86 Investments in The Rose Portfolio with 36 being in Defensive sectors.
DEFENSE and SECTORS
The chart below shows the portfolio has 35 holdings in the 4 defensive sectors of consumer staples, healthcare, communication, and utility. The abbreviation PV is the % portfolio value and Pinc is % income. One bond plus cash/options add up to 36 investments and 58% of total portfolio value. Over half in value should seem good enough, but the income comes to only ~ 44% with the already sold income, not good enough for me any more. I should have been more diligent in building income to 50%. That is and will be my current plan and main focus from now on.
The remainder or 50 investments are divided by the following sectors or types as follows:
42% of the value gives 56% of the income, which I do hope to change. The May individual stock listing is shown here in a previous blog showing each company and the % value and income. The following is a current 86 stock sector list by name and ticker in descending order by current value:
Consumer Staples: 12
Philip Morris (PM), Kimberly Clark (KMB), Coca Cola (KO), General Mills (GIS), Pepsico (PEP), Molson Coors (TAP), Mondelez (MDLZ), Target (TGT), JM Smucker (SJM), Hershey (HSY), Kraft-Heinz (KHC)
Health Care: 9
AbbVie (ABBV), Johnson & Johnson (JNJ), Merck (MRK), Bristol Myer Squibb (BMY), Amgen (AMGN), Walgreens BA (WBA), Pfizer (PFE), CVS Pharmacy (CVS), Teva Pharma (TEVA).
Communication/Telecom: 7
Verizon (VZ), ATT (T), BCE (BCE), Vodafone (VOD), China Mobil (CHL), Viacom CBS (VIAC), and Meredith (MDP).
Utility: 7
Dominion (D), Xcel (XEL), Southern (SO), Madison Gas & Electric (MGEE), Duff N Phelps (DNP), Duke Energy (DUK), and Wisconsin Electric (WEC).
Tech and Fin Tech: 5
Mastercard (MA), Cisco (CSCO), Visa (V), Broadcom (AVGO), and Intel (INTC).
Consumer Discretionary: 3
Home Depot (HD), McDonalds (MCD) and Genuine Parts (GPC)
Industrial: 7
Lockheed Martin (LMT), General Dynamics (GD), 3M (MMM), Cummins (CMI), Union Pacific (UNP), Covanta (CVA) and Fortress (FTAI).
Material: 1
LyondellBasil NV (LYB)
Finance: 1
Metropolitan Life (MET)
Energy: 10
IOC/Integrated Oil Companies and Refiners:
Exxon Mobil (XOM), Valero (VLO), Chevron (CVX), Royal Dutch Shell (RDS.B) and Occidental (OXY).
MLPs and ETFs:
Enbridge (ENB), Teekay LNG (TGP), Hoegh LNG (HMLP), Knot Offshore (KNOP) and Alerian ETF (AMLP).
Fixed Bond: 1
Starwood (STWD) 4.75% matures 2025 Cusip 85571BAL9
Fixed Preferred: 6
Teekay/b (TGP-b), MTBC (MTBCP), (NGL-b), Colony/g (CLNY-g), GasLog Partners/a and /c (GLOP-a) and (GLOP-c).
Regulated Investment Companies / RICs:
Real Estate: REITs: 9
Simon Property Group (SPG), Iron Mountain (IRM), Ventas (VTR), Brookfield Property (BPYU), Colony (CLNY), GEO Group (GEO), CorCivic (CXW), Macerich (MAC) and (EPR).
Misc RICs:
Mortgage Reit: 1
Two Harbors (TWO)
Fund: 1
Ares (ARDC) short term bond fund
Business Development Companies (BDC)s: 6
Ares Capital (ARCC), Pennant Floating Rate (PFLT), New Mountain Finance (NMFC), TCP BDC (CGBD), FS KKR (FSK) and Blackrock TCP (TCPC)
DIVIDEND INCOME
This is how I feel somethings, just hanging on, however
The Rose portfolio is alive and doing well for income; hanging on….
The Portfolio currently sits with a 5.25% yield, so as the value rises, the yield goes down: fine with me.
I am still happily receiving more income in 2020 than 2019 even with unhappily receiving many cuts and suspensions. If this had not happened I might not have realized how I should not be tempted by so many high yield investments or just non defensive ones. I admit to being warned by The Fortune Teller personally not to own so many energy stocks, gosh was he right. Income is still rather high for them as well, but MLPs generally do give off that high distribution. They should rise back up in price some day, but riding along with so much income there was not a particularly good idea of mine. RDS.b cut their dividend by almost 60% and OXY is down to almost nothing, just 1c per Q; Ouch! I kept mine, but you can ask The Fortune Teller if he still owns them at Wheel of Fortune, his service, I sometimes do not pay attention and continue to hang on to sell suggestions. I only have myself to blame for anything I do or might not do. The June current income was down 5.4% compared to the equivalent month of Q1 March 2020 with total Q2 dividends down 7.6% from Q1, BUT Simon Property Group (SPG) has announced it will pay its delayed lower dividend in July, so I will happily have that to add to the load of cash arriving then. Also, to be noted, is that I do have more cash than usual, so the income has room to grow when I find the right value and quality desired.
JUNE DIVIDENDS
Payment date is noted in no particular order other than the 5 companies that pay monthly listed first.
Suspended: EPR and TAP and was waiting to hear about SPG, which mentioned will cut and pay in July.
Raises: JNJ, PEP, SO and MET
Cuts: NMFC and RDS.B
Please see the list for the actual change, if any, in the last column.
| JUNE | Dividend | ||
| Pd Date | STOCK | / share | |
| 10 | DNP | 0.065 | monthly |
| 30 | ARDC | 0.0975 | monthly |
| 10 | DNP | 0.065 | monthly |
| 1 | PFLT | 0.095 | monthly |
| 15 | MTBCP | 0.2295 | monthly |
| 8 | AMGN | 1.6 | |
| 30 | ARCC | 0.4 | |
| 30 | AVGO | 3.25 | |
| 30 | BPYU | 0.3325 | |
| 30 | CIM-b | 0.5 | now sold |
| 4 | CMI | 1.311 | |
| 10 | CVX | 1.29 | |
| 22 | D | 0.94 | |
| 1 | ENB | 0.572 | Canadian |
| 15 | GLOP-a | 0.54 | |
| 15 | GLOP-c | 0.5313 | |
| 18 | HD | 1.5 | |
| 15 | HSY | 0.773 | |
| 1 | INTC | 0.33 | |
| 9 | JNJ | 1.01 | raise/was 95c |
| 26 | LMT | 2.4 | |
| 15 | LYB | 1.05 | no raise yet |
| 3 | MAC | 0.5 | 80% as shares |
| 15 | MCD | 1.25 | |
| 12 | MMM | 1.47 | |
| 30 | NMFC | 0.3 | cut from .34 |
| 30 | PEP | 1.0225 | raise from .955 |
| 5 | PFE | 0.38 | |
| 22 | RDS.b | 0.32 | cut from .94 |
| 1 | SJM | 0.88 | |
| 8 | SO | 0.64 | raise from .62 |
| TAP | susp | suspended/ouch | |
| 30 | TCPC | 0.36 | |
| 10 | TGT | 0.66 | next to 68c/3% |
| 30 | UNP | 0.97 | no raise yet |
| 2 | V | 0.3 | |
| 3 | VLO | 0.98 | nice |
| 12 | WBA | 0.4575 | |
| 1 | WEC | 0.6325 | |
| 10 | XOM | 0.87 | hanging on |
| 26 | KHC | 0.4 | hanging on |
| 12 | MET | 0.46 | raise from .44 |
| 15 | MGEE | 0.3525 |
None the less, even with all the cuts and suspensions, income is still more than 2019, but what will the future bring?
Looking at future 2021 Income:
This is probably more difficult than it seems, but I have tried to look at what 2021 might look like with many of the suspended dividends. I did not predict any raises, so this was not a pleasing adventure, as I did the following:
ZERO income: TAP, MDP, CNY, EPR and CXW
CUTs known: RDS.b, OXY, CVA, VTR, MAC, FSK, TWO, SPG, ARDC, AMLP and others.
Amazingly this procedure provided more income than 2019, however a bit lower than 2020 by ~1.2% . One investment TWO has increased the payment already from the cut from 40c to 5c, and now raised it a bit to 14c. Hopefully, more will do the same, but I am sure I can not count on that. One advantage that I see from high yield is that it has room to vary and still keep ahead of many other investments, however inconsistent or undependable the payment might be. Doom and gloom, but to me I had to take the look.
PORTFOLIO VALUE $
I would love to say the value is up, but alas it is not. It’s actually down 8.7% from its high in January. The S&P is down 7.5% from its high, so if you want a reference, that is probably a good one. I would flunk as an accountant for not keeping track of each RMD, however small, as it comes in along with cash inflows from options, etc. The amounts are small % wise compared to the total portfolio value. Those positive numbers help offset, sad to say, the bad investments, like AMZA, I sold. The energy sector, real estate and some other high yield investments continue to pull valuation down, so in truth it could actually be much worse if I had not been diversified. I will continue to work towards more defensive stocks for income, that’s my plan. I like to think I started it in motion with June transactions.
JUNE TRANSACTIONS
The net activity was 1 new buy, 5 sells, with lots of adding on and some trimming
The list is shown below and I will discuss the trim of some Target and the new purchase of Duke using Fastgraph charts after the chart shown below.
| JUNE | Type or | |||||
| Buys | Sector | Stock Name | Ticker | Price | Misc Info | Misc Info |
| Gold Hedge | 3x Gold ETN | UGLD | 171.78 | ETN gone 7/3 from | All Nat exchanges | |
| Financial | Starwood Bond | STWD bond | 900 | 7.3% yld | ||
| Tech-hc pref | MTBC pref | MTBCP | 25.5 | 2.75 dividend/yr | .2295/mo 10.7%yld | |
| Cons Staple | Altria | MO | 42.6 | Div Safety Sc 55 | 8.8% yield | |
| Comm-tele | Vodafone | VOD | 17.44 | will get more | lower soon | |
| “ | VOD | 15.59 | still would add | lower | ||
| RE-data storg | Iron Mt | IRM | 29.48 | poor timing buy | 8.4% yield, higher now | |
| RIC- BDC | KKR | FSK | 4.14 | Rounding 4 split | 1:4 rev split | |
| Comm-tele | China Mobil | CHL | 36.5 | Option assigned | raised divi $2.07 | |
| Healthcare | Merck | MRK | 75.85 | Building position | averaging down | |
| NEW | Utility | Duke Energy | DUK | 82.11 | 3.74 Div = 4.6%yld | Bldg now w/Puts |
| Healthcare | Bristol Myr | BMY | 56.11 | Option assigned | ||
| Comm-tele | Meredith Publ | MDP | 26.55 | Opt Assignmt | divi suspended | |
| “ | MDP | 15.45 | also sold $15 put | 4 cheaper shares | ||
| Material | LyondellBasell NV | LYB | 73.71 | Opt Assignmt | o well | |
| Healthcare | Walgreens BA | WBA | 41.51 | 1.83 div | 4.4% yield | |
| Industrial | General Dynamics | GD | 145.63 | 4.40 /yr div | 3% yield now | |
| RE-retail | Brookfield Prop | BPYU | 9.9 | averaging down | hard to ignore | |
| Healthcare | Pfizer | PFE | 31.77 | 1.52 divi | 4.8% yield | |
| Energy | Enbridge MLP | ENB | 30.02 | hard to ignore | small amt | |
| SELL | Sector | Stock Name | Ticker | Price | Misc Info | Misc Info |
| Trim | Tech | Broadcom | AVGO | 303 | now at core | position |
| All gone | Fin-Pref | NY Mortgage-Prf N | NYMTN | 20.2 | ave sale price | net pos return minor |
| All gone | Fin-Pref | NY Mortgage-Prf M | NYMTM | 19.51 | ave sale price | net pos slight gain |
| All gone | Comm-tele | Meredith Publ Bond | MDP Bond | 970 | ave sale price | Nice pos gain |
| All gone | Gold Hedge | 3x Gold ETN | UGLD | 193.35 | nice profit | $22/sh gain-short term |
| All gone | Fin-Pref | Chimera-Prf B | CIM-b | 22.2 | ave sale price | net pos slight gain |
| Trim | Energy | Royal Dutch Shell-b | RDS.b | 32.05 | also sold $35 call | Loss on tiny trim |
| All gone | RE-prison | GEO Group | GEO Bond | 843 | small profit on all | |
| Trim | Cons Staple | Target | TGT | 122.4 | Strike 115+7.44prem | Cost $67/ nice gain |
Most notable trim was Target as it also was a defensive stock, however it was getting over valued.
Below is the current "FG" Fastgraph of Target, copied from the paid subscription service owned and run by Chuck Carnevale.:
Earnings (orange line) look to be declining in 2021 by 22%. The price (black line) certainly looks overvalued to me especially with that in mind. The normal P/E is 15 (orange line) and it currently is selling at the P/E of 20.5 and a price of ~$119. Using Jan 2022 and P/E 15, the chart shows a price of ~$102. I will add back the shares again one day if and when the price seems more favorable. Currently it also has only a dividend yield of 2.3% and 5DGR of 5.7% and last year raise of 3.1%. This does not scream I should pay more than it deserves. Target is over loved and valued to me, but I did retain a core position and will add it back if and when the price shows a better yield.
As I want defensive holdings, and not many that I want to add to look value priced right now in consumer staples, I had to search outside that sector. I found value and a good yield in the utility sector with Duke energy.
NEW BUY-1
Duke Energy (DUK) is a US energy company that operates in 3 segments. Electric /gas utilities and infrastructure along with commercial renewables primarily in the Carolinas, Florida and Midwest.
Below is the “FG” Fastgraph chart of Duke.
The first shares bought sit at around 4.6% yield ($82.11) with the dividend at $3.87 per year. I also have sold puts at various prices to get shares for $76 /$78 with the premiums. However, if it falls just too much lower to $77.40 for 5% yield, I will just buy more outright.
Utilities in general should be bought near or below the normal P/E ratio, which here is 17.6 and equates to ~$91 for fair value; using $5.17 in earnings shown on the FG chart. This is one heck of a nice buy here and now at this $82 price. Dividend growth for 5 years is 3.5% so it should be bought as low as you can go to make total yield with the dividend growth advantageous. Right now that adds up to 8.1 (3.5 + 4.6). Utilities should be 8 or better for a good buy using the noted Chowder #. I agree and say “just git some”. Note also the S&P credit rating of A-. Steady as it goes and it should be one to enjoy owning for years. I am patiently waiting to add to my core position in WEC if it heads lower, but it is not cooperating. As I write this Dominion (D) just announced a sale of its pipeline to BRK.A. The price is tanking and Duke is also involved with the pipeline cancellation. This is breaking news and I might have some more trouble brewing for the dividends and portfolio.
JULY INTENTIONS and Watch List
I always have a watch list and now want quality and defensive stocks to lead my choices.
I evaluated the Rose 86 with the searching out the following:
Morningstar top buy, 5star and 4 stars, buy prices and fair values were done first.
Value Line statistics for those with the #1s leading the list and added their 3 year mid point value.
FG 10 year and current P/E and Earnings Yield came next and then on to the final evaluation.
The statistics got a Yes or No for Passing and finally for the M* price.
The final chart gave me some good watching results and I utilized some of those in my June purchases and might do more of the same in July. Prices can change quickly, but many of these are still attractive.
Current price is from July 3rd and most data from that week as well.
Earn YLD is a % from FG and a good one should be 6.5 or more to pass. I also looked for a now P/E lower than the 10 year average to Pass and get a large Y and the number is in bold.
Value Line “VL” 1 means at a great value and generally a 3 means fair value “FV”. Most stocks listed are below the VL mid 3 year price range except XOM, VIAC and KHC.
Pass Y/N column is for Earn Yield and P/E with a large Y meaning YES and small y meaning not as quite as good or just close.
Large N is NO and small n is not so bad. The price column is for passing M* Buy Price.
All of these were 5 or 4 stars when I started the chart and by the time I got ready to publish JNJ dropped to a 2 and VIAC to a 3 and some had price adjustments. WBA was higher and now is $38.50.
Last column gives my thoughts/Rose Intention and a price I might buy some at, not the price for anyone else, just me!
Summation/Conclusion:
The following stocks stand out:
CVS at $64.40
PFE near $32 or lower for me.
CHL below or near $35, if I want more, I don’t really.
WBA possibly because it had a M* price $42 when I started this, so I will be holding for it now.
PM and MO are good, but its a troubled product, so I am holding to what I currently own, no more thank you.
RDS.B and XOM pass on price, but not earnings. Not buying anymore.
TAP is a buy, but has a suspended dividend.
VIAC points to a nice buy, but I have what I want and would add on if it dips one more time, no real decision as yet.
KHC could be a buy if it keeps its dividend, but I would only add near $28.
ENB is probably a buy near $28 or even $30 if you need it, its hard to ignore, but know it is Canadian and can have currency exchange changes in the dividend.
FTAI has a K1 tax form and I am unsure of it, so will say no more.
Good Luck to all and know I enjoy sharing and hope you enjoy reading my investing adventures.
I would appreciate your comments and let me know if this is helpful in anyway. I really do need to know!
Happy Investing to all :)) Rose
