, any dividend issued would start with these preferred shares. In my personal portfolio, I roll the dividends into new shares. The company is more than a driller for oil and a pipeline. It is heavily into supplying paving material for road projects. Those potholes are plentiful - wherever you live!

BlackRock Income Trust (BKT) - Another stock currently trading above the initial $10,000.00 investment. It continues to offer a nice dividend each month. It still offers value for those with a long-term horizon.

BlackRock Enhanced Equity Dividend Trust ((BDJ)) - The stock has taken a major hit in the March-April markets. However, the monthly and special dividends, which has been $438.00 over the five months of the portfolio, are a great reason to invest for the long term. In my personal portfolio, I hold an overallotment based on my normal allocation rules. As with others, my cumulative dividends have returned more than my initial cash investment.

Dodge & Cox Income Fund No Load ((DODIX)) - A “Steady Eddie” stock which pays a nice dividend. There is not much movement in the actual daily stock price. Currently, the shares are above the initial portfolio $10,000.00 investment. One can sleep well at night when holding this investment.

Hannon Armstrong Sustainable Infrastructure Capital (HASI) - My favorite stock holding! Just look at the January and February capital gains in the stock. The stock then retraced in March and April, but now is nearly back to initial entry price of the $10,000.00 portfolio. The shares in my personal account have generated a 48% appreciation, and they have an excellent $1.36 annual dividend. Hannon has a unique marketing plan and demonstrated growth in the future of our planet.

After the market closed for May 7^th, 2020, Hannon announced its first-quarter results. Highlights were:

• GAAP EPS - $0.35 vs. $0.21 in 2019 same period.
• Core Earnings - $0.43 vs. $0.33 in 2019 same period.
• Reaffirmed Guidance for 2020 Core Earnings to exceed previously announced mid-point of $1.43.
• Portfolio yield of 7.7% up by 11.5% from 2019 same period.

Horizon Technology Finance (HRZN) - The company is slowly rebuilding its share price after the March and April declines. First quarter results were stellar, and the company even paid out a special dividend of 50% of the normal monthly payout. With daily news stories about biotech companies racing to create new vaccines and drugs, HRZN is involved in a growth industry. It is on a steady pattern for reaching the $12.00 price level.

PIMCO Corporate & Income Opportunity Fund ((PTY)) - Long term, this is a stock to own and hold for the monthly dividend. PIMCO has a long history of managing its investments in downturns. I have owned it for about 15 years - and my total dividends have been wonderful!

Exxon Mobil (XOM) - Exxon is a special case and is in the portfolio due to an event that happened in the early 1940’s. The current dividend is decent, and Exxon is going all out to protect this dividend. Petroleum companies are not going away, but the industry is changing - investing new money should be done with great caution. Exxon was trading at nearly $80.00 in the last 52 weeks. Bankruptcies are beginning to happen in the oil industry, and banks are pulling back from making new loans to such companies. The banks remember the massive losses they suffered in the last downturn. They are switching to more favorable industries that offer product and services for the future.

Since I mentioned one non-dividend stock in the original article, I thought I would mention it again. In fact, I have added to my position since my initial investment. This is the only stock for which I have made an open market order since last November. The company is Idorsia (OTC:IDRSF), a Swiss biotech firm whose team had previously created a biotech firm that Johnson & Johnson (JNJ) purchased for $30 billion. It recently experienced two major catalysts. One, a partnership with J&J where the company filed an NDA with the FDA which made Idorsia eligible for a sizeable royalty income. The second is the announcement of a 100%-controlled Idorsia product and its highly positive Phase III clinical results. Here's a link to my most recent SA article about the company.

Good luck with your future investing decisions!

Analyst’s Disclosure: I am/we are long BBDC, BKCC, BKEPP, BKT, BDJ, HASI, HRZN, PTY, XOM, IDRSF. 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.