Stocks last week went nowhere for two days, advanced the next two days, then finished the week Friday by giving back about half of the advance. The end result was a modest gain overall for the week.  The major economic news was surprise, surprise, the Fed did not increase rates. Actually, the surprise would have been if they had increased rates.

Stocks on my lists going ex-dividend in the next week are as follows, with ex-dividend date and annualized yield percent as of Friday’s close indicated:

Phillip Morris (PM), 9/26/2016, 4.09%.

MFA Financial (MFA), 9/26/2016, 10.32%.

Enerplus (ERF), 9/27/2016, 1.45% ERF pays monthly.

American Capital Agency (AGNC), 9/28/2016, 10.90%. AGNC pays monthly.

STAG Industrial (STAG), 9/28/2016, 5.63%. STAG is also a monthly payer.

Windstream Holdings (WIN), 9/28/2016, 6.06%.

Prospect Capital (PSEC), 9/28/2016, 12.11%. PSEC pays monthly.

Annaly Capital Management (NLY), 9/28/2016, 11.08%.

Nucor (NUE), 9/28/2016, 3.13%.

National Health Investors (NHI), 9/28/2016, 4.46%.

Realty Income (O), 9/29/2016, 3.57%. O pays monthly.

Kimco Realty (KIM), 10/03/2016, 3.41%.

Cisco Systems (CSCO), 10/03/2016, 3.28%.

Raytheon (RTN), 10/03/2016, 2.10%.

General Mills (GIS) reported on 9/21/2016 as scheduled. For details, see the firm’s press release, articles on the mainstream financial media, brokerage compilations, or my preferred resource, Seeking Alpha. A transcript of the earnings teleconference with analysts is available on Seeking Alpha.

As for the week ahead, three stocks on my lists are scheduled to report; Paychex (PAYX) on 9/28/2016, and ConAgra (CAG) and Pepsico (PEP), both on 9/29/2016.

Listed next are the upgrades / downgrades from last week on stocks I follow. The prior rating for upgrades / downgrades is also indicated, if available from my source.

Buckeye Partners L P (BPL) was upgraded from Neutral to Buy at Goldman.

Enterprise Products Partners L P (EPD) was upgraded from Neutral to OutPerform at Credit Suisse.

Ensco (ESV) was upgraded to Buy at Zepherin Group.

Legacy Reserves L P (LGCY) was downgraded from Hold to Sell at Stifel Nicolaus.

Enterprise Products Partners L P (EPD) was initiated at Buy at Evercore ISI Group.

Martin Midstream Partners L P (MMLP) was initiated at Neutral at Janney Capital.

American Electric Power (AEP) was downgraded from Buy to Hold at Jeffries.

Intel (INTC) was initiated at Positive at Susquehanna.

Novartis (NVS) was initiated at Buy at Chardan Capital Markets.

Vodafone (VOD) was initiated at Hold at Argus.

Ensco (ESV) was upgraded from Neutral to Buy at Goldman.

Noble P L C (NE) was upgraded from Sell to Neutral at Goldman.

Altria (MO) was initiated at Hold at Jeffries.

Phillip Morris (PM) was also initiated at Hold at Jeffries.

Reynolds American (RAI) was initiated at Buy at Jeffries.

Ensco (ESV) was upgraded to Neutral at Clarksons Platou.

JM Smucker (SJM) was upgraded from UnderPerform to Neutral at Hilliard Lyons.

GlaxoSmithKline (GSK) was initiated at OverWeight at Piper Jaffray.

NextEra Energy (NEE) was downgraded from Buy to Hold at Deutsche Bank.

Transocean (RIG) was upgraded from UnderPerform to Neutral at Credit Suisse.

Sanofi (SNY) was initiated at Neutral at Piper Jaffray.

Sysco (SYY) was initiated at Underweight at Barclays.

Wal-Mart Stores (WMT) was upgraded from Equal Weight to OverWeight at Barclays.

The only move I made last week was to buy back General Mills (GIS) at less than $65 per share, after selling 7/5/2016 at $72.25. I won’t miss even one dividend. This illustrates my strategy perfectly. Sell when the stock becomes substantially over-valued, buy it back when it comes back down, collect dividends all along the way. With the quarterly dividend at $.48, a gain of more than $7 works out to be equivalent to fourteen extra quarterly dividends, or as much as would be collected in the next three plus years. Of course, not every stock cooperates so perfectly as GIS did, but when it works, it’s a beautiful thing!

JT

In the nine trading days since my last post, stocks gained on three days and lost ground on six, at least per the Dow Industrials and S&P 500 indexes, with the end result being a loss over the period. The NASDAQ fared a bit better, but still also lost ground. The economic data releases continue to paint a dismal picture of a stalling economy, while the emphasis on the Fed and the rate-hike possibilities borders on the ridiculous, with big swings in the market being purportedly due to comments from various Fed members. A September rate hike is considered unlikely, but if it should occur, look out below!

As often happens with a two week stretch between posts, a couple of stocks on my lists announced dividends after my last posting, such that the ex-dividend date has now passed. Still, for the sake of completeness, here they are: General Electric (GE), ex-dividend date 9/15/2016, yield 3.09%, and Potlatch (PCH), ex-dividend 9/16/2016, yield 4.13%.

Looking ahead, stocks on my lists going ex-dividend in the next week are as follows, with ex-dividend date and annualized yield percent as of Friday’s close indicated:

Gladstone Investment (GAIN), 9/19/2016, 8.52%. GAIN is a monthly payer.

Apollo Investment (AINV), 9/19/2016, 12.48%.

Main Street Capital (MAIN), 9/19/2016, 6.50%. MAIN is a monthly payer.

PennantPark Investment (PNNT), 9/19/2016, 14.38%.

Solar Capital (SLRC), 9/20/2016, 7.89%.

Total S A (TOT), 9/22/2016, 5.84%. Note that the yield is before 30% foreign tax withholding.

MFA Financial (MFA), 9/26/2016, 10.58%.

Annaly Capital Management (NLY), 9/28/2016, 11.40%. This one is a little further ahead than a week, but since it has been announced, I figured I may as well note it.

None of my stocks reported earnings during the two week period just ended, but one major firm is scheduled to report next week; General Mills (GIS), on 9/21/2016.

The volume of upgrades/downgrades coming out on my stocks the last two weeks has increased a little from the prior period. Listed below are the ones I have seen. The prior rating for upgrades / downgrades is also indicated, if available from my source.

Greif (GEF) was upgraded from Neutral to Buy at BofA/Merrill.

Frontier Communications (FTR) was upgraded from UnderPerform to Neutral at Macquarie.

ONEOK Partners LP (OKS) was upgraded from UnderWeight to Neutral at JP Morgan.

MFA Financial (MFA) was downgraded from OutPerform to Market Perform at FBR Capital.

Intel (INTC) was upgraded to Buy at Evercore ISI Group.

Barrick Gold (ABX) was initiated at Sell at Berenberg.

Conoco Phillips (COP) was upgraded from UnderPerform to Hold at Jeffries.

Spectra Energy (SE) was downgraded from Strong Buy to OutPerform at Raymond James, from Sector Perform to Sector OutPerform at CIBC, and downgraded from OverWeight to Neutral at Piper Jaffrey, and from OverWeight to Neutral at Simmons. SE received all this attention because it was just announced on 9/6/2016 that Enbridge (ENB), a Canadian firm, would be acquiring SE. The stock jumped on the news, and I sold immediately, no questions asked. The decision was a bit easier since I had just received a dividend from SE. SE will be dropping from my lists when the merger is complete.

Spectra Energy Partners LP (SEP) was downgraded from OverWeight to Neutral at Piper Jaffrey, and from OverWeight to Neutral at Simmons. SEP will remain as is for a time, but long term, is likely to be merged or combined in some fashion with Enbridge’s existing MLPs. SEP will remain on my lists only for as long as it continues as currently constituted.

Statoil (STO) was upgraded from Sector Perform Sector OutPerform at HSBC Securities. 

Spectra Energy (SE) was downgraded from Buy to Neutral at Goldman.

Sanofi (SNY) was upgraded from Hold to Buy at Berenberg.

Total S A (TOT) was downgraded from OutPerform to Market Perform at Bernstein. Eaton (ETN) was downgraded from OverWeight to Sector Weight at KeyBanc Capital Markets.

Statoil (STO) was downgraded from Equal Weight to UnderWeight at Morgan Stanley.

NuStar Energy L P (NS) was initiated at Market Perform at FBR Capital.

Paychex (PAYX) was initiated at Neutral at Wedbush.

Plains All American Pipeline (PAA) was initiated at Market Perform at FBR Capital.

Martin Midstream Partners L P (MMLP) was initiated at OutPerform at FBR Capital.

Colgate Palmolive (CL) was upgraded from Neutral to Buy at BofA/Merrill.

Conoco Phillips (COP) was upgraded from Neutral to OverWeight at JP Morgan.

Phillip Morris (PM) was upgraded from Neutral to Buy at Goldman.

Wal-Mart Stores (WMT) was upgraded from Market Perform to OutPerform at Cowen.

Reynolds American (RAI) was downgraded from Buy to Neutral at Goldman.

Spectra Energy (SE) was downgraded from Buy to Neutral at UBS.

Crown Castle International (CCI) was initiated at Buy at SunTrust.

Altria (MO) was initiated at Buy at Citigroup.

Sanofi (SNY) was upgraded from UnderPerform to Neutral at Exane BNP Paribas.

Reynolds American (RAI) was initiated at Buy at Citigroup.

Phillip Morris (MO) was initiated at Neutral at Goldman.

Nestle S A (NSRGY) was upgraded from Neutral to Buy at Goldman.

NuStar Energy L P (NS) was upgraded from Hold to Buy at Stifel.

ONEOK Partners L P (OKS) was upgraded from Hold to Buy at Stifel.

Freeport McMoran (FCX) was downgraded from Equal Weight to UnderWeight at Morgan Stanley.

Sanofi (SNY) was resumed at UnderWeight at JP Morgan.

Statoil (STO) was upgraded from Neutral to Buy at BofA/Merrill.

Wal-Mart Stores (WMT) was initiated at OutPerform at Credit Suisse.

Coca Cola (KO) was initiated at Neutral at Credit Suisse.

Pepsico (PEP) was initiated at OutPerform at Credit Suisse.

DrPepper Snapple (DPS) was initiated at OutPerform at Credit Suisse.

The main event next week, as far as scheduled economic news is concerned, is the Fed meeting Tuesday and Wednesday. While the probability is not zero, it is likely close to it, as far as a rate hike is concerned. It would be highly unusual for a pre-election day Fed meeting. About the only rationale would be if the Fed wanted to show the world that it cannot always be predicted with certainty. Beyond the Fed meeting, the news flow will likely be dominated by the political sphere. My prediction is pretty safe; Trump will be outrageous, at least as far as MSNBC is concerned, and Hillary will be exposed further as the serial liar she is, which MSNBC will either ignore entirely or sugar-coat in some fashion. With the polls showing the race to be a toss-up, the markets will be volatile, as uncertainty stresses the market more than anything. Stocks are still too high to buy, and for most names, the ideal time to sell may have passed. My plan is to watch and wait, with no moves planned unless an opportunity shows up that I don’t currently expect.

JT    

Stocks gained on Monday, then mostly gave it back the next two days, duplicating over the last three days of August the performance of the entire month. Then, the first two days of September began with modest gains. After a tepid Monthly Jobs report on Friday, most Fed watchers are postulating that a September rate hike is highly unlikely, which perversely accounts for the positive market action on Friday, in response to the report.

After just returning from a trip, I have learned that I must go on another trip next week that was not expected. So, once again I will be looking ahead two weeks, as far as ex-dividend dates and earnings are concerned. The downside of looking further ahead than one week is that it is more likely that upcoming ex-dividend dates will be missed for firms that don’t announce until just before the date. My purpose in noting upcoming dividend dates is to give the reader advance notice so the stock can be acquired in time to receive the dividend. That purpose is defeated, obviously, if the date has passed before I list the stock.

To illustrate that point, here are three stocks that had not yet announced when I did my last review, with ex-dividend dates that have come and gone:

CenturyLink (CTL), 8/31/2016, yield 7.79%.

Ensco PLC (ESV), 8/31/2016, yield 0.54%. In this case, the only reason to buy is if you believe the offshore oil and gas contract drillers are set for a big comeback, which at this point appears unlikely anytime soon.

Triangle Capital (TCAP), 9/2/2016, yield 9.15%.

Speaking of dividends, the pace will be picking up a bit after Labor Day. Stocks on my lists going ex-dividend the next two weeks are as follows, with the ex-dividend date and current annualized yield shown. Dividends are quarterly unless otherwise indicated.

Waste Management (WM), 9/7/2016, 2.56%.

Public Service Enterprise Group (PEG), 9/7/2016, 3.85%.

Kimberly Clark (KMB), 9/7/2016, 2.87%.

Iron Mountain (IRM), 9/8/2016, 5.03%.

SCANA (SCG), 9/8/2016, 3.29%.

Reynolds American (RAI), 9/8/2016, 3.70%.

Dr Pepper Snapple (DPS), 9/9/2016, 2.27%.

Coca Cola (KO), 9/13/2016, 3.23%.

Merck (MRK), 9/13/2016, 2.93%.

Altria (MO), 9/13/2016, 3.68%.

Ventas (VTR), 9/13/2016, 4.04%.

Digital Realty (DLR), 9/13/2016, 3.54%.

Washington Real Estate (WRE), 9/13/2016, 3.71%.

Ares Capital (ARCC), 9/13/2016, 9.41%.

Frontier Communications (FTR), 9/13/2016, 9.25%.

Medical Properties Trust (MPW), 9/13/2016, 6.11%.

Fifth Street Financial (FSC), 9/13/2016, 11.50%. FSC pays monthly.

Newmont Mining (NEM), 9/13/2016, 0.25%.

TICC Capital (TICC), 9/14/2016, 18.56%.

Crown Castle International (CCI), 9/14/2016, 3.74%.

Greif (GEF), 9/15/2016, 3.71%.

BlackRock Capital Investment (BKCC), 9/15/2016, 9.67%.

Horizon Technology Finance (HRZN), 9/16/2016, 10.15%. HRZN pays monthly. This BDC is a new addition to my Tier3 list. Like all BDCs, especially those with yields at or near double digits, it is highly risky and speculative. That said, I don’t believe HRZN is any riskier than other BDCs on my Tier3 list, several of which yield less than HRZN.

Apollo Investment (AINV), 9/19/2016, 12.27%.

Main Street Capital (MAIN), 9/19/2016, 6.48%. MAIN is a monthly payer.

Gladstone Investment (GAIN), 9/19/2016, 8.17%. GAIN is also a monthly payer.

As for earnings, the last days of August saw three firms on my lists report, JM Smucker (SJM) on 8/23/2016, Prospect Capital (PSEC) on 8/30/2016, and Greif (GEF) on 8/31/2016. For details on earnings, see the firm’s press releases, articles on the mainstream financial media, brokerage compilations, or my preferred resource, Seeking Alpha. In many cases a transcript of the earnings teleconference with analysts is available on Seeking Alpha.

None of my stocks are scheduled to report the next two weeks.

With earnings season over and the usual end of summer slowdown, the volume of upgrades/downgrades coming out on my stocks the last two weeks has been minimal. Listed below are the ones I have seen. The prior rating for upgrades / downgrades is also indicated, if available from my source.

Entergy (ETR) was upgraded from Neutral to Buy at Guggenheim.

Nucor (NUE) was initiated at Neutral at Citigroup.

Valero (VLO) was initiated at Buy at Jeffries.

Transocean (RIG) was upgraded from Sell to Neutral at Citigroup.

Buckeye Partners LP (BPL) was initiated at Neutral at Goldman.

Reynolds American (RAI) was initiated at Neutral at UBS.

Procter & Gamble (PG) was upgraded to Buy at Johnson Rice.

Waste Management (WM) was initiated at Neutral at Macquarie.

McDonalds (MCD) was upgraded from Neutral to OutPerform at Robert W Baird.

Plains All American Pipeline LP (PAA) was initiated at Hold at Wunderlich.

Energy Transfer Equity LP (ETE) was initiated at OverWeight at JP Morgan.

To repeat my standard admonition on upgrades / downgrades, I only list these as entertainment, not as actionable advice. By the time downgrades occur, it is usually too late to sell, and by the time upgrades occur, it is usually too late to buy. Further, sometimes the recommendations seem to be the opposite of what one would expect. Also, note that the recommendations are almost totally based on expected near-term direction of the stock price, not on the long term value as an investment, with dividends included.

The status of the market remains about the same, as we enter the post-Labor Day period. Stocks are bid up to extremes, for quality names at least, such that buying in at current levels almost guarantees marginal returns. Mortgage REITs and BDCs are available at bargain prices and high yields, to go along with the high risk. Just remember, if a 2008 style meltdown occurs, these names are likely to cut dividends, and in some cases may disappear. Energy stocks are a mixed bag, with the majors no longer representing outstanding bargains, while many if not most of the rest are bargains only if oil and gas prices recover in the next year or two. That could happen, but there are no signs at this time that such a recovery is imminent. My strategy is to hold plenty of “dry powder” in case a market swoon presents buy opportunities, and don’t be too quick to sell a good, high-quality dividend payer, even when you have a nice gain, since it may be awhile before you can buy it back for less than you sold it for.

JT