After churning in place Monday through Wednesday, stocks broke out in rally mode Thursday and Friday to end the week substantially above where they began it. As earnings season builds to a climax, several better than expected reports seem to have ignited a rally. The oft-repeated strategy of reining in expectations, establishing a low bar, then leaping over it to generate enthusiasm has been executed flawlessly this cycle. The consensus now seems to be that we should ignore what the Fed has been saying, a 2015 Fed increase is highly unlikely, considering the weak economic numbers and the officially low inflation readings.

Meanwhile, my dividend payers just keep on keeping on, with this week’s ex-dividend dates as follows, by date:

10/27/2015

Spectra Energy Partners LP (SEP), yield 5.46%.

10/28/2015

Alliant Energy (LNT), yield 3.57%.

Unilever (UL), yield 2.90%.

ConAgra Foods (CAG), yield 2.36%.

Enterprise Products Partners LP (EPD), yield 5.70%.

Plains All American Pipeline (PAA), yield 8.75%.

Prospect Capital (PSEC), yield 13.57%. PSEC is a monthly payer.

American Capital Agency (AGNC), yield 12.54%. AGNC is also a monthly payer.

Enerplus (ERF), yield 9.60%. ERF pays $.05 CAN monthly, which equates to a yield of about 9.60%, considering exchange rates and ERF’s underwhelming market price of $5.02 US. The one-time aristocrat of the Canadian Energy Trusts has fallen far from its one-time lofty price of around $50.

10/29/2015

Realty Income (O), yield 4.55%. O pays monthly.

Paychex (PAYX), yield 3.26%.

Kinder Morgan Inc. (KMI), yield 6.86%. KMI announced a small dividend increase effective this cycle, but that news was overshadowed by a revenue shortfall, funding uncertainties as the firm announced stock issuances will cease, and concerns the new Liberal government in Canada may impede pending project approvals.

ONEOK Partners LP (OKS), yield 9.61%.

Noble Corp (NE), yield 4.60%, following a just-announced 60% dividend cut, to $.15 per quarter. The cut was expected, and the stock actually gained on the week.

Last week’s posting identified fifteen firms on my lists scheduled to report during the week just ended, and all did report as scheduled. See the firm’s websites, various financial and brokerage websites, or my choice, Seeking Alpha, for details. Probably the most notable story was MicroSoft (MSFT), which popped up more than $5 after a strong report, to a new multi-year high above $52.

As for the week coming up, more than 45 firms that I track will be reporting, tallied by day as follows:

10/26/2015

American Capital Agency (AGNC).

10/27/2015

Novartis (NVS), Pfizer (PFE), Potlatch (PCH), Reynolds American (RAI), Universal Parcel Service (UPS), Waste Management (WM), Legacy Reserves LP (LGCY), Merck (MRK), Unilever (UL).

10/28/2015

General Dynamics (GD), NextEra Energy (NEE), Norfolk Southern (NSC), Northrop Grumman (NOC), Southern Company (SO), Walgreens Boots Alliance (WBA), Martin Midstream Partners LP (MMLP), Mid-America Apartment Communities (MAA), Newmont Mining (NEM), Noble Corp (NE), Realty Income (O), Gladstone Investment (GAIN), GlaxoSmithKline (GSK), Statoil (STO), Williams Partners LP (WPZ), Medical Properties Trust (MPW).

10/29/2015

Ensco (ESV), Altria (MO), ConocoPhillips (COP), Diebold (DBD), Enterprise Products Partners LP (EPD), Royal Dutch Shell (RDS.B), Digital Realty Trust (DLR), SCANA (SCG), Sanofi (SNY), Total S A (TOT).

10/30/2015

Buckeye Partners LP (BPL), Chevron (CVX), Colgate Palmolive (CL), Eaton (ETN), Exelon (EXC), Exxon Mobil (XOM), Public Service Enterprise Group (PEG), Welltower (HCN, formerly Health Care REIT).  

Upgrades / downgrades from last week on my stocks were:

Darden Restaurants (DRI) was upgraded from Hold to Buy at Maxim Group.

Entergy (ETR) was upgraded from Sell to Neutral at Goldman.

Vodafone (VOD) was upgraded from Neutral to OutPerform at Macquarie.

Eaton (ETN) was initiated at UnderPerform Credit Agricole.

Kellogg (K) was initiated at Buy at Buckingham Research.

Digital Realty Trust (DLR) was resumed at OverWeight at Barclays.

Eaton (ETN) was initiated at UnderPerfprm at CLSA.

Ensco (ESV) was initiated at Buy at Citigroup.

GlaxoSmithKline (GSK) was upgraded from UnderPerform to Neutral at Credit Suisse.

Noble Corp (NE) was initiated at Neutral at Citigroup.

Pfizer (PFE) was upgraded to OutPerform at Cowen & Co.

Public Service Enterprise Group (PEG) was downgraded from Peer Perform to UnderPerform at Wolfe Research.

Transocean (RIG) was initiated at Sell at Citigroup.

Waste Management (WM) was upgraded from Hold to Buy at Stifel Nicolaus.

Reynolds American (RAI) downgraded from OutPerform to UnderPerform CLSA.

Legacy Reserves LP (LGCY) was downgraded from Neutral to UnderPerform at Bank of America/Merrill.

Memorial Production Partners LP (MEMP) was downgraded from Buy to neutral at Bank of America/Merrill.

Kinder Morgan Inc. (KMI) was downgraded from OutPerform to Neutral at Credit Suisse, and from Buy to Hold at Stifel Nicolaus.

Realty Income (O) was upgraded from Neutral to Buy at Bank of America/Merrill.

Waste Management (WM) was initiated at OverWeight at Barclays.

Kimberly Clark (KMB) was upgraded from Hold to Buy at Societe Generale.

MicroSoft (MSFT) was upgraded from Neutral to Buy at Bank of America/Merrill.

McDonalds (MCD) was upgraded from Neutral to OverWeight at Piper Jaffray.

American Electric Power (AEP) was downgraded from OutPerform to Neutral at Credit Suisse.

Raytheon (RTN) was downgraded to Peer Perform at Wolfe Research.

As noted, earnings season approaches maximum force this week, with more than forty of my stocks reporting. If the results overall continue to beat the lowered expectations, the rally should continue. Some of the recent bargains of just a few weeks ago have disappeared. Energy remains depressed overall, but the best deals among the majors are gone for now. Energy, some REITs, BDCs, and precious metals miners are the main bargain sectors at present. Some cyclicals are worth a look, such as Emerson Electric (EMR) and Eaton (ETN). These are down because of concerns over a world-wide economic slowdown. Now is a good time to start a position in these names, I believe. Once again, my cash is too high, I need to put it somewhere with a chance of a return. Most high-quality names are bid up too high just now. Of course, that is what is normal. Quality does not go “on sale” often in the stock market.   

JT

Stocks did not move significantly in either direction last week. The end result was a modest gain posted on all of the major stock averages. The week ahead will mostly be driven by earnings reports, as earnings season moves into a higher gear.

Stocks on my lists going ex-dividend this week are as follows:

Main Street Capital (MAIN), ex-dividend date 10/19/2015, yield 7.37%. MAIN pays monthly.

Colgate Palmolive (CL), ex-dividend date 10/21/2015, yield 2.26%.

Procter & Gamble (PG). ex-dividend date 10/21/2015, yield 3.54%.

Gladstone Investment (GAIN), ex-dividend date 10/22/2015, yield 10.05%. GAIN pays monthly.

Of the six stocks identified in last week’s posting as scheduled to report, five did so. See the firm’s websites or Seeking Alpha for details on earnings from General Electric (GE), Intel (INTC), Johnson & Johnson (JNJ), Phillip Morris (PM), or Blackstone Group (BX). Kinder Morgan Inc. (KMI) is now set to report this week, on 10/21/2015.

Stocks on my lists scheduled to report this week are as follows. By date:

10/20/2015 

Verizon (VZ).

10/21/2015 

Kimberly Clark (KMB), Coca Cola (KO), Kinder Morgan (KMI).

10/22/2015 

American Electric Power (AEP), McDonalds (MCD), 3M Co (MMM), MicroSoft (MSFT), Raytheon (RTN), AT&T (T), DrPepper Snapple (DPS), Nucor (NUE), Freeport-McMoran (FCX).

10/23/2015

Procter & Gamble (PG), Ventas (VTR). 

Upgrades / downgrades from last week on my stocks were as follows:

Brandywine (BDN) was upgraded from Neutral to OutPerform at Credit Suisse.

Eni S p A (E) was Upgraded from Reduce to Neutral at Nomura.

Linn Energy LLC (LINE) was downgraded from Market Perform to UnderPerform at FBR Capital.

Northrop Grumman (NOC) was upgraded from UnderWeight to Neutral at JP Morgan.

Raytheon (RTN) was upgraded to OverWeight at JP Morgan.

Statoil (STO) was downgraded from Focus Stock to Sector Perform at Scotia Howard Weil.

Exxon Mobil (XOM) was upgraded from UnderWeight to Equal Weight at Barclays.

Darden Restaurants (DRI) was downgraded from OutPerform to Market Perform at Raymond James.

Chimera Investment (CIM) was upgraded from UnderWeight to Equal Weight at Barclays.

CenturyLink (CTL) was initiated at Market Perform at Cowen & Company.

Frontier Communications (FTR) was initiated at OutPerform at Cowen & Company.

Spectra Energy Partners LP (SEP) was upgraded from Neutral to OutPerform at Credit Suisse.

ONEOK Partners LP (OKS) was downgraded from OutPerform to Neutral at Credit Suisse.

McDonalds (MCD) was initiated at Buy at Sun Trust Robinson Humphrey.

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

Legacy Reserves LP (LGCY) was downgraded from Buy to Hold at Wunderlich.

RPM International (RPM) was initiated at Sector Perform at RBC Capital Markets.

Intel (INTC) was upgraded to Buy at Summit Research.

Transocean (RIG) was downgraded from Neutral to Reduce at Seaport Global Securities.

Nucor (NUE) was initiated at Buy at Berenberg.

Eaton (ETN) was downgraded from OutPerform to Neutral at Robert W Baird, and also to Neutral at William Blair.

Sanofi (SNY) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

American Electric Power (AEP) was initiated at Neutral at Citigroup.

Wal-Mart Stores (WMT) was downgraded from Buy to Neutral at Bank of America/Merrill, and also from OutPerform to Neutral at Credit Suisse.

Blackstone Group (BX) was upgraded from Perform to OutPerform at Oppenheimer.

Nucor (NUE) was initiated at Neutral at Rosenblatt.

That was more than usual. Earnings season generates a higher than usual volume of analyst actions, as they react to the new numbers posted by the firms.

My only purchase last week was an initial purchase of Wal-Mart (WMT), as the stock dropped nearly seven dollars on Wednesday, following an earnings warning from the firm. That elevated the yield to more than 3%. I went in cautiously, starting out with only a small stake. If it drops a little more, I’ll add to my WMT holdings. WMT has declined from the high eighties at year-end 2014 to under $60 currently. I had no interest until last week, when I could not ignore the bargain opportunity the dramatic reaction provided. I also sold out of my position in Exxon Mobil (XOM), as the stock climbed above $80, after picking up shares as low as $67 and change in the recent oil price swoon. I probably should have just left it alone, but a quick gain in just a month or two like that is hard to pass up. My net gain was more than three years’ worth of dividends. Right now, with the exception of WMT, nothing showing up on my radar excites me much, as far as buy opportunities are concerned.

JT

The market roller coaster made a huge climb last week, with the venerable Dow Jones Industrials Index gaining over 500 points. All the major averages gained more or less proportionately as well. The question becomes, is this indeed a roller coaster, with a breath-taking drop slated to occur next, or is it the first leg of a fall stock rally? The gain certainly wasn’t due to favorable news from home or abroad. As for interest rates and the Fed, it seems more and more that the Fed mimics the POTUS, in that it talks tough but freezes up when it comes time for action.

Meanwhile, life goes on, with the following stocks on my lists going ex-dividend this week, as follows:

First, one miss from last week, as Breitburn Energy Partners LP (BBEP) went ex-dividend 10/07/2015, with a monthly payout of $0.0417 continuing, at least for another month.  That may not sound like much, but with a unit price of $2.78, it equates to an annualized yield of 17.98%.

Ex-dividend dates and yields upcoming are as follows, by date:

10/13/2015

Fifth Street Finance (FSC), yield 11.25%. The BDC pays monthly.

Consolidated Communications (CNSL), yield 7.58%. This rural telecom has paid steadily since 2005, with no reduction throughout the financial crisis.  

Freeport-McMoran (FCX), yield 1.48%. Like most miners, FCX has had to significantly reduce the payout in 2015. Further, the commodity champion’s diversification into energy, which seemed prescient initially, has provided a further drag on the firm since the oil price decline. 

10/14/2015

Kayne Anderson Energy Development (KED), yield 8.52%. KED is a closed-end fund that invests in publicly-traded energy MLPs and debt securities of MLPs and other energy firms.

10/15/2015

ConocoPhillips (COP), yield 5.28%.

RPM International (RPM), yield 2.51%. Unlike many dividend payers, this firm’s yield has fallen because of the high stock price, not from dividend cuts.

10/19/2015

Main Street Capital (MAIN), yield 7.50%. This BDC approaches “blue chip” status, paying steadily since start-up in 2008, not the best of timing. Although the initial payout rate was reduced at the height of the 2008-2009 market storm, it has held steady with occasional increases ever since. MAIN is also known for making occasional “bonus” distributions, further sweetening the pot for long-term holders.

Earnings season is starting out slowly, as usual, but will be building to a crescendo in the next 3 or so weeks. Early hitters, among my stocks, were RPM International (RPM) on 10/7/2015, and a major player that I overlooked last week, Pepsico (PEP), which reported on 10/06/2015. See the firm’s websites or Seeking Alpha for earnings details.

As for the upcoming week, stocks (on my lists) reporting are:

Intel (INTC), 10/13/2015.

Johnson & Johnson (JNJ), 10/13/2015.

Kinder Morgan Inc. (KMI), 10/13/2015.

Phillip Morris (PM), 10/15/2015.

Blackstone Group LP (BX), 10/15/2015.

General Electric (GE), 10/16/2015. It has been a long slog for GE, reducing the GE Capital component and building up the industrial segments, but the firm is evolving into the powerhouse industrial company that CEO Jeffrey Immelt has striven to create since the Financial Crisis exposed the hazards of relying too much on the financial component. In my opinion, GE is still mispriced (too low) by the market, although not as much currently as it has been in recent years. GE remains my largest holding. I’m not selling any time soon, if ever.

Other news regarding my stocks from last week:

Crestwood Energy Partners LP (CMLP) was acquired by its general partner Crestwood Equity Partners LP (CEQP), also an MLP. Holders of CMLP received 2.75 units of CEQP for every unit of CMLP held. With an underwhelming unit price of $2.68, CEQP yields 20.52%, for the moment at least. I will continue to track CEQP in place of CMLP as one of my Tier3 high-yield high-risk stocks.

For reasons beyond my comprehension, Health Care REIT is now Welltower Inc. The stock symbol remains HCN, which of course does not logically relate to “Welltower”, and from everything I’ve read, there are no other changes beyond the name change. Why, why, introduce this confusion? The benefit of this move escapes me.

Home Properties (HME), which I briefly added to my Tier2 list, has disappeared, having been acquired by an affiliate of Lone Star Funds, after which Home Properties will no longer be a public company. The dividend was suspended pending the acquisition, since May 2015, and so this entity is no longer on my lists in any form.

Freeport-McMoran (FCX) has enjoyed a slight uptick since the news came out at the end of August that activist investor Carl Icahn has acquired a stake in the company.

Upgrades / downgrades coming out last week on my stocks were:

Johnson  & Johnson (JNJ) was initiated at Neutral at Piper Jaffrey.

Norfolk Southern (NSC) was downgraded from Equal Weight to UnderWeight at Barclays.

Mid-America Apartment Communities (MAA) was downgraded from OutPerform to Neutral at Robert W. Baird.

DrPepper Snapple (DRI) was upgraded to Buy at Evercore ISI Group.

Eaton (ETN) was downgraded from OverWeight to Equal Weight at Barclays.

Freeport McMoran (FCX) was downgraded from Buy to Hold at Deutsche Bank. 

Nucor (NUE) was upgraded from Hold to Buy at Deutsche Bank. 

Annaly Capital Management (NLY) was upgraded from UnderPerform to Market Perform at FBR Capital, and from UnderPerform to Neutral at BofA/Merrill.

Eaton (ETN) was downgraded from OverWeight to Neutral at JP Morgan.

Three contract drillers that I follow, Ensco Plc (ESV), Transocean LTD (RIG), and Noble Plc (NE) were all initiated at Sector Weight at KeyBanc Capital Markets.

Linn Energy LLC (LINE) was downgraded from Buy to Hold at Stifel.

Crestwood Equity Partners LP (CEQP) was downgraded to UnderPerform at BofA/Merrill.

Darden Restaurants (DRI) was initiated at Neutral at SunTrust Robinson Humphrey.

McDonalds (MCD) was initiated at Buy at SunTrust Robinson Humphrey.

Medtronic (MDT) was upgraded to Buy at Evercore ISI Group.

Senior Housing Properties Trust (SNH) was initiated at Market Perform at FBR Capital.

Earnings will likely be the driver of market action in the week ahead, barring any dramatic geopolitical developments. As for economic releases, the latter part of the week will see the latest reads on PPI, CPI, Retail Sales, a couple of regional manufacturing indicators, Industrial Production, and Capacity Utilization. The Republican leadership competition in the House, the continuing early presidential campaigning, the also continuing saga of Hillary’s email transgressions, and the latest Obama outrage will dominate the domestic news flow. The best stock bargains have come and gone, but they may yet return if things deteriorate further from here. Stay focused and alert, opportunities are usually short-lived, and are not grasped by the slow-footed investor.

JT

The market roller coaster continued last week, with a huge down day on Monday, followed by two positive days, one neutral day, and then a substantial up day on Friday, triggered by a significantly disappointing monthly Jobs report. As per the perverse logic of the market, in that bad news causes stocks to rally, that is what occurred. The net result for the week was a modest gain overall. Geopolitical developments emanating from the Middle East continued to dominate the news cycle, as the regime’s policy failures become ever more evident.

Stocks on my lists going ex-dividend this week (none the following Monday this time around) are as follows:

First, to repeat the lone stock from last week going ex-dividend on 10/5/2015:

10/05/2015

Raytheon (RTN), yield 2.49%.

Then, additional stocks going ex-dividend this week are:

10/07/2015

General Dynamics (GD), yield 1.98%.

General Mills (GIS), yield 3.11%.

AT&T (T), yield 5.76%.

Verizon (VZ), yield 5.28%.

Darden Restaurants (DRI), yield 3.21%.

10/08/2015

Universal (UVV), yield 4.19%.

Paychex (PAYX) reported earnings on 9/30/2015 as scheduled, beating estimates on both earnings and revenue. See the firm’s website or Seeking Alpha (SA) for details.

RPM International (RPM) is the only stock I track reporting earnings next week, due on 10/07/2015.

Upgrades / downgrades from last week on my stocks were:

Eni SpA (E) was initiated at UnderPerform at BMO Capital.

Royal Dutch Shell (RDS.B) was initiated at UnderPerform at BMO Capital.

Transocean (RIG) was upgraded to Hold at Deutsche Bank.

Total S A (TOT) was initiated at OutPerform at BMO Capital.

Digital Realty (DLR) was upgraded from Sector Weight to OverWeight at KeyBanc Capital Markets.

McDonalds (MCD) was upgraded from Neutral to OutPerform at Credit Suisse.

Apollo Investment (AINV) was initiated at Neutral at DA Davidson.

Ares Capital (ARCC) was initiated at Buy at DA Davidson.

BlackRock Capital (BKCC) was initiated at Buy at DA Davidson.

Solar Capital (SLRC) was initiated at Buy at DA Davidson.

Johnson & Johnson (JNJ) was upgraded to Buy at Deutsche Bank.

PennantPark Investment (PNNT) was initiated at Buy at DA Davidson.

Raytheon (RTN) was upgraded to Buy at UBS.

Darden Restaurants (DRI) was initiated at Hold at Maxim Group.

Ares Capital (ARCC) was upgraded from Neutral to Buy at Macquarie.

MicroSoft (MSFT) was upgraded from UnderPerform to Neutral at BofA/Merrill.

McDonalds (MCD) was initiated at Neutral at Nomura.

Pfizer (PFE) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

I did some “bottom fishing” last week, taking advantage of the declines to buy some stocks at what I hope ends up being terrific bargains:

Hercules Technology Growth Capital (HTGC) at $10.82, next ex-dividend 11/13 est, yield 12.12%. Added to existing position.

KCAP Financial (KCAP) at $4.75, next ex-dividend 10//9, yield 17.43%. New position.

Kinder Morgan Inc (KMI) at $27.62, next ex-dividend 10/29 est, yield 6.61%. Added to existing position.

Memorial Production Partners LP (MEMP) at $4.75, next ex-dividend 11/3 est, yield 40.89%. Added to existing position.

RAIT Financial Trust (RAS) at $5.03, next ex-dividend 10/7, yield 13.93%. Added to existing position.

As can be seen by the prices paid, I didn’t pay a lot. Further, I didn’t buy very many shares in each case, either. Sometimes you have to buy something when the price gets low enough, regardless of the outlook. If things work out, you will do quite well. If they don’t, at least you won’t lose nearly as much as those who bought when everything was wonderful, and prices reflected the optimism.

JT