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October 2019 Portfolio Update: Weak Dividends, But Bought A Prison Stock


Trades made and dividends received.

Selling MPW, buying CXW and NEWT.

Plans going forward.

The real portfolio activity took place on Halloween. On October 31 Medical Properties Trust (MPW) reached my sales price of $20.80 so I sold it. I took those proceeds and bought CoreCivic (CXW) and Newtek Business Services (NEWT). I discussed this in more detail in a separate post. I also bought a little Occidental Petroleum (OXY) earlier in the month. 

Other than that I just sat back and looked at my portfolio now and then, blinking occasionally at the way the value kept increasing. 

Here's a quick numbers summary:

  • Number of buys: 3
  • Number of sells: 1
  • Dividend increase over October, 2018: - 3.97%
  • Dividend increase over July, 2019: -21.14%
  • October change in portfolio value: 4.93%
  • Current portfolio yield: 3.52%

NOTE: Portfolio yield does not include some companies that may have announced dividend increases but have not yet paid them. I enter payments into my spreadsheet as I receive them. I may occasionally miss a dividend announcement but I never miss getting paid. So this is how I track them.

Trades made and Dividends Received

Trading Activity:

  • 10/10/19 - Bought OXY at $40.66
  • 10/31/19 - Sold MPW at $20.80. This closed my MPW position.
  • 10/31/19 - Bought CXW at $15.20. This opened a new position in my Roth.
  • 10/31/19 - Bought NEWT at $22.05. This opened a new position in my Roth.

Dividends Received: 

  • 10/2/19 - Iron Mountain (IRM)
  • 10/9/19 - Illinois Tool Works (ITW) - increase from $1.00 to $1.07 per share
  • 10/10/19 - MPW - increase from $.25 to $.26 per share
  • 10/10/19 - Altria Group (MO) - increase from $.80 to $.84 per share
  • 10/10/19 - Best Buy (BBY)
  • 10/15/19 - OXY - increase from $.78 to $.79 per share
  • 10/28/19 - Two Harbors Investment (TWO)
  • 10/31/19 - New Residential Investment (NRZ)

The Trades:

The OXY buy is simple. Fidelity dropped their transaction fees, OXY was trading very cheap with a 7.77% yield and I celebrated this newfound freedom by picking up 25 shares. For more details - and a concern I have with no longer being charged for trades - see my recent post, "The Dark Side of No Transaction Fees."

The paired MPW/CXW/NEWT trade is discussed in my post, "Going to Prison: Selling MPW, Buying CXW and NEWT."

The Dividends:

This was a terrible dividend month if I view it in isolation. It was less than October of 2018 and much less than in July. Four of the companies paying in October increased their dividends this month. So how could this happen?

First, I'm still feeling the effects of the loss of Uniti Group (UNIT) dividends. Second, Walt Disney (DIS) pays twice a year, including July but not October. Third, I sold about half of my NRZ on July 30 taking away those dividends. When a company pays 13% this shows up.

On the plus side, my September MO buy and the little bit of OXY I added will help come January. CXW pays in October and represents an increase of about 25% above what MPW paid. I never like seeing a negative dividend number but the real test will be if my 4th quarter dividend income is more than July-September.

Plans Going Forward

In contrast to October, November should be a good dividend month. I have no plans to make another buy at under $5,000 though I could add some money to the market. There are several companies trading at nice prices. At this precise moment my first pick would be OXY but if MO drops due to the Juul impairment I could go there instead. And there are others. 

On the sell side, Bausch Health (BHC) has been popping lately. I will almost certainly sell all of it if it reaches $30. I doubt this happens - the stock has a nasty habit of dropping after earnings beats. I could also sell some below this level to generate cash for a buy.

In the Roth, AT&T (T) is the closest to reaching a sell point which is $40.80. Unlike MPW, this will not give me enough to buy two companies so whatever I pick up will be a larger position than normal. I better be sure. At this precise moment Apple Hospitality (APLE) is the number one candidate but there are other REITs and BDCs depending on where things trade when/if I reach that point. And if MO, OXY or something else I like are trading low enough to give over 7% yield I could even pick one of them up.

So that was October. A bad dividend month but I now own a prison, or at least a prison stock. Last December I bought MO to invest in the propensity of people to want to kill themselves. In March I bought Lockheed-Martin (LMT) so I could invest in the propensity of people to want to kill each other. And I am now invested in the propensity of US society to want to lock people up.

And on that cheery note - Happy investing everyone!

Disclosure: I am/we are long BBY, BHC, CXW, DIS, IRM, ITW, LMT, MO, NEWT, NRZ, OXY, T, TWO.

Additional disclosure: I am not a professional investor and do not offer investing advice. I have a college degree in Animal Science and used to train horses for a living. Would you really want to tell a loved one you invested based on something an ex-horse trainer/animal scientist wrote?

I didn't think so. Please perform your own due diligence when making investing decisions.