JT’s DAILY (WEEKLY as of 12/9/2013) BLOG for Month Of June 2019
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 06/24/2019
Posted Sunday 06/23/2019 07:00 AM
Another impressive week of gains on all the major averages, as investors and traders defy the pundits predicting a collapse. The perverse logic seems to be that with the economic numbers indicating a slowdown, further Fed tightening is off the table, and in fact easing of monetary policy is more likely than further tightening. Whether correct or not, it doesn’t seem to matter, it’s the blind faith in the Fed that rules.
I wouldn’t characterize it as blind faith, but I do have more faith in dividend-paying stocks than in most other investment choices. Following are the stocks on my lists going ex-dividend next week. Frequency is quarterly unless otherwise stated.
AGNC Investment (AGNC), 6/27/2019, yield 11.40%. AGNC pays monthly.
Covanta Holding (CVA) 6/27/2019, yield 5.49%.
Park Hotels Resorts (PK), 6/27/2019, yield 6.34%.
Spirit Realty Capital (SRC), 6/27/2019, yield 5.54%.
Enerplus (ERF), 6/27/2019, yield 1.20%. ERF pays monthly.
Main Street Capital (MAIN), 6/27/2019, yield 5.99%. MAIN pays monthly.
Stag Industrial (STAG), 6/27/2019, yield 4.53%. STAG pays monthly.
Prospect Capital (PSEC), 6/27/2019, yield 10.96%. PSEC pays monthly.
Chimera Investment (CIM), 6/27/2019, yield 10.45%.
Annaly Capital Management (NLY), 6/27/2019, yield 12.40%.
Pattern Energy Group (PEGI), 6/27/2019, yield 7.16%.
Nucor (NUE), 6/27/2019, yield 2.97%.
National Health Investors (NHI), 6/27/2019, yield 5.17%.
BGS Foods (BGS), 6/27/2019, yield 8.66%.
Ventas (VTR), 6/28/2019, yield 4.42%.
Realty Income (O), 6/28/2019, yield 3.71%. O pays monthly.
General Electric (GE), 6/28/2019, yield 0.36%. GE pays a miserly penny per quarter. Why bother, is my reaction? This was at one time a “widows and orphans” stock. Unbelievable!
MFA Financial (MFA), 6/28/2019, yield 11.10%.
Kimco Realty (KIM), 7/1/2019, yield 5.85%.
One dividend I missed last week was Altria (MO), ex-dividend on 6/13/2019, yielding 6.37%.
Two of my stocks will be reporting next week, both on 6/26/2019. General Mills (GIS) and Paychex (PAYX).
Of my 15 CEFs, one will be going ex-dividend on Monday, 7/1/2019. The CEF is First Trust Intermediate Duration Preferred & Income Fund (FPF), yielding 7.48% as of last week’s closing price. FPF pays monthly.
Analyst actions regarding my stocks noted by E*TRADE last week were as follows:
Kinder Morgan (KMI) was downgraded from Buy to Hold at Stifel.
GlaxoSmithKline (GSK) was initiated at UnderWeight at Morgan Stanley. GSK has long been the highest-yielding Pharma stock. It remains on my Tier2 list, but I believe all pharma stocks have two major risk factors – dependence on the government and potential technological obsolescence.
Hershey Co (HSY) was reiterated at Buy at Bank of America.
Kimberly Clark (KMB) was reiterated at Neutral at Bank of America.
Roche Holdings LTD (RHHBY) was upgraded from Hold to Buy at Deutsche Bank.
Ventas (VTR) was upgraded from UnderPerform to InLine at Evercore ISI, from Hold to Buy at Stifel, and from Neutral to Buy at Citigroup. It must be time to sell, if all these firms say to buy! More on this later.
Hershey Co (HSY) was downgraded from Neutral to UnderWeight at Piper Jaffray.
Roche Holdings LTD (RHHBY) was downgraded from Buy to Hold at Liberum.
Darden Restaurants (DRI) was reiterated at Buy at Maxim Group.
The optimistic mood held on until the end of the week, when the specter of war with Iran became a serious possibility after they shot down an unarmed US surveillance drone. While the President wisely held off on an immediate retaliation, if further incidents occur, that restraint is unlikely to recur.
Regarding Ventas (VTR), I had been eyeing this position for some time as a potential sale, based on the price having been run up over the past few weeks. I had planned on holding off until after the next dividend, but a price spike of nearly four dollars on Thursday forced my hand. I suspected it wouldn’t hold, at least not entirely. Just in case I was wrong, I went in with a stop loss order slightly below where it was trading at mid-morning Thursday. It subsequently dropped over three dollars, but I was taken out by the order right away, missing most of the decline. Over the short term, it appears my strategy was the right one, allowing me to exit with a nice gain, including most of the Thursday morning price spike. I would not be surprised if the market has the last laugh, with the stock heading back up by the time it goes ex-dividend on 6/28/2019. But my motto is, “when the market gives you an unexpected gift, take it”! So that is what I did.
1st Posting for Week Beginning Monday 06/17/2019
Posted Sunday 06/16/2019 08:00 AM
While not nearly as impressive as last week, the market managed to eke out a modest gain for the week, based on the major stock averages I track. There were no dramatic moves in either direction, as stocks seemed to be just marking time. Geopolitical news dominated, as the war in D.C. continues, Iran continues to cause trouble, and Hong Kong’s fragile (partial) independence from China is threatened by new legislation that effectively would end the relative freedom enjoyed by the residents of the “Special Administrative Region”.
Stocks on my lists going ex-dividend next week are as follows. Frequency is quarterly unless otherwise stated.
Main Street Capital (MAIN), 6/17/2019, yield 5.92%. MAIN pays monthly.
Greif (GEF), 6/17/2019, yield 4.89%.
BlackRock Capital Investment (BKCC), 6/17/2019, yield 11.56%.
Gladstone Investment (GAIN), 6/18/2019, yield 6.99%. GAIN pays monthly.
Horizon Technology Finance (HRZN), 6/19/2019, yield 10.20%. HRZN also pays monthly.
Apollo Investment (AINV), 6/19/2019, yield 11.00%.
Solar Capital Limited (SLRC), 6/19/2019, yield 7.90%.
Phillip Morris International (PM), 6/20/2019, yield 5.88%.
I missed two of my stocks that went ex-dividend last week. These were:
Monroe Capital (MRCC), 6/13/2019, yield 12.12%.
PennantPark Investment (PNNT), 6/14/2019, yield 11.36%.
Five of the fifteen CEFs I follow will be going ex-dividend next week as well.
Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 6/20/2019, yield 8.53%.
Cohen & Steers MLP Income & Energy Opportunity Fund (MIE), 6/18/2019, yield 9.69%.
Cohen & Steers Quality Income Realty Fund (RQI), 6/18/2019, yield 6.83%.
CBRE Clarion Global Real Estate Income Fund (IGR), 6/20/2019, yield 7.94%.
Miller Howard High Income Equity Fund (HIE), 6/20/2019, yield 12.52%.
One of my stocks is scheduled to report next week, Darden Restaurants (DRI) on 6/20/1019.
Analyst actions regarding my stocks noted by E*TRADE last week were as follows.
Ensco Rowan PLC (ESV) and Transocean LTD (RIG) were initiated at UnderPerform and Neutral, respectively, at Bank of America.
Cisco Systems (CSCO) was downgraded from OutPerform to Market Perform at Blair.
B&G Foods (BGS), General Mills (GIS), and Hershey (HSY) were all initiated at InLine at Evercore ISI, while Darden Restaurants (DRI) was initiated at OutPerform by the ratings firm.
HCP Inc (HCP) was upgraded from Market Perform to OutPerform at Raymond James.
Plains All American Pipeline (PAA) was upgraded from Peer Perform to OutPerform at Wolfe Research.
Enbridge (ENB) was downgraded from OutPerform to Peer Perform at Wolfe Research.
Darden Restaurants (DRI) was reiterated at Buy at Maxim Group.
Transocean LTD (RIG) was downgraded from Buy to Neutral at Citigroup.
Last week was somewhat uneventful as far as the markets were concerned. But underneath the surface, there seems to be a degree of nervousness, as a number of issues are pending that could easily roil the markets if things go south in a big way. With most stocks bid up to full value and beyond, cash is a good place to be for a generous portion of one’s capital. Better buys may be available soon. One exception to the premise that stocks are bid up too high is Greif (GEF) the international packaging firm, which goes ex-dividend Monday. GEF was in the $50-$60 range from late in 2016 until late in 2018, and is now available at $35 or so, delivering a yield close to 5%. I’ve owned it off and on for years, and wrote an article on Seeking Alpha several years ago touting the stock. I still believe it is a solid firm, and will be a good long-term holding, which is now available for a reasonable price.
1st Posting for Week Beginning Monday 06/10/2019
Posted Sunday 06/09/2019 06:00 AM
Surprise, surprise, just when it looked like we were getting ready to revisit the December lows, the market did a U-turn, advancing every day last week. Go figure. The catalyst for this turn of events seems to be that with the economic data pointing to a slowdown in the economy, the expectation is that the Fed will change course and revert to loosening monetary policies instead of tightening them, thus juicing the market. Regardless of whether or not true, it underscores the extent to which market followers believe the Fed “has their back”.
As for me, I believe my dividend payers “have my back”. Stocks on my lists going ex-dividend next week are as follows. Frequency is quarterly unless otherwise stated.
Medical Properties Trust (MPW), 6/12/2019, yield 5.46%.
Ares Capital (ARCC), 6/13/2019, yield 8.94%.
Washington Real Estate Investment Trust (WRE), 6/13/2019, yield 4.36%.
Crown Castle International (CCI), 6/13/2019, yield 3.33%.
Digital Realty Trust (DLR), 6/13/2019, yield 374%.
Coca Cola (KO), 6/13/2019, yield 3.11%.
Altria (MO), 6/13/2019, yield 6.31%.
PennantPark Investment (PNNT), 6/14/2019, yield 10.99%.
Iron Mountain (IRM), 6/14/2019, yield 7.87%.
Merck (MRK), 6/14/2019, yield 2.70%.
Main Street Capital (MAIN), 6/17/2019, yield 6.04%. MAIN pays monthly.
Greif (GEF), 6/17/2019, yield 5.18%.
BlackRock Capital Investment (BKCC), 6/17/2019, yield 11.69%.
Eight of the fifteen CEFs I follow will be going ex-dividend as well, and probably a ninth, although the announcement has not yet occurred.
BlackRock Debt Strategies Fund (DSU), 6/13/2019, yield 7.71%. DSU pays monthly.
Dividend and Income Fund (DNI), 6/14/2019, yield 7.01%.
Nuveen Dow 30 Dynamic Overwrite Fund (DIAX), 6/13/2019, yield 7.00%.
BlackRock Enhanced Equity Dividend Trust (BDJ), 6/13/2019, yield 6.57%. BDJ pays monthly.
Nuveen Real Asset Income and Growth Fund (JRI), 6/13/2019, yield 7.78%. JRI pays monthly.
Gabelli Utility Trust (GUT), 6/13/2019, yield 8.52%. GUT pays monthly.
Gabelli Dividend and Income Trust (GDV), 6/13/2019, yield 6.34%. GDV pays monthly.
BlackRock Energy and Resources Trust (BGR), 6/13/2019, yield 8.28%. BGR pays monthly.
CBRE Clarion Global Real Estate Income Fund (IGR) pays monthly, and will likely go ex-dividend next week or the following Monday. IGR yields 8.12%.
Analyst actions regarding my stocks noted by E*TRADE last week were as follows.
Royal Dutch Shell (RDS.B) was reiterated at OutPerform at Cowen & Co.
Pfizer (PFE) was initiated at OverWeight at Morgan Stanley.
Nucor (NUE) was reiterated at Buy at Goldman.
Spirit Realty Capital (SRC) was reiterated at Neutral at JP Morgan.
American Electric Power (AEP), Duke Energy (DUK), and Public Service Enterprise Group (PEG) were all initiated at Sector Weight at KeyBanc.
NextEra Energy (NEE) was initiated at OverWeight at KeyBanc.
Digital Realty Trust (DLR) was upgraded from Market Perform to OutPerform at Raymond James.
Exelon (EXC) was upgraded from Neutral to Buy at Goldman.
I was expecting to make some acquisitions at the outset last week, as a couple of stocks I was watching were close to buy territory. The candidates were (and still are) Pattern Energy (PEGI) and Spirit Capital (SRC). Both will go ex-dividend 6/27/2019. I already own both, but would like to add to my holdings. Most stocks I would be interested in have been bid up too high at the moment. The rally of last week is probably going to run out of steam, but who knows? The answer is no one. The way to deal with it is to have a plan if stocks go up, a plan if stocks go down, and a third plan if they just churn in place.
1st Posting for Week Beginning Monday 06/03/2019
Posted Sunday 06/02/2019 06:00 AM
The market went from a yoyo to a toboggan run last week, as investors exhibited nervousness about a host of issues that seem to be getting worse every day. While there is no shortage of pundits predicting doom, one Seeking Alpha contributor has a contrary take, that savvy investors should take advantage of the recent decline to acquire quality stocks at better prices than seen in a while. Further, he notes that an excess of bearishness is more indicative of market bottoms than tops.
Regardless of the raging storms, my dividend payers just keep on paying. Stocks on my lists going ex-dividend next week are as follows:
Gladstone Investment (GAIN), 6/4/2019, yield 7.09%. GAIN pays monthly.
Newmont Mining (NEM), 6/5/2019, yield 1.75%.
Williams Co (WMB), 6/6/2019, yield 5.71%.
PotlatchDeltic (PCH), 6/6/2019, yield 4.69%.
Public Service Enterprise Group (PEG), 6/6/2019, yield 3.20%.
Pepsico (PEP), 6/6/2019, yield 2.97%.
Kimberly Clark (KMB), 6/6/2019, yield 3.16%.
Vodafone (VOD), 6/6/2019, yield 10.44%. VOD pays semi-annually
Total S A (TOT), 6/7/2019, yield 5.59%.
Two of the fifteen CEFs I follow will be going ex-dividend also:
First Trust Intermediate Duration Preferred & Income Fund (FPF), 6/3/2019, yield 7.59%. FPF pays monthly.
AllianceBernstein Global High Income Fund (AWF), 6/3/2019, yield 7.10%. AWF pays monthly.
Two of my stocks will be reporting next week, Greif (GEF) on 6/5/2019, and JM Smucker Co (SJM) on 6/6/2019.
Upgrades/downgrades etc. coming out last week on my stocks were as follows:
Kimco Realty (KIM) was downgraded from OutPerform to Market Perform at Raymond James.
Merck (MRK) was initiated at Neutral at Goldman.
Johnson and Johnson (JNJ) was initiated at Buy at Goldman.
General Mills (GIS) was downgraded from Neutral to Sell at Goldman.
Royal Dutch Shell (RDS.B) was upgraded from Hold to Buy at Societe Generale.
Nucor (NUE) was downgraded from Buy to Hold at Deutsche Bank.
Verizon (VZ) was downgraded from Buy to Neutral at UBS.
Enterprise Products Partners LP (EPD) was initiated at Buy at JohnsonRice.
Magellan Midstream Partners LP (MMP) was initiated at accumulate at JohnsonRice.
Kraft Heinz (KHC) was reiterated at UnderPerform at Credit Suisse.
Kraft Heinz (KHC) was upgraded from UnderWeight to Neutral at Piper Jaffray.
Royal Dutch Shell (RDS.B) was upgraded from Hold to Buy at Societe Generale.
Nucor (NUE) was downgraded from Buy to UnderPerform at Bank of America.
I had a low-ball order in to add to my position in Royal Dutch Shell (RDS.B) that I had forgotten about, and I’ll be darned if it didn’t execute Friday. So I did take advantage of the decline. With a near 6% yield, and no foreign tax withholding as long as you buy the “B” shares, RDS.B has long been my favorite oil major. As always, I have a watch list of buys, and I will likely be pulling the trigger a few more times this summer. I don’t let the ex-dividend date have an undue influence on my buys, but all things considered, I’d rather be getting paid sooner rather than later after I invest. With the market decline showing no signs of reversing anytime soon, I’m holding off on several until we get closer to their respective ex-dividend dates. Target stocks are Spirit Realty (SRC), Pattern Energy (PEGI), Enterprise Products Partners LP (EPD), Plains All American Pipeline LP (PAA), and Magellan Midstream Partners LP (MMP). I’m also planning to add to my CEF holdings. I plan to do a complete review of CEFs and publish an article on Seeking Alpha on my findings and recommendations, but I probably won’t get this done until August or later.
1st Posting for Week Beginning Monday 05/27/2019
Posted Sunday 05/26/2019 07:00 AM
The yoyo market continued last week, with three down days and two up days, but the trend to the downside continued, as the downs outdistanced the ups for the week. The vitriol in D.C. also continued last week, as momentum seems to be growing for an investigation into how the conspiracy began to take down a duly-elected President that the Federal bureaucracy, the news media, and the global elitists hated. Meanwhile, nothing is being done about our numerous pressing national problems. Unfortunately, it is unlikely that anything will change until after the 2020 Presidential election.
As the political storms rage, my dividend stocks continue to pay out. Stocks on my lists scheduled to go ex-dividend this coming week are as follows:
AGNC Investment (AGNC), 5/30/2019, yield 11.27%. AGNC pays monthly.
Kraft Heinz Co (KHC), 5/30/2019, yield 5.09%.
STAG Industrial (STAG), 5/30/2019, yield 4.82%. STAG also pays monthly.
Prospect Capital (PSEC), 5/30/2019, yield 10.65%. PSEC is another monthly payer.
Realty Income (O), 5/31/2019, yield 3.84%. O is the most famous monthly payer of all, referring to itself as “the monthly dividend company”. The yield is severely depressed, compared to historical levels, because the popularity of O has resulted in an extended stock price.
Safety Insurance Group (SAFT), 5/31/2019, yield 3.42%.
Kellogg (K), 5/31/2019, yield 3.92%.
Century Link (CTL), 5/31/2019, yield 10.35%. CTL still presents a very attractive yield, even after the recent dividend cut. Unfortunately, it is because the stock price has adjusted down substantially in response to the dividend reduction. CTL remains on my Tier3 list for now. It is probably a reasonable speculation at today’s price. Long-term holders are likely underwater, even with cumulative dividends included, unless they have been collecting for a very long time.
McDonalds (MCD), 5/31/2019, yield 2.33%. This stock continues to outperform, confirming that it is hard to fail when betting on Americans making terrible food choices, especially when offered at cheap prices.
NextEra Energy (NEE), 5/31/2019, yield 2.46%. NEE is no doubt a blue-chip utility, but the anemic yield is especially disappointing, considering it is a utility.
Washington Prime Group (WPG), 5/31/2019, yield 22.42%. You read that right, yield is over 20%. I have moved WPG to Tier4, even though the dividend continues, at least for a while longer. I have a small position, which I don’t plan to sell anytime soon, but in good conscience, I cannot recommend a 20% yielder, even as a speculation. A 20% yield lasting more than a cycle or two is definitely defying gravity, in a Wile E. Coyote cartoon fashion.
Only one of my stocks will be reporting this week, Hoegh LNG Partners LP (HMLP), on 5/29/2019.
Upgrades / downgrades and such that came out last week regarding stocks on my lists, at least those that I noticed, are as shown below. Note that my only resource these days for this section is ETrade, which provides a convenient format. MarketWatch never did provide the prior rating for upgrades and downgrades, and lately no longer provides the rating firm, so I have discontinued relying on this source. My Fidelity account provides all ratings available from several research firm, but the list is ALL current ratings, not just NEW ratings. As you might guess, the list generated is voluminous, and essentially worthless for my purpose. So basically, my list is mostly limited to the new ratings indicated by ETrade, occasionally augmented by a rating change on one of my stocks I have come across from a news source.
Crown Castle (CCI) was reiterated at OverWeight at Morgan Stanley.
Mid-America Apartment Communities (MAA) was reiterated at OutPerform at RBC Capital Markets.
Nucor (NUE) was reiterated at OverWeight at KeyBanc.
Phillip Morris (PM) was upgraded from UnderWeight to Equal Weight at Barclays.
Century Link (CTL) was upgraded from Sell to Neutral at Guggenheim.
Newmont Mining (NEM) was upgraded from Neutral to Buy at Citigroup. Barrick Gold (GOLD) was downgraded from Buy to Neutral at Citigroup.
Vodafone (VOD) was upgraded from Hold to Buy at HSBC Securities.
As we progress from spring into summer, the discord in our politics and our economy shows no sign of calming anytime soon. My personal view is that we are likely on the cusp of a major shake-up from the status quo on both fronts, political and economic, which are effectively the same front, since these two spheres intertwine completely. As a retired person seeking income from my investments, I look upon the current situation with a degree of anxiety. My current thinking is to NOT be 100% invested, but rather to maintain a cash cushion (now approaching 40%) to be in a position to take advantage of opportunities that may open up as events unfold. Thus, I am willing to forego some current income in order to retain flexibility. In addition, I am well-diversified, holding to my rules regarding concentration in any one security (no more than 5%, mostly 1% to 2%), and any one sector (20% max). I am also diversified by brokerage accounts, with four IRA accounts and three non-IRA accounts. I realize this level of account diversity is not for everyone, but I do recommend not being limited to just one, or even two. Some of Bernie Madoff’s clients would have been well served by not having everything with Madoff. I remember during the 2008 financial crises, some were predicting the demise of Etrade, which had some housing exposure with Etrade Bank. Even with the protection offered by the SIPC, if your brokerage becomes insolvent, your recovery may be limited, and definitely will not happen quickly. Another admonition is to monitor your holdings constantly, especially if it looks like “the wheels are starting to come off” of the economy. You don’t want to be NOT paying attention when opportunity or disaster, often both presented by the same event, strikes.