Stocks fell on Monday, as the steepest drop of 2021 occurred, but then the major averages recovered it all plus a bit more over the next four days, to end the week ahead of the prior week. To emphasize the point, the headline Dow Industrial’s Index closed above 35000 for the first time ever. With the Fed stoking the economy’s boilers like never before, the current bull run continues. While fun while it lasts, economist John Mauldin’s latest “Thoughts from the Frontline” article makes for sobering reading, considering how it all may end. (Hint: not well.)

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

Prospect Capital (PSEC), 7/27/2021, 8.74%. PSEC pays monthly.

Main Street Capital (MAIN), 7/28/2021, 5.95%. MAIN also pays monthly.

AGNC Investment (AGNC), 7/29/2021, 8.89%. You guessed it, AGNC is another monthly payer.

Enterprise Products Partners LP (EPD), 7/29/2021, 7.65%.

Tanger Factory Outlet Centers (SKT), 7/29/2021, 4.01%. SKT has restarted paying a dividend since Covid, but remains on my Tier4 list for now.

STAG Industrial (STAG), 7/29/2021, 3.66%. This monthly-paying industrial REIT is seriously over-loved, as evidenced by the sub-4% yield, with the share price, in excess of $40, reflecting all-time highs.

Pfizer (PFE), 7/29/2021, 3.76%.

Alliant Energy (LNT), 7/29/2021, 2.80%.

ONEOK (OKE), 7/30/2021, 7.06%. Note that OKE is now a C-Corp, not an MLP.

Realty Income (O), 7/30/2021, 4.04%. This monthly-paying REIT is the poster child for an over-loved dividend stock, although the stock price, barely over $70, is still less than its pre-Covid highs, in excess of $80.

Kinder Morgan (KMI), 7/30/2021, 6.22%. KMI is definitely NOT over-loved by investors.

Paychex (PAYX), 7/30/2021, 2.38%.

Omega Healthcare Investors (OHI), 7/30/2021, 7.23%.

Only one of the sixteen CEFs I follow will be going ex-dividend in my look-ahead period, which includes August 2^nd. First Trust Intermediate Duration Preferred & Income Fund (FPF) will go ex-dividend 8/2/2021. This monthly-paying CEF currently yields 6.06%.

As we move deeper into earnings season, a number of firms I track will be reporting next week. They are listed following by reporting date.

7/26/2021

AGNC Investment (AGNC), PotlatchDeltic (PCH).

7/27/2021

3M Co (MMM), Crestwood Equity Partners LP (CEQP), General Electric (GE), Oxford Square Capital (OXSQ), Horizon Technology Finance (HRZN), United Parcel Service (UPS), STAG Industrial (STAG).

7/28/2021

Automatic Data Processing (ADP), Getty Realty (GTY), GlaxoSmithKline (GSK), Rio Tinto PLC (RIO), Vici Properties (VICI), Ares Capital (ARCC), Enterprise Products Partners LP (EPD), Pfizer (PFE), McDonalds (MCD), Annaly Capital Management (NLY), Mid-America Apartment Communities (MAA). Altria (MO),

7/29/2021

Altria (MO), Hershey Co (HSY), Kimco Realty (KIM), Magellan Midstream Partners LP (MMP), Medical Properties Trust (MPW), Royal Dutch Shell (RDS.B), Sanofi (SNY), Southern Co (SO), Digital Realty Trust (DLR), Hercules Capital (HTGC), Washington Real Estate Investment Trust (WRE), Welltower (WELL).

7/30/2021

Chevron (CVX), Colgate Palmolive (CL), Enbridge (ENB), Exxon Mobil (XOM), Procter & Gamble Co (PG), Eni S p A (E).

While nearly everyone agrees stocks are over-priced currently, the bull market keeps on going, with short-term setbacks ultimately being regained with interest. By interest, I mean the decline is regained, and more. That is about the only interest available these days. It will all end in a major decline someday, but no one knows when that day will come, least of all yours truly. Take advantage to get the best prices available in some time for your laggards, but don’t panic and sell everything, especially top dividend payers. The present situation may persist far longer than anyone thinks possible right now.

JT

Stocks mostly churned in place last week until Friday, when the market sold off enough to put all of the major averages I track into a loss for the week. It was not a huge decline, but more of a profit-taking selloff, underlining that many investors have concluded that it is time to take some money “off the table”.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

Colgate Palmolive (CL), 7/20/2021, 2.13%.

Gladstone Investment (GAIN), 7/12/2021, 5.81%. GAIN is a monthly payer.

Procter and Gamble (PG), 7/22/2021, 2.48%.

Texas Instruments (TXN), 7/23/2021, 2.19%.

That’s it, just four stocks. With the exception of the BDC (GAIN), the yields are nothing to get excited about, reflecting that the share prices of most quality stocks have outstripped their dividends.

Three of the sixteen CEFs I track will also be going ex-dividend next week. All are monthly payers.

Clarion Global Real Estate Income Fund (IGR), 7/19/2021, 6.63%.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 7/22/2021, 7.13%.

Miller Howard High Income Equity Fund (HIE), 7/22/2021, 5.67%.

Cohen & Steers MLP Income & Energy Opportunity Fund (MIE) is being liquidated. The last monthly dividend was the June dividend. MIE illustrates that a sector CEF in a disastrous sector is a poor investment, as the diversification into multiple firms is of minimal benefit when they are all collapsing.

Earnings season is here, and a number of firms I track will be reporting next week. They are listed as follows, by reporting date.

7/20/2021

Phillip Morris (PM)

7/21/2021

Coca Cola (KO), Johnson & Johnson (JNJ), Verizon (VZ), Crown Castle International (CCI), Innovative Industrial Properties (IIPR), Kinder Morgan (KMI), Texas Instruments (TXN).

7/22/2021

American Electric Power (AEP), AT&T (T), Freeport-McMoRan (FCX), Newmont (NEM), Nucor (NUE), Intel (INTC).

7/23/2021

Kimberly Clark (KMB), NextEra Energy (NEE).

The market remains substantially over-valued at this time, but the near-term direction is anybody’s guess. The famous quote from economist John Maynard Keynes has never been more applicable: “the markets can remain irrational longer than you can remain solvent”. Many a short-seller who ignored these words of wisdom has been carried out on a stretcher! I would not recommend shorting this market, but I do recommend taking profits while available. That is what I’m doing.

JT

Last week was an up and down week for stocks, but a strong advance on Friday salvaged the week, at least if you are long, as most of the averages I track ended the week with a small gain. Employment and supply bottlenecks continue to plague the recovery, but the markets are apparently not ready to decline, at least not yet.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

Mid-America Apartment Communities (MAA), 7/14/2021, 2.31%.

Freeport-McMoRan (FCX), 7/14/2021, 0.82%.

Oxford Square Capital (OXSQ), 7/15/2021, 8.48%. OXSQ pays monthly.

PennantPark Floating Rate Capital (PFLT), 7/16/2021, 8.66%. PFLT is also a monthly payer.

Horizon Technology Finance (HRZN), 7/19/2021, 6.91%. HRZN is another monthly payer.

Seven of the sixteen CEFs I follow will be going ex-dividend in the week ahead. All are monthly payers.

Cohen & Steers Quality Income Realty Fund (RQI), 7/13/2021, 6.02%.

BlackRock Debt Strategies Fund (DSU), 7/14/2021, 6.72%.

BlackRock Energy and Resources Trust (BGR), 7/14/2021, 5.07%.

BlackRock Enhanced Equity Dividend Trust (BDJ), 7/14/2021, 6.08%.

Nuveen Real Asset Income and Growth Fund (JRI), 7/14/2021, 7.17%.

Gabelli Dividend & Income Trust (GDV), 7/15/2021, 5.02%.

Gabelli Utility Trust (GUT), 7/15/2021, 7.62%.

Two CEFs that I have been following both pay monthly, but a dividend for July has not yet been announced. Cohen & Steers MLP Income & Energy Opportunity Fund (MIE) may be re-organizing. MIE is an MLP fund, and between the Covid bust and the MLP collapse, it declined 80% or so in 2020. Even after doubling since the Covid lows, it is still a distressed fund. MIE is a poster child of how a sector fund can only diversify against loss from a bad stock in a sector, not against a collapse of the entire sector. The other fund, Clarion Global Real Estate Income Fund (IGR), is not under any such stress as MIE, as far as I know, and may just be late in announcing.

Only one of my stocks will be reporting next week, Pepsico (PEP), on 7/13/2021.

The state of the market currently is one of severe over-valuation, with the strongest, most solid firms being the most over-valued. Blue-chip yields are minimal, with many once-respectable yielding stocks having completely outgrown (in terms of stock price) their dividends. Now is definitely a challenging time for a dividend investor. My advice is to await better entry prices in most cases.

JT

Last week was comprised of the final three days of June and the first two days of July, and was capped on Friday with the closely-watched monthly employment report. The report was generally positive, with an improving labor market, but the economic recovery progress is less than ideal, with bottlenecks of both materials and labor preventing a more robust recovery. Stocks continued to rise overall, making weekly gains two weeks in a row since the big drop on Friday, June 18. But the rate of advance has clearly slowed down during this second positive week, compared to the prior week. 

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

Verizon (VZ), 7/08/2021, 4.46%.

AT&T (T), 7/08/2021, 7.15%. Note that the much-discussed dividend cut for T has not yet occurred, but the eventual yield after all is said and done is expected to be in the 4% range.

General Mills (GIS), 7/08/2021, 3.39%.

Universal (UVV), 7/9/2021, 5.45%.

Only one of the sixteen CEFs I follow will be going ex-dividend in the week ahead, PIMCO Corporate & Income Opportunity Fund (PTY), 7/09/2021, yield 7.85%. PTY pays monthly.

One of my stocks will be reporting next week, Innovative Industrial Properties (IIPR), on 7/07/2021. IIPR is a specialty REIT, added to my Tier2 list a couple of months ago. Unfortunately, with a yield under 3% and a stock price close to $200, it is not recommended for purchase at this level.

It appears at this juncture that next week will be a slow, holiday-shortened week, as we approach the mid-point of summer. But of course, that prediction could be wrong. Right now, with nearly all stocks over-priced by any reasonable yardstick, and the major averages posting new highs regularly, I’m reviewing what I might want to sell, not what I might want to buy. Other than a possible short-term capital gain and/or a minor dividend payment, my belief is that buying at these levels will lead to losses, not gains. Pity the poor fund manager faced with how to deploy a ton of new money flowing in, in this market. Fortunately, in my case, I don’t have these worries. True, cash is slowly losing value in our current Fed-induced inflationary environment, but that “slow-bleed” is preferable to a “fast-bleed” that is likely to be experienced by making large investments at today’s inflated prices, with a correction or worse likely within the next few months.

JT

Monday, stocks regained all of the losses of the previous Friday, effectively ending the downturn some pundits believed had arrived. The next two days were spent marking time, but then the market posted nice gains the final two days of the week. As the week ended, all of the major averages I follow were at or above the highs reached around June 10, which is to say the market is flirting once again with new all-time highs, with most issues as over-valued as ever.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated. Since next week covers the end of June and the beginning of July, the list is a bit longer than most weeks.

Main Street Capital (MAIN), 6/28/2021, 5.84%. MAIN is a monthly payer.

AGNC Investment (AGNC), 6/29/2021, 8.40%. AGNC is also a monthly payer.

Ladder Capital (LADR), 6/29/2021, 6.65%.

Innovative Industrial Properties (IIPR), 6/29/2021, 2.87%.

Spirit Realty Capital (SRC), 6/29/2021, 5.19%.

STAG Industrial (STAG), 6/29/2021, 3.84%. STAG pays monthly.

Americold Realty Trust (COLD), 6/29/2021, 2.25%.

Algonquin Power & Utilities (AQN), 6/29/2021, 4.46%.

Goldman Sachs BDC (GSBD), 6/29/2021, 8.85%.

B&G Foods (BGS), 6/29/2021, 5.66%.

Chimera Investment (CIM), 6/29/2021, 8.49%.

Annaly Capital Management (NLY), 6/29/2021, 9.57%.

MFA Financial (MFA), 6/29/2021, 8.21%.

National Health Investors (NHI), 6/29/2021, 5.23%.

Nucor (NUE), 6/29/2021, 1.68%.

Owl Rock Capital (ORCC), 6/29/2021, 8.44%.

Ventas (VTR), 6/30/2021, 3.11%.

Realty Income (O), 6/30/2021, 4.22%. O pays monthly.

Cisco Systems (CSCO), 7/2/2021, 2.79%.

Two of the sixteen CEFs I follow will be going ex-dividend in the week ahead. Both are monthly payers.

First Trust Intermediate Duration Preferred & Income Fund (FPF), 7/1/2021, 6.16%.

AllianceBernstein Global High Income Fund (AWF), 7/1/2021, 6.31%.

One of my stocks will be reporting next week, General Mills (GIS) on 6/30/2021.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Rio Tinto PLC (RIO) was downgraded from Neutral to Sell by UBS.

Royal Dutch Shell (RDS.B) was upgraded from Hold to Buy at Societe Generale.  

Welltower (WELL) was upgraded from Sector UnderPerform to Sector Perform at Scotiabank.

McDonalds (MCD) was reiterated at OverWeight at Wells Fargo.

GlaxoSmithKline PLC (GSK) was upgraded from Sell to Hold at Deutsche Bank.

Colgate Palmolive Co (CL) was initiated at Buy at UBS.

Kimberly-Clark (KMB) and Procter and Gamble (PG) were both initiated at Neutral at UBS.

Oaktree Specialty Lending (OCSL) was initiated at OutPerform at Oppenheimer.

Well, what a difference a week can make. I have now shifted to reviewing my positions, to see if there are any further sell opportunities, and as for possible new buys, “forgeddaboutit”. At least, not until a 10% correction occurs.

JT

Stocks broke out to the downside last week, with Friday logging the largest daily decline seen in some time for the Dow Industrials, the index most followed by the general public, unrepresentative though it is. Before we overreact to a 500 point down day for the Dow, keep in mind it is down just 5% from the peak set 5/10/2021, and two more representative averages, the S&P 500 and the NASDAQ, are only down 2% and 1%, respectively, from their peaks, set just a few days ago, 6/15/2021 and 6/17/2021. This may be the start of an expected correction of 5% to 10%, or maybe not. Even if it is, many if not most stocks will still be over-valued at that point.

Stocks on my lists going ex-dividend in the week ahead are listed following. The date and current yield, based on Friday’s close, are indicated. Assume the dividend is paid quarterly unless otherwise indicated.

SLR Investment (SLRC), 6/22/2021, 8.55%.

Washington Real Estate Investment Trust (WRE), 6/22/2021, 5.10%.

VICI Properties (VICI), 6/23/2021, 4.08%.

Getty Realty (GTY), 6/23/2021, 4.67%.

Coventa Holdings (CVA), 6/23/2021, 1.87%. CVA is on my Tier4 list, no longer recommended. While not in dire straits, the low yield made CVA no longer worth owning, in my opinion.

Phillip Morris International (PM), 6/24/2021, 4.80%.

Vodafone Group PLC (VOD), 6/24/2021, 5.72%. VOD pays semi-annually. It is on my Tier4 list, no longer recommended. While the yield is enticing, the outlook for any telecoms not named Verizon or AT&T has dimmed.  

Prospect Capital (PSEC), 6/25/2021, 8.25%. PSEC pays monthly.

TotalEnergies SE (TTFNF), 6/25/2021, 6.18%. Formerly Total Petroleum (TOT), this major oil company based in France apparently is attempting to reinvent itself. All things considered, particularly the 30% or so foreign tax withholding experienced by US holders, this firm is not likely to remain recommended after my next review of my lists.

Main Street Capital (MAIN), 6/28/2021, 5.91%.

Two of the sixteen CEFs I follow will be going ex-dividend in the next week, as indicated following. Both are monthly payers.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 6/22/2021, 7.13%.

Miller Howard High Income Equity Fund (HIE), 6/22/2021, 5.39%.

One of my stocks will be reporting next week, Paychex (PAYX), on 6/25/2021.

Upgrades, downgrades, etc. issued on my stocks (as reported by E*Trade) last week were as follows:

Welltower (WELL) was upgraded from InLine to OutPerform by Evercore ISI, and from Market Perform to Strong Buy at Raymond James.

Kinder Morgan (KMI) was downgraded from Neutral to Sell at Goldman, and from Buy to Hold at Stifel.

Medical Properties Trust (MPW), Omega Healthcare Investors (OHI), and Realty Income (O) were all initiated at Peer Perform by Wolfe Research.

Ventas (VTR) and Welltower (WELL) were both initiated at OutPerform by Wolfe Research.

SLR Investment (SLRC) was resumed at OutPerform at Oppenheimer.

Nucor (NUE) was initiated at Neutral at JP Morgan.

Enbridge (ENB) was upgraded from Neutral to OutPerform at Credit Suisse.

Omega Healthcare Investors (OHI) was downgraded from Sector OutPerform to Sector Perform at Scotiabank.

Washington Real Estate Investment Trust (WRE) was downgraded from OutPerform to Market Perform at Raymond James.

Altria (MO) was initiated at Neutral at Redburn.

Coca Cola (KO) was reiterated at Buy at Argus.

National Health Investors (NHI) was upgraded from UnderPerform to Market Perform at BMO Capital. 

Occidental Petroleum (OXY) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

Compass Minerals International (CMP) was downgraded from Neutral to UnderWeight at JP Morgan.

As noted, stocks pulled back last week. The main question is whether this will morph into a 5% to 10% summer correction, or not. No resource I have looked at expects anything beyond a minor correction, and I concur that a major decline is unlikely. I was planning on selling some of my CEF holdings last week, while the market was making new highs, but missed the opportunity. My criteria was that the CEF’s post-Covid high was a 20 year high, that the CEF was selling at a premium over the NAV of its holdings, and I had a substantial gain to harvest. I placed limit orders, none filled. Right now, I’m more focused on buying than selling, if this correction continues. My point is, take what the market gives you, if it is enough to be worth selling or buying. Usually, it is neither, so the best thing to do then is nothing.

JT