JT’s DAILY (WEEKLY as of 12/9/2013) BLOG for Month Of September 2021

Note: All previous month's posts are available in the archives, as noted above. 

All postings for the month are available here, sorted in descending order - i.e. most recent at the top.

1st Posting for Week Beginning Monday 09/20/2021

Posted Sunday 09/19/2021 07:00 PM

Stocks rose and fell last week, ending up just slightly below where they were at the start of the week, per all of the major stock averages I track. The economic releases of late have been inconclusive, with some indicating good news, inflation moderating and economic activity improving, and some indicating the opposite. The market reacted likewise.

Meanwhile, stocks on my lists going ex-dividend in my “look-ahead” period are listed following. The ex-dividend date and current yield, based on Friday’s close, are shown. Assume the dividend is paid quarterly unless otherwise indicated.

Eni S p A (E), 9/20/2021, 2.23%. E pays semi-annually. The yield is before considering foreign tax withholding.

Apollo Investment (AINV), 9/20/2021, 9.12%.

Gladstone Investment (GAIN), 9/21/2021, 5.82%. GAIN pays monthly.

Washington Real Estate (WRE), 9/21/2021, 2.67%.

SLR Investment (SLRC), 9/22/2021, 8.31%.

Getty Realty (GTY), 9/22/2021, 5.18%.

Vici Properties (VICI), 9/23/2021, 4.80%.

General Electric (GE), 9/24/2021, 0.32%. The yield says it all, this once-solid dividend stalwart now just paying a penny per quarter, on my Tier4, no longer recommended.

Prospect Capital (PSEC), 9/27/2021, 9.18%.  PSEC pays monthly.

Only two of the sixteen CEFs I track will be going ex-dividend in my “look-ahead” period for this post. Both are monthly payers.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 9/22/2021, 7.11%.

Miller Howard High Income Equity Fund (HIE), 9/22/2021, 5.82%.

General Mills (GIS) will be reporting earnings on 9/22/2021.

Several ratings changes of interest regarding my stocks came out last week, as follows.

Eni S p A (E) was upgraded from UnderWeight to OverWeight at JP Morgan.

Getty Realty (GTY) was initiated at Sector Perform at RBC Capital Markets.

Realty Income (O) was initiated at OutPerform at RBC Capital Markets.

Spirit Realty Capital (SRC) was initiated at Market Perform at RBC Capital Markets.

Cisco Systems (CSCO) was upgraded from Neutral to OutPerform at Credit Suisse.

Unilever (UL) was downgraded from Buy to Hold at Deutsche Bank.  Note that Unilever formerly had two symbols, UN and UL, but has merged, and now the symbol is simply UL.

Cisco Systems (CSCO) was reiterated at OverWeight at JP Morgan.

Chevron (CVX) was downgraded from OverWeight to Neutral at JP Morgan.

Exelon (EXC) was upgraded from Neutral to Buy at Mizuho.

Eaton (ETN) was downgraded from Buy to Hold at HSBC Securities.

Mid America Apartment Communities (MAA) was upgraded from Neutral to Buy at BTIG Research.

General Mills (GIS) was downgraded from OutPerform to Neutral at Credit Suisse.

Omega Healthcare Investors (OHI) was downgraded from Market OutPerform to Market Perform at JMP Securities.

The markets in some ways seem to reflect the mood of the country, kind of a malaise reminiscent of the Carter years, where nothing seems to be going right, and confidence in leadership is at a low ebb. I continue to believe that a stock market decline will occur relatively soon, and I am preparing for it, but also holding on to stocks that are paying well, and that I think can weather the storm, if it comes.

JT

 

1st Posting for Week Beginning Monday 09/13/2021

Posted Sunday 09/12/2021 09:00 AM

Stocks closed down five days in a row, beginning with the prior Friday, and on through the four day week just ended. There was no huge drop on any one day, just a slow drift downward that continued from each day to the next. While no single newsworthy item can be singled out as the cause of the lack of confidence, there are plenty of concerns, and the incompetent, corrupt, arrogant Biden administration’s responses, when there are any, add to the malaise.

Meanwhile, stocks on my lists going ex-dividend in my “look-ahead” period are listed following. The ex-dividend date and current yield, based on Friday’s close, are shown. Assume the dividend is paid quarterly unless otherwise indicated.

PotlatchDeltic (PCH), 9/14/2021, 3.19%.

Ares Capital (ARCC), 9/14/2021, 8.08%.

Digital Realty Trust (DLR), 9/14/2021, 2.94%. This formerly high yielder is now yielding under 3%, compliments of a sky high share price. If I owned it, I would sell.

Crown Castle International (CCI), 9/14/2021, 2.76%. Same comment as preceding applies to CCI as well.

Coca Cola (KO), 9/14/2021, 3.02%.

Iron Mountain (IRM), 9/14/2021, 5.17%. This REIT has just exploded upwards beginning in the 4th quarter of 2020, although the yield is still respectable. Hold or sell, that is not easy to decide. I sold, but perhaps I shouldn’t have. 

BlackRock Capital Investment (BKCC), 9/14/2021, 9.73%. This perennial underperformer is on my Tier4 list, not recommended, and yes, I sold it when I made that T4 decision.

Altria Group (MO), 9/14/2021, 7.11%. MO has actually stopped declining since early in 2021. I’m not really a “socially conscious” investor, but linking MO’s continued prosperity with my own has not appealed to me for quite some time, so I don’t own it, but it has some appeal as a survivor, I suppose.

Medical Properties Trust (MPW), 9/15/2021, 5.19%.

PennantPark Investment (PNNT), 9/16/2021, 7.41%.    

Greif (GEF), 9/16/2021, 2.82%.  

PennantPark Floating Rate Capital (PFLT), 9/16/2021, 8.86%.  

Eni S p A (E), 9/20/2021, 2.32%. Eni is no longer recommended, it is on my Tier4 list. It pays semi-annually, and the yield is before the proceeds are reduced by nearly 30% from Italian foreign tax withholding and fees. There are better US-based oil company alternatives to it, no doubt.

Apollo Investment (AINV), 9/20/2021, 9.07%. 

Eleven of the sixteen CEFs I track will be going ex-dividend in my “look-ahead” period for this post. All are monthly payers except DNIF, DIAX, and QQQX, as noted.

BlackRock Debt Strategies Fund (DSU), 9/14/2021, 6.46%.

Nuveen Dow 30SM Dynamic Overwrite Fund (DIAX), 9/14/2021, 6.25%. DIAX is a quarterly payer.

BlackRock Enhanced Equity Dividend Trust (BDJ), 9/14/2021, 5.92%.

Cohen & Steers Quality Income Realty Fund (RQI), 9/14/2021, 5.88%.

Nuveen Real Asset Income and Growth Fund (JRI), 9/14/2021, 7.16%.

Nuveen Nasdaq 100 Dynamic Overwrite Fund (QQQX), 9/14/2021, 5.67%. QQQX pays quarterly.

BlackRock Energy and Resources Trust (BGR), 9/14/2021, 5.32%.

Dividend and Income Fund (DNIF), 9/15/2021, 6.45%. DNIF, managed by Bexil Advisors LLC, pays quarterly.

Gabelli Utility Trust (GUT), 9/15/2021, 7.38%.

Gabelli Dividend & Income Trust (GDV), 9/15/2021, 4.92%.

Clarion Global Real Estate Income Fund (IGR), 9/17/2021, 6.54%.

Several ratings changes of interest regarding my stocks came out last week, as follows.

Southern Co (SO) was upgraded from Neutral to Buy at Guggenheim.

Ventas (VTR) was upgraded from Hold to Buy at Deutsche Bank.

Alliant Energy (LNT) was downgraded from Buy to Neutral at Guggenheim.

Johnson & Johnson (JNJ) was downgraded from OverWeight to Equal Weight at Morgan Stanley.  

Merck (MRK) was also downgraded from OverWeight to Equal Weight at Morgan Stanley.

Intel (INTC) was resumed at Hold at Deutsche Bank.

Vodafone (VOD) was initiated at OutPerform at Bernstein. VOD is on my Tier4 list, but apparently Bernstein disagrees with my view of VOD.

Cisco Systems (CSCO) was downgraded from OverWeight to Equal Weight at Morgan Stanley.

Kimberly Clark (KMB) was initiated at Hold at HSBC Securities.

Crown Castle International (CCI) was downgraded from OutPerform to Perform at Oppenheimer.

Freeport McMoRan (FCX) was downgraded from Neutral to UnderPerform at Credit Suisse.

Stocks are holding up better than expected so far this month, even considering the lackluster week just ended. It is hard for me to see the good times resuming any time soon, but as always, anything is possible. Markets seldom do what they “should” do, I have learned.

JT

 

1st Posting for Week Beginning Tuesday 09/07/2021

Posted Monday 09/06/2021 11:00 AM

Stocks have been up and down since my last post two weeks ago, with the major averages eking out a small net gain over the period. September has often seen declines after a mediocre summer, and many pundits are predicting a 5% to 10% correction is due. The monthly employment report for August released Friday was a major disappointment, as the jobs recovery seems to have been derailed by the new Covid “delta” strain, vaccination controversies, mask controversies, and re-opening back-tracking. The Biden administration continues to be exposed as inept in dealing with all our problems, most clearly evidenced by the catastrophically botched withdrawal from Afghanistan.  

Stocks on my lists going ex-dividend in my “look-ahead” period are listed following. My usual “look-ahead” period for dividends is the upcoming week plus the Monday following, and that is the case for this post. The date and current yield, based on Friday’s close, are shown. Assume the dividend is paid quarterly unless otherwise indicated.

Golub Capital BDC (GBDC), 9/7/2021, 7.34%.

Public Service Enterprise Group (PEG), 9/7/2021, 3.18%.

Kimco Realty (KIM), 9/8/2021, 3.08%.

Newmont Mining (NEM), 9/8/2021, 3.69%. NEM has a very respectable dividend for a mining stock, comparing favorably to today’s reduced yields for many utilities and REITs.                             

Compass Minerals International (CMP), 9/9/2021, 4.24%.

Kimberly-Clark (KMB), 9/9/2021, 3.24%.

Occidental Petroleum (OXY), 9/9/2021, 0.15%. This formerly high-yielding energy stock is on my Tier4 list, no longer recommended, compliments of a reduced dividend of a penny per share per quarter.

Automatic Data Processing (ADP), 9/9/2021, 1.79%.  ADP is a relatively new addition to my Tier1 list. While no doubt a solid firm, with a sub-2% yield, I’m wondering why I added it. But like many of my stocks, it has risen far above my maximum buy price, so be sure to consider my buy prices before buying, to avoid overpaying.

Only one of the sixteen CEFs I track will be going ex-dividend next week, PIMCO Corporate & Income Opportunity Fund (PTY), on 9/10/2021, yield 7.90%. PTY just reduced the monthly dividend by a little over 8%, but the yield, now 7.90%, remains quite respectable, which factors in the CEF dropping more than $2 after announcing the cut. The main consideration discouraging me from rushing to buy PTY is not the cut, but rather the fact that PTY trades at a whopping 40% premium to NAV. One of the (usual) benefits of buying a CEF is that often, the CEF can be bought at a discount to NAV. Certainly not the case with PTY. I would hold off on rushing out to buy CEF until the premium drops considerably.

I missed another CEF in my posting more than two weeks ago, AllianceBernstein Global High Income Fund (AWF), which went ex-dividend 9/2/2021. AWF pays monthly, and currently yields 6.37%.

None of my stocks will be reporting next week.

The end of summer is usually a slow time for analyst activity, and that pattern continues, as only a few new ratings on my stocks came out the last two weeks, as follows:

Nucor (NUE) was initiated at Buy at Seaport Global Securities on 8/24/2021.

Ventas (VTR) was upgraded from UnderPerform to Market Perform at BMO Capital Markets on 8/26/2021.

Omega Healthcare Investors (OHI) was downgraded from Buy to Neutral at Bank of America on 8/26/2021.

Occidental Petroleum (OXY) was initiated at Buy at Citigroup on 8/31/2021. This is a “go figure” rating, in my opinion. It certainly is a contrarian view of OXY.

Kimco Realty (KIM) and Mid America Apartment Communities (MAA) were both initiated at OverWeight at Barclays on 9/1/2021.

Unilever (UL) was downgraded from Neutral to UnderWeight at JP Morgan on 9/2/2021.

Most market followers, excepting the most rabid bulls, agree that stocks are over-priced at this point. The only rationale I can see for buying at these prices is if you believe the present condition will continue for a long time yet. It might, it has in fact lasted longer than many expected, but I personally believe a day of market reckoning will be coming sooner rather than later, and I’m taking steps now to be ready for that eventuality.

JT  

 

1st Posting for Week Beginning Monday 08/23/2021

Posted Sunday 08/22/2021 10:00 AM

Stocks lost ground overall last week, even after a modest rebound on Friday. The terrible headlines from the botched withdrawal from Afghanistan were certainly a factor, but there are also other causes for concern. The upsurge in Covid cases as the new “delta” strain spreads, disagreements over opening schools and businesses and vaccine/mask requirements, the now-evident recovery slowdown, quashing hopes of a quick return to economic “normalcy”, and the huge surge of illegals at the southern border resulting from Democrat policies all are contributing to the unease. The similarities of many current market conditions to previous market tops before major declines is also a factor.

Stocks on my lists going ex-dividend in my “look-ahead” period are listed following. While my usual “look-ahead” period is the upcoming week plus the Monday following, for this posting it will be simply the next two weeks, August 23 through September 3rd.  The reason is this will be my last post for August, and my next posting will not be until the weekend of September 4 and 5.

The date and current yield, based on Friday’s close, are shown. Assume the dividend is paid quarterly unless otherwise indicated.

Johnson & Johnson (JNJ), 8/23/2021, 2.36%.

Prudential Financial (PRU), 8/23/2021, 4.41%.

Wheaton Precious Metals (WPM), 8/26/2021, 1.41%.

NextEra Energy (NEE), 8/26/2021, 1.78%.

Main Street Capital (MAIN), 8/26/2021, 5.86%. MAIN pays monthly.

Prospect Capital (PSEC), 8/26/2021, 8.97%. PSEC also pays monthly.

Lumen Technologies (LUMN), formerly CenturyLink Communications, 8/27/2021, 8.45%.

AGNC Investment (AGNC), 8/30/2021, 9.06%. AGNC is a monthly payer.

STAG Industrial (STAG), 8/30/2021, 3.47%. STAG is another monthly payer.

Barrick Gold (GOLD), 8/30/2021, 1.87%.

Brookfield Renewable Partners LP (BEP), 8/30/2021, 3.19%.

McDonalds (MCD), 8/31/2021, 2.16%.

Kellogg Co (K), 8/31/2021, 3.51%.

Safety Insurance Group (SAFT), 8/31/2021, 4.35%.

Realty Income (O), 8/31/2021, 3.95%. O pays monthly.

Kraft Heinz (KHC), 8/31/2021, 4.37%.

Gladstone Investment (GAIN), 9/2/2021, 5.83%. GAIN pays monthly.

Pepsico (PEP), 9/2/2021, 2.72%.

Three of the sixteen CEFs I track will be going ex-dividend in my “look-ahead” period for this post. All are monthly payers.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 8/23/2021, 7.76%.

Miller Howard High Income Equity Fund (HIE), 8/23/2021, 5.90%.

First Trust Intermediate Duration Preferred & Income Fund (FPF) has not yet announced the ex-dividend date, but based on prior months, it will likely be 9/2/2021. FPF currently yields 5.99%.

Earnings season is mostly over, but three firms on my lists will be reporting in the “look ahead” period, as follows:

Golub Capital BDC (GBDC), on 8/23/2021.

Smucker JM Co (SJM), on 8/26/2021.

Greif (GEF), on 9/1/2021.

My closing comments basically amount to “same song, 99th verse”, ie, no different from my recent posts. Yields for “quality” stocks are at all-time lows, reflecting extended share prices. Two precious metals speculations I track that pay a small dividend, as listed above (Barrick Gold (GOLD) and Wheaton Precious Metals (WPM)), actually have yields comparable to major industrial stocks. In normal times, I would drop a major stock paying less than 3%, a utility paying less than 4%, a REIT paying less than 5%, and a mortgage REIT or BDC paying under 6%. But these are not normal times for income investors. Unfortunately, today one must go farther out on the risk spectrum to get a decent yield.

JT