Stocks continued to rally the final week of 2020, with the major averages finishing at or close to all-time highs. Most long-time observers, myself included, see the year-end surge as a triumph of hope over experience. It seems to me that there are more storm clouds ahead in 2021 than the market is predicting. All I can say is anyone buying at these levels needs to be aware that they are buying in at or near all-time highs, with certain notable exceptions, such as fossil fuel energy firms. Buying at highs does not usually turn out well for long-term returns on investment.   

The New Year starts out somewhat sluggish for dividends, with only a few of my stocks scheduled to go ex-dividend next week.

Main Street Capital (MAIN), ex-dividend date 1/4/2021, yield 7.56%. MAIN pays monthly.

Verizon (VZ), ex-dividend date 1/7/2021, yield 4.32%.

General Mills (GIS), ex-dividend date 1/7/2021, yield 3.48%.

AT&T (T), ex-dividend date 1/8/2021, yield 7.30%.

Universal (UVV), ex-dividend date 1/8/2021, yield 6.38%.

Only one of the fifteen CEFs I track will be going ex-dividend next week. Also listed are two that had not yet announced when I last posted, but went ex-dividend December 30^th. All are monthly payers.

BlackRock Debt Strategies Fund (DSU), ex-dividend date 1/7/2021, yield 8.10%.

First Trust Intermediate Duration Preferred & Income Fund (FPF), ex-dividend date 12/30/2020, yield 8.10%.

AllianceBernstein Global High Income Fund (AWF), ex-dividend date 12/30/2020, yield 6.67%.

None of my stocks will be reporting next week.

Also, none of my stocks received any upgrades, downgrades, etc. last week, per E*Trade. Apparently the analysts took the holiday week off.

I have updated the prices/yields on my stock lists as of 12/31/2020, and adjusted my recommended buy and sell prices appropriately. The buy/sell prices are not to be taken literally, but rather reflect a range that considers where the stock is trading currently and in the recent past, and thus what would seem to be a prudent buy or sell price assuming no major change occurs. These levels are also influenced by my view of the market, which as noted, is that it is over-valued currently.

A lot has happened since 1/1/2020, but not a lot since my last update at mid-year. Some stocks that eliminated their dividends and thus were moved to Tier4 (not recommended list) quickly reinstated their dividends, and are now back on Tier3 (recommended, with the caveat that these are high risk stocks, as are all Tier3 stocks). The energy depression continues, with no energy stocks now on my Tier1 list (safest, least likely to cut or eliminate their dividends).

A recap of these changes is:

Moved from Tier1 to Tier2: Chevron (CVX), Prudential Financial (PRU), AT&T (T).

Moved from Tier2 to Tier1: General Mills (GIS), Medical Properties Trust (MPW), Stag Industrial (STAG).

Moved from Tier2 to Tier3: Royal Dutch Shell (RDS.B).

Moved from Tier4 back to Tier3: Lumen Technologies (LUMN), Kimco Realty (KIM), MFA Financial (MFA), Oaktree Specialty Lending (OCSL). LUMN (formerly CenturyLink (CTL)) has stabilized and held the dividend to a respectable level for a year or so, while the other three “promotions” quickly reinstated their dividends they dropped at the outset of the Covid crisis. One Tier3 stock “hanging by a thread” is Energy Transfer LP (ET), which is a severely-stressed MLP, with it’s own special problems, self-induced, in addition to being in the condemned energy midstream MLP sector. If ET can continue to pay out, it represents a great bargain at current levels. That’s a major “if”, however, especially if the “hits just keep on coming” like they have in recent weeks at ET.  

As a tax preparer, the upcoming season promises to be challenging, with Covid restrictions now institutionalized, tax changes galore, and the IRS likely to be as unresponsive as ever. So I hereby announce that I will suspend posting until after tax season. The website will remain online, and if time permits, I will post an occasional update. My plans are to resume tracking and reporting on my select universe of stocks, as soon as the tax season ends, hopefully April 15.

JT

Stocks went up 3 of the 4 days of the holiday-shortened week just ended, but the one down day was nearly equivalent to the total gain of the three positive days, so stocks ended about where they began the week. Next week, the final trading week of the year, may not be so benign, considering the latest news out of Washington. The much ballyhooed bipartisan agreement reached at the 11^th hour regarding government funding, defense, and a Covid relief package, is now stalled because Trump suddenly and unexpectedly is refusing to sign the bill. He must veto the bills in order for them to be overridden. If he instead does nothing (the so-called “pocket veto"), the bills will expire before a new Congress can be sworn in, and Congress will then be back to square one.

Meanwhile, the last 4 days of the year will see a year-end flood of stocks going ex-dividend these next 4 days, listed following, with ex-dividend date and yield shown. Assume dividends are paid quarterly unless otherwise noted.

Chimera (CIM), 12/29/2020, 11.29%.

MFA Financial (MFA), 12/29/2020, 7.46%.

Covanta Holding (CVA), 12/30/2020, 2.47%.

AGNC Investment (AGNC), 12/30/2020, 9.19%. AGNC pays monthly.

Yamana Gold (AUY), 12/30/2020, 1.84%.

Algonquin Power (AQN), 12/30/2020, 3.84%.

Ladder Capital (LADR), 12/30/2020, 8.14%.

Spirit Realty Capital (SRC), 12/30/2020, 6.31%.

STAG Industrial (STAG), 12/30/2020, 4.68%. STAG pays monthly.

Owl Rock Capital (ORCC), 12/30/2020, 9.53%.

Prospect Capital (PSEC), 12/30/2020, 13.19%. PSEC pays monthly.

Total SE (TOT), 12/30/2020, 6.96%. Note that the yield is before foreign tax withholding of 30% or so.

Annaly Capital Management (NLY), 12/30/2020, 10.74%.

BGS Foods (BGS), 12/30/2020, 6.15%.

Nucor (NUE), 12/31/2020, 3.08%.

Realty Income (O), 12/31/2020, 4.65%. O pays monthly.

Ventas (VTR), 12/31/2020, 3.67%.

None of the 15 CEFs I follow will be going ex-dividend next week.

Also, none of my stocks will be reporting next week.

As usual this time of year, upgrades/downgrades, etc. were minimal last week. The few regarding my stocks were as follows, per E*Trade, my source for this information. 

Welltower (WELL) was upgraded from Neutral to OverWeight at JP Morgan.

STAG Industrial (STAG) was downgraded from OverWeight to Neutral at JP Morgan.

Alliant Energy (LNT) was initiated at Market Perform at BMO Capital.

Royal Dutch Shell (RDS.B) was initiated at Buy at MKM Partners.  

Unless things improve on the political front, stocks may tumble next week. It would be a fitting end to a chaotic year. On the other hand, if things can get worked out in D.C., we could see a relief rally. Either way, the immediate future will likely see things get worse before they get better, hopefully in the next 3 to 5 months. I recommend not holding your breath while waiting for said improvement. My recommendation is to husband capital and wait for better buy prices, I believe they will be coming soon.

JT