The major averages all gained over the week just ended, which was punctuated with the best day for stocks in over two weeks, on Friday. It could all be reversed next week if the limited trade deal with China does not materialize, and there are hints that it may not. Further, we are in the thick of earnings season, with an avalanche of reports coming our way next week, and there may be some disappointments in the mix, which could also depress the market.

After a couple of weeks with a minimal number of stocks I follow going ex-dividend, the week upcoming, covering the end of one month and the beginning of another, has a much longer list, as follows, grouped by ex-dividend date. The yield as of Friday’s close is shown. Assume frequency is quarterly, unless otherwise indicated.

10/30/2019

Enterprise Products Partners LP (EPD), 6.45%.

AGNC Investment (AGNC), 11.57%. AGNC pays monthly.

Hoegh LNG Partners LP (HMLP), 10.48%.

Plains All American Pipeline LP (PAA), 7.58%.

Tanger Factory Outlet Centers (SKT), 8.19%.

Omega Healthcare Investors (OHI), 6.04%.

Alliant Energy (LNT), 2.65%.

Enerplus (ERF), 1.47%. ERF pays monthly. It is on my Tier4 list, no longer recommended, but per my policy, will continue to be reported as long as it continues trading. ERF will likely continue for a long time, but barring a major rebound in oil prices, and some changes in Canadian governmental policies, it is unlikely to ever regain its past glories from when it was the premier Canadian high-income energy trust.

Kinder Morgan (KMI), 4.89%.

STAG Industrial (STAG), 4.63%. STAG is a monthly payer.

Prospect Capital (PSEC), 10.99%. Something is going on with this monthly-paying BDC, I’m not sure what, but it is teetering on the brink of being relegated to my Tier4 No Longer Recommended list.

10/31/2019

Realty Income (O), 3.37%. O pays monthly, and has emerged as a “blue-chip” REIT if there ever can be such a thing. But with a yield under 4%, I can’t get excited about O just now.

Paychex (PAYX), 2.93%. PAYX is another long time holding that has become too popular, same as O, as evidenced by the sub-3% yield.

11/01/2019

Blackstone Group (BX), 3.77%.

ONEOK (OKE), 5.13%.

HCP Inc. (HCP), 3.94%.

11/04/2019

Energy Transfer LP (ET), 9.81%.  

Earnings season is now reaching the peak of reporting activity, and a large number of my stocks are scheduled to report next week, as listed following, by date.

10/28/2019

AT&T (T), Enterprise Products Partners LP (EPD), PotlatchDeltic (PCH), Transocean LTD (RIG), Welltower (WELL).

10/29/2019

Crestwood Equity Partners LP (CEQP), Diebold Nixdorf (DBD), Eaton (ETN), Kellogg (K), Merck (MRK), Pfizer (PFE), B&G Foods (BGS), Digital Realty Trust (DLR), ONEOK (OKE).

10/30/2019

Ares Capital (ARCC), Chimera Investment (CIM), Entergy (ETR), General Electric (GE), Southern Co (SO), AGNC Investment (AGNC), Annaly Capital Management (NLY), HCP Inc (HCP), Hercules Capital (HTGC), Mid America Apartment Communities (MAA), Noble Corp PLC (NE), STAG Industrial (STAG), Tanger Factory Outlet Centers (SKT), Williams Companies (WMB).

10/31/2019

Altria (MO), Consolidated Communications Holdings (CNSL), Exelon (EXC), Iron Mountain (IRM), Kraft Heinz (KHC), Magellan Midstream Partners LP (MMP), Medical Properties Trust (MPW), Public Service Enterprise Group (PEG), Royal Dutch Shell PLC (RDS.A, RDS.B), Sanofi (SNY), Ladder Capital (LADR).

11/01/2019

Chevron (CVX), Colgate Palmolive (CL), ExxonMobil (XOM).

Note that RIG, NE, GE, and CNSL are on my Tier4, Not Recommended list, but will be reported as long as they continue on. CEQP will be moved from Tier4 back to Tier3 on my next revamp of my lists. LADR will be added as a new Tier3 recommendation on my next revamp.

I realized after I had posted last week that I had failed to list the week’s upgrades / downgrades etc. on my stocks, so I will list them now, and then list those from the current week. I limit these lists to what is flagged by ETrade, and I know that there are other resources that could be checked, but none that present the information as conveniently as ETrade.

From the week ended 10/18/2019:

Blackstone Group (BX) was downgraded from Buy to Neutral at Bank of America.

Medical Properties Trust (MPW) was initiated at Neutral at Bank of America.

Senior Housing Trust (SNH) was initiated at UnderPerform at Bank of America.

Omega Health Investors (OHI) was initiated at Buy at Bank of America.

Yamana Gold (AUY) was initiated at OutPerform at Credit Suisse.

Williams Companies (WPM) was downgraded from OverWeight to Equal Weight at Barclays.

Enbridge (ENB) was also downgraded from OverWeight to Equal Weight at Barclays.

Eaton (ETN) was upgraded from Perform to OutPerform at Oppenheimer.

Johnson & Johnson (JNJ) was upgraded from UnderWeight to Neutral at Atlantic Equities.

AT&T (T) and Verizon (VZ) were both initiated at Market Perform at Bernstein.

Pattern Energy Group (PEGI) was downgraded from Buy to Neutral at Goldman.

Park Hotels Resorts (PK) was initiated at Market Perform at BMO Capital.

General Mills (GIS) was resumed at Sector Perform at RBC Capital Markets.

Hershey Co (HSY) was also resumed at Sector Perform at RBC Capital Markets.

Kellogg (K) was another stock resumed at Sector Perform at RBC Capital Markets.

Pfizer (PFE) and Merck (MRK) were both resumed at Neutral at Bank of America.

Altria (MO) was upgraded from Sell to Neutral at Citigroup.

Barrick Gold (GOLD) was upgraded from Market Perform to OutPerform at Bank of America.

From the week just ended, 10/25/2019:

Omega Health Investors (OHI) was downgraded from Strong Buy to Market Perform at Raymond James.

Ares Capital (ARCC) was downgraded from OutPerform to Market Perform at Raymond James.

Coventa Holdings (CVA) was downgraded from Strong Buy to Market Perform at Raymond James.

Main Street Capital (MAIN) was downgraded from OutPerform to Market Perform at Raymond James.

Kimberly Clark (KMB) was upgraded from Sell to Hold at Deutsche Bank.

Coca Cola (KO) was upgraded from Neutral to Buy at UBS.

Crestwood Equity Partners LP (CEQP) was upgraded from OutPerform to Strong Buy at Raymond James.

Kimco Realty (KIM) was downgraded from OverWeight to Equal Weight at Capital One.

McDonalds (MCD) was reiterated at OutPerform at Telsey Advisory Group.

Kellogg (K) was initiated at In-Line at Evercore ISI.

Intel (INTC) was upgraded from Market Perform to OutPerform at Northland Capital.

Kinder Morgan (KMI) was downgraded from Buy to Neutral at Goldman.

Intel was reiterated at ratings that varied markedly, reiterated meaning the firms had not changed their view of the firm following the latest earnings report. Ratings were: Market Perform, Cowen & Co, Wells Fargo, BMO Capital; Neutral, Susquehanna; Hold, SunTrust; OutPerform, Baird, Credit Suisse; OverWeight, Morgan Stanley, JP Morgan; UnderPerform, RBC Capital Markets; and finally, UnderWeight, at Barclays. I find it amazing that there can be such a broad range of opinions, from analysts looking at the same numbers!

Looking ahead, it could be a volatile week in the markets, with a lot of new information coming from firms reporting earnings, the likelihood of another disappointment regarding a trade deal with China, and of course, the continuing circus in Washington. My guess is the downs days will outdistance the up days, with a net decline for the week. We shall see.

JT

We have a divergence between the Dow Industrials and the other major averages I track, with the Dow Industrials posting a small loss for the week just ended, compliments of Boeing and Johnson & Johnson, while the other, far more diversified averages, posted small gains for the week. That would be the S&P 500, the New York Composite, the NASDAQ Composite, and the Russell 2000. Regardless, the story remains the same, it was generally an inconsequential week, with all of the averages ending the week within spitting distance of where they began it.

Only three of the 100+ stocks I track will be going ex-dividend this week, as follows:

Gladstone Investment (GAIN), ex-dividend 10/21/2019, yield 6.51%. GAIN pays monthly. The yield looks pretty good until you realize it used to be well over 10%, compliments of a near-doubling of the share price since January 2016. Long story short, investors at today’s price will be going in at an all-time high price, not a Ben Graham value price.

Colgate Palmolive (CL), ex-dividend 10/22/2019, yield 2.53%. The sub-3% yield is about what you can expect these days from a solid blue-chip stock like CL.  

Senior Housing Properties Trust (SNH), ex-dividend 10/25/2019, yield 6.39%. SNH is on my Tier4 “No Longer Recommended” list, following a major dividend cut and a decline into the single digits, but per my practice, will continue to be reported as long as it is trading. The yield looks good, until you realize it is because of the afore-mentioned price decline, and the continuation of payments is by no means guaranteed.

Two of the fifteen CEFs I follow will be going ex-dividend this coming week, listed below. Both are monthly payers.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), ex-dividend 10/23/2019, yield 8.44%.

Miller Howard High Income Equity Fund (HIE), ex-dividend 10/24/2019, yield 12.23%. The yield on HIE is very attractive right now, but the sustainability has to be questioned. But I see no reason to sell at this point.

Earnings season is now under way, with a number of my stocks scheduled to report next week, as listed following, by date.

10/22/2019

Kimberly Clark (KMB), McDonalds (MCD), NextEra Energy (NEE), Nucor (NUE), Procter & Gamble (PG), United Parcel Service (UPS), Novartis A G (NVS).

10/23/2019

Blackstone Group (BX), Freeport McMoRan (FCX), Washington Prime Group (WPG).

10/24/2019

3M Co (MMM), American Electric Power (AEP), Hershey Co (HSY), Kimco Realty (KIM), Intel (INTC), Washington Real Estate Investment Trust (WRE).

10/25/2019

Ventas (VTR), Verizon (VZ).

I could just post a note saying, “refer to my previous closing comments”, as my thinking is as presented last week, as well as many of the weeks prior to that. But the present situation underscores a truism in the markets, in that a clearly unsustainable situation can in fact be sustained far longer than anyone expects. And we all have to continue living in the meantime. No doubt, when “Armageddon” arrives, I will regret not having sold a few holdings sooner, but in the meantime, I need the income, so as long as a steady payer continues to pay me, I plan to hold onto my position. The key here is to compromise with yourself, and have some alternative positions on, plus more cash than usual, to at least be partially ready, if things really fall apart.

JT

The volatility continues, the week just ended posted a net gain for the week on all the major averages, but only after declining Monday and Tuesday, then gaining it all back and more by the end of Friday. Even as the US political wars continue to escalate, investors were encouraged by Fed comments, and then a late-breaking partial trade agreement with China on Friday boosted stocks into the Friday close.  

Again, the ex-dividend lineup on the stocks I follow is minimal for the coming week, as follows:

Procter & Gamble (PG), ex-dividend 10/17/2019, yield 2.45%.

Main Street Capital (MAIN), ex-dividend 10/17/2019, yield 5.85%. MAIN pays monthly.

Horizon Technology Finance (HRZN), ex-dividend 10/17/2019, yield 10.16%. HRZN is another monthly payer.

Gladstone Investment (GAIN), ex-dividend 10/21/2019, yield 6.61%. GAIN also pays monthly.

Five of the fifteen CEFs I follow will be going ex-dividend this coming week, listed below. All are monthly payers.

Cohen & Steers MLP Income & Energy Opportunity Fund (MIE), ex-dividend 10/15/2019, yield 11.20%.

Cohen & Steers Quality Income Realty Fund, Inc. (RQI), ex-dividend 10/15/2019, yield 6.15%.

CBRE Clarion Global Real Estate Income Fund (IGR), ex-dividend 10/18/2019, yield 7.60%.

Gabelli Utility Trust (GUT), ex-dividend 10/16/2019, yield 8.01%.

Gabelli Dividend & Income Trust (GDV), ex-dividend 10/16/2019, yield 6.43%.

Earnings season for the third quarter of 2019 is upon us, or at least starting up. Five of the stocks I follow are scheduled to report next week, as follows.

Johnson & Johnson (JNJ), on 10/15/2019.

Crown Castle International (CCI), on 10/16/2019.

Kinder Morgan (KMI), on 10/16/2019.

Phillip Morris (PM), on 10/17/2019.

Coca Cola (KO), on 10/18/2019.

Following are upgrades / downgrades and so on regarding my stocks over the past week, as posted by E*Trade. To repeat myself from last week, there was less activity than usual last week, as there wasn’t much happening in the economy and the markets, all attention was focused on the circus in DC.

NextEra Energy Partners LP (NEP) was upgraded from Equal Weight to OverWeight at Barclays.

HCP Inc (HCP) was upgraded from Neutral to OverWeight at JP Morgan.

Spirit Realty Capital (SRC) was upgraded from Sector Perform to OutPerform at RBC Capital Markets.

NGL Energy Partners (NGL) was downgraded from Buy to Neutral at UBS.

Blackstone Group (BX) was initiated at Market Perform at BMO Capital Markets.

Freeport McMoRan (FCX) was reiterated at Buy at B. Riley FBR.

Freeport McMoRan (FCX) was upgraded from Neutral to Buy at UBS.

Cisco Systems was downgraded from Buy to Neutral at Goldman.

MFA Financial (MFA) was initiated at OutPerform at Wedbush.

Realty Income (O) was initiated at Buy at Jeffries.

Barrick Gold (GOLD) was upgraded from Hold to Buy at Canaccord Genuity.

GlaxoSmithKline (GSK) was upgraded from Hold to Buy at Cantor Fitzgerald.

Johnson & Johnson (JNJ) was initiated at Buy at Deutsche Bank.

My closing comments are becoming monotonous, my thinking hasn’t changed in quite a while. The market is overdue for a decline, the political stability of America, long a strength of this nation, is but a distant memory, the dramatic increase in the national debt and the failure of our so-called “leaders” to address our unsustainable entitlement programs, all point to an economic day of reckoning. But no one knows when it will arrive. But better to get prepared early, and sit on your hands for a time, than too late. I’m selling out of positions selectively, conserving cash, adding to positions in alternative investments, gold and silver, holding on to positions that are paying out at a generous yield, and just trying to be ready.  

JT

Stocks ended the week again with a net decline on all the major averages, but only barely, thanks to Thursday and Friday being up days, which recovered a good bit of the losses from Tuesday and Wednesday. The “impeachment” which has never been authorized by a vote of the full House continues, with about the only positive development being the Democrat’s apparent decision to “throw Biden under the bus”, if that is the price of getting Trump. A new low on the unemployment rate released on Friday helped calm the markets, for the moment, at least.

Also similar to last week, the ex-dividend lineup on the stocks I follow is minimal for the coming week, as follows:

Verizon (VZ), ex-dividend 10/9/2019, yield 4.17%.

AT&T (T), ex-dividend 10/9/2019, yield 5.49%.

Darden Restaurants (DRI), ex-dividend 10/9/2019, yield 3.05%.

General Mills (GIS), ex-dividend 10/9/2019, yield 3.67%.

Mid-America Apartment Communities (MAA), ex-dividend 10/11/2019, yield 2.93%.

Freeport McMoRan (FCX), ex-dividend 10/11/2019, yield 2.26%. While this is a precious metals play, the dividend is almost respectable.

CEFs on my list of 15 going ex-dividend this week are as follows:

BlackRock Debt Strategies Fund (DSU), ex-dividend 10/11/2019, yield 7.73%.

BlackRock Enhanced Equity Dividend Trust (BDJ), ex-dividend 10/11/2019, yield 6.52%.

Nuveen Real Asset Income and Growth Fund (JRI), ex-dividend 10/11/2019, yield 7.27%.

BlackRock Energy and Resources Trust (BGR), ex-dividend 10/11/2019, yield 8.51%.

None of my stocks will be reporting earnings next week.

Rounding out my recap, following are upgrades / downgrades and so on regarding my stocks over the past week, as posted by E*Trade. Again, there was less activity than usual last week, as there wasn’t much happening in the economy and the markets, all attention was focused on the circus in DC.

Emerson Electric (EMR) was upgraded from Sector Perform to OutPerform at RBC Capital Markets.

Phillip Morris (PM) was upgraded from Neutral to Buy at Bank of America.

Welltower (WELL) was downgraded from OverWeight to Equal Weight at Barclays.

Blackstone Group was initiated at OutPerform at Wells Fargo.

Royal Dutch Shell (RDS.A, RDS.B) was downgraded from Buy to Hold at ABN Amro.

Kinder Morgan (KMI) was initiated at Buy at TD Securities.

William Companies (WMB) was initiated at Buy at TD Securities.

Newmont Mining (NEM) was upgraded from Hold to Buy at Deutsche Bank.

AGNC Investment (AGNC) was initiated at Sector Perform at RBC Capital Markets.

Annaly Capital Management (NLY), Chimera Investment (CIM), and MFA Financial (MFA) were all initiated at OutPerform at RBC Capital Markets.

3m Co (MMM) was reiterated at UnderWeight at Barclays.  

Barrick Gold (GOLD) was initiated at OutPerform at National Park Financial.

Pepsico (PEP) was reiterated at Market Perform at BMO Capital.

The general consensus is that the economic environment is deteriorating, the market is mostly over-priced, and that now is not a good time to buy. I have to concur, my strategy is to keep what I have that is paying out at a decent yield, conserve cash, and be prepared for a market storm that is probably coming, although no one knows when.

JT

Stocks ended the week with a net decline on all the major averages, with a bit more volatility than the prior week. The latest Democrat impeachment outrage contributed to the sense of unease of investors, but not unduly so. It seems we have almost become inured to the continuing saga of our failing political system, where meaningful progress on our festering problems has become impossible, as all energies in Washington are expended on the all-out war between the two major political parties, and compromise has become synonymous with betrayal.

I can’t think of a better investment strategy than investing for income in times like these, as my dividend payers continue paying out, regardless of the gridlock in Washington. That said, the ex-dividend lineup is minimal next week, as follows:

Ventas (VTR), ex-dividend date 9/30/2019, yield 4.30%.

Realty Income (O), ex-dividend date 9/30/2019, yield 3.52%. O pays monthly.

Kimco Realty (KIM), ex-dividend date 10/01/2019, yield 5.39%.

Cisco Systems (CSCO), ex-dividend date 10/03/2019, yield 2.87%.

Universal (UVV), ex-dividend date 10/04/2019, yield 5.54%.

Two of the fifteen CEFs I follow will be going ex-dividend next week, both are monthly payers:

First Trust Intermediate Duration Preferred & Income Fund (FPF), ex-dividend date 10/01/2019, yield 6.77%.

AllianceBernstein Global High Income Fund (AWF), ex-dividend date 10/03/2019, yield 6.78%.

Three of my stocks will be reporting earnings next week, as follows:

Paychex (PAYX), on 10/02/2019.  

RPM International (RPM), also on 10/02/2019.

Pepsico (PEP), 10/03/2019.

Rounding out my recap, following are upgrades / downgrades and so on regarding my stocks over the past week, as posted by E*Trade. Again, there was less activity than usual last week, as there wasn’t much happening in the economy and the markets.

Sanofi (SNY) was upgraded from Equal Weight to Overweight at Morgan Stanley. Perhaps Morgan Stanley believes a French drug company will be immune from the pressures on drug pricing, or that the gridlock in Washington will stymie any actions affecting SNY.

Kimberly Clark (KMB) was upgraded from Equal Weight to OverWeight at Barclays.

Sanofi (SNY) was upgraded from Neutral to Buy at Guggenheim.

Noble Corp PLC (NE) was downgraded from Neutral to Sell at Citigroup. I gave up on NE and the rest of the offshore drillers a year or more ago, even if they survive, they are unlikely to ever regain the stature that they had prior to the oil price crash of 2016.

Main Street Capital (MAIN) was initiated at Neutral at National Securities. MAIN may be the “blue chip” BDC, but keep in mind, no BDC is really a “blue chip”. Heck, these days, I wonder if any stock is truly a “blue chip”.

Blackstone Group (BX) was reiterated at Buy at Bank of America, and initiated at OutPerform at Oppenheimer.

Park Hotels Resorts (PK) was initiated at UnderWeight at JP Morgan.

Nestle S A (NSRGY) was downgraded from Sector Perform to UnderPerform at RBC Capital Markets.

Noble Corp PLC (NE) was downgraded from Outperform to Sector Perform at RBC Capital Markets.

Transocean (RIG) was also downgraded from Outperform to Sector Perform at RBC Capital Markets. See comment above on NE, the same applies to RIG.

Enerplus (ERF) was upgraded from Equal Weight to OverWeight at Capital One. This once-stalwart dividend-paying Canadian Trust has been consigned to my Tier4 list, along with the offshore drillers, as I don’t see the Canadian oil producers ever returning to the glory days prior to the elimination of the favorable tax treatment they enjoyed before the Canadian government tax changes of 2006.

Park Hotels Resorts (PK) was initiated at OverWeight at Barclays.

The only action I took this past week was adding to my position in Energy Transfer LP (ET), as it declined to my lo-ball price of $13.25, and then declined a little more, closing Friday at $13.10. ET will be going ex-dividend sometime during the next two weeks, and based on the latest price, yields over 9%. My holding is now maxed out, my rules won’t let me buy more, no matter how low it goes. But from everything I have seen regarding ET, I believe it represents a rare bargain at today’s price. The next few acts of the circus in Washington may yield some more buy opportunities in the weeks ahead, as the political climate continues to worsen, and the market becomes spooked more than we have seen so far.

JT