Stocks ended the week Friday with gains for the week on all the averages I track, aided by substantial up days on Monday and Friday. The question now is whether this is just another bear market rally, or the start of a recovery. The US mid-term elections will dominate the news for the next two weeks plus, but investors will also be paying attention to the earnings news, as we get into the thick of earnings season.

The stocks I follow going ex-dividend next week through October 31 are listed following. The ex-dividend date and current annualized yield are presented for each stock. Assume frequency is quarterly unless otherwise indicated. 

Prospect Capital (PSEC), 10/26/2022, 10.36%. PSEC pays monthly.

AGNC Investment (AGNC), 10/28/2022, 18.39%. AGNC also pays monthly.

STAG Industrial (STAG), 10/28/2022, 5.20%. STAG is another monthly payer.

Tanger Factory Outlet Centers (SKT), 10/28/2022, 5.38%.

Kinder Morgan (KMI), 10/28/2022, 6.48%.

Enterprise Products Partners L P (EPD), 10/28/2022, 7.60%.

Plains All American Pipeline L P (PAA), 10/28/2022, 7.46%.

ONEOK (OKE), 10/31/2022, 6.61%.

Realty Income (O), 10/31/2022, 5.18%. O pays monthly.

None of the 17 CEFs I follow will be going ex-dividend next week.

Earnings reporting is now well under way. Firms I track that will be reporting next week are listed below, by date.

10/24/2022

AGNC Investment (AGNC).

10/25/2022

3M Co (MMM), Ares Capital (ARCC), Coca Cola (KO), Kimberly Clark (KMB), United Parcel Service (UPS).

10/26/2022

Kraft Heinz Co (KHC), Annaly Capital Management (NLY).

10/27/2022

Altria (MO), American Electric Power (AEP), Kimco Realty (KIM), Magellan Midstream Partners L P (MMP), McDonalds (MCD), Medical Properties Trust (MPW), Southern Co (SO), Intel (INTC), STAG Industrial (STAG), VICI Properties (VICI).

10/28/2022

Chevron (CVX), Exxon Mobil (XOM), Colgate Palmolive (CL).

Ratings changes on my stocks over the past week are listed following, as per Etrade, my source.

Enterprise Products Partners L P (EPD) was downgraded from Buy to Hold at Tudor Pickering.

Johnson & Johnson (JNJ) was initiated at OverWeight at Barclays.

Kimberly Clark (KMB) was initiated at Inline at Evercore ISI.

Exxon Mobil (XOM) was upgraded from Hold to Buy at Jeffries.

Chevron (CVX) was initiated at Hold at Jeffries.

McDonalds (MCD) was reiterated at OutPerform at Credit Suisse.

Southern Co (SO) was upgraded from Sector Weight to OverWeight at KeyBanc.

Alliant Energy (LNT) was downgraded from OutPerform to Peer Perform at Wolfe.

Spirit Realty Capital (SRC) was initiated at Perform (whatever that means) at Oppenheimer.

AT&T (T) was upgraded from Hold to Buy at Truist.

Now, while we are at a market pause, more or less, is a good time to review the prices available and get prepared to make additional buys, or even start new positions, on quality stocks that have come down substantially from their highs. It can’t be a bad thing to acquire a quality stock at a price below where it has been for the past 3 or more years, with a yield of 4% or more, even if it drops further before this bear market is over. Acquiring at the exact bottom would be great, but not likely. Don’t let this buy opportunity pass without buying anything, if you haven’t already. Waiting on even better prices could be a mistake, if the U-turn we saw last week takes hold. You can always add to a position later on if a better price comes available, assuming the investing thesis of the stock has not changed.

JT

The most representative index for me, based on the stocks I follow, is the S and P 500. Last week it had moderate declines the first three days of the week. On Thursday, a disappointing CPI report before the open was an ominous sign that a major downswing was coming that day. Indeed, it started out that way, as the index opened considerably below the prior close, and proceeded down from there. But after about an hour, as the index set a new low from its post-Covid high in January, buyers rushed in to take advantage of the many bargains. By day’s end, we had seen a monster rally, ending up 92 points on the index. The more commonly tracked Dow Industrials index, as least as far as the public is concerned, had an advance of 827 points. Was a new rally starting? Apparently not, as Friday yielded a decline in the S&P 500, giving back over 90% of Thursday’s gain. What will the new week bring? No one knows, so the best plan is to have a plan for all possible scenarios, a down day, an up day, or a day of minimal movement either way.

Meanwhile, the stocks I follow going ex-dividend next week through October 24 are listed following. The ex-dividend date and current annualized yield are presented for each stock. Assume frequency is quarterly unless otherwise indicated. 

PennantPark Floating Rate Capital (PFLT), 10/17/2022, 11.07%. PFLT pays monthly.

Horizon Technology Finance (HRZN), 10/17/2022, 11.35%. HRZN also pays monthly.

SLR Investment (SLRC), 10/19/2022, 12.50%. SLRC is another monthly payer.

Gladstone Investment (GAIN), 10/20/2022, 7.85%. You guessed it, GAIN is a monthly payer.  

Procter & Gamble (PG), 10/20/2022, 2.92%.

Colgate Palmolive (CL), 10/20/2022, 2.64%.

As with last week, not much dividend action this week.

Four of the 17 CEF’s I follow will be going ex-dividend next week, all are monthly payers.

CBRE Global Real Estate Income Fund (IGR), 10/19/2022, 12.45%.

Tekla Healthcare Opportunities Fund (THQ), 10/19/2022, 7.29%.

Miller/Howard High Income Equity Fund (HIE), 10/21/2022, 6.46%.

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY), 10/21/2022, 9.86%.

Earnings season for the 2022 3rd Quarter is starting, 7 of my stocks will be reporting next week.

Johnson & Johnson (JNJ), on 10/18/2022.

Proctor & Gamble (PG), on 10/19/2022.

Kinder Morgan (KMI), on 10/19/2022.

AT&T (T), on 10/20/2022.

Freeport-McMoRan (FCX), on 10/20/2022.

Phillip Morris (PM), on 10/20/2022.

Verizon (VZ), on 10/21/2022.

Ratings changes on my stocks over the past week are listed following, as per Etrade, my source.

Kraft Heinz (KHC) was upgraded from Neutral to Buy at Goldman.

Omega Healthcare Investors (OHI) was downgraded from OutPerform to Neutral at Baird.

Proctor & Gamble (PG) was downgraded from Buy to Neutral at Goldman.

Ventas (VTR) and Welltower (WELL) were both downgraded from OutPerform to Neutral at Baird.

Algonquin Power & Utilities (AQN) was upgraded from Neutral to OutPerform at Credit Suisse.

Coca Cola (KO) was initiated at OutPerform at Wolfe.

Pepsico (PEP) was initiated at OutPerform at Wedbush.

Kimberly Clark (KMB) was upgraded from Neutral to OverWeight at Atlantic Equities.

Oaktree Specialty Lending (OCSL) was initiated at Buy at B. Riley.

Coca Cola (KO) was reiterated at Hold at Deutsche Bank.

Johnson & Johnson (JNJ) was reiterated at Neutral at Bank of America.

I added to several positions again last week. Now is the time to be paying attention, there are many attractive buy prices available. My plan is based on prices available on stocks (including preferreds, ETFs, and CEFs) I’m following, not on the movement of the indexes. I have a buy price set for up to 30 or so securities, and if I can get filled at or below my desired price, I will put in a limit order. I only buy an incremental number of shares at a time, always keeping my options open in case better prices appear later on. Once I have started a position, I will add to it if lower prices come available, up to a maximum for any one position. If I really believe in the stock, I may go (slightly) above my pre-defined maximum for any one position, but not by much. I still believe the market rout is not over, but I suspect we are closer to the end than the beginning. At least, I hope so. But if not, I am keeping some “dry powder” handy in case even better prices come available, as we move through the fall and into year-end.

JT

Last week was a tale of two extremes, with a record setting two day upsurge on Monday and Tuesday, and a three day downturn the next three days. Even though the net result for the week was a small net gain, the fact that nearly all of the two day advance was given back has definitely put a damper on things.

The stocks I follow going ex-dividend next week through October 17 are listed following. The ex-dividend date and current annualized yield are presented for each stock. Assume frequency is quarterly unless otherwise indicated. 

Freeport-McMoRan (FCX), 10/13/2022, 2.01%.

PennantPark Floating Rate Capital (PFLT), 10/17/2022, 11.53%. PFLT pays monthly.

Horizon Technology Finance (HRZN), 10/17/2022, 11.83%. HRZN also pays monthly.  

That’s it, not much dividend action this week.

Eight of the 17 CEF’s I follow will be going ex-dividend next week, all are monthly payers.

Cohen & Steers Quality Income Realty Fund (RQI), 10/11/2022, 8.31%.

Cohen & Steers Total Return Realty Fund (RFI), 10/11/2022, 7.31%.

BlackRock Debt Strategies Fund (DSU), 10/13/2022, 8.09%. 

BlackRock Enhanced Equity Dividend Trust (BDJ), 10/13/2022, 9.82.

Nuveen Real Asset Income and Growth Fund (JRI), 10/13/2022, 10.09%.

BlackRock Energy and Resources Trust (BGR), 10/13/2022, 4.47%.

Gabelli Utility Trust (GUT), 10/14/2022, 8.58%.

Gabelli Dividend & Income Trust (GDV), 10/14/2022, 6.81%.

Only one of my stocks will be reporting next week, Pepsico (PEP), on 10/11/2022.

Ratings changes on my stocks over the past week are listed following, as per Etrade, my source.

Alliant Energy (LNT) was initiated at Neutral at Credit Suisse.

Lumen Technologies (LUMN) was downgraded from OverWeight to Equal Weight at Wells Fargo.

Horizon Technology Finance (HRZN) was initiated at Neutral at Janney Capital.

Verizon (VZ) was upgraded from Perform to OutPerform at Oppenheimer.

Freeport-McMoRan (FCX) was downgraded from OutPerform to Neutral at Exane BNP Paribas.

Global Medical REIT (GMRE) was downgraded from OutPerform to Market Perform at BMO Capital.

Algonquin Power & Utilities (AQN) was upgraded from Sector Perform to OutPerform at National Bank Financial.

I added to some positions Friday, as attractive prices came into view. I would describe my approach as selective buying at this point. With further declines likely, now is not a time to “buy with both hands”. For new positions, I establish a small starter position, and add to it if prices decline further. The downturn could end at any time, but like most pundits, I don’t think it is over, I’m expecting even better buys in the coming days.

JT

Stocks declined four of the five days last week, and even with a significant rebound on Wednesday, still posted a loss overall for the week, as the declines totaled roughly three times more than the lone up day. Long story short, the “bear” has returned, and the S&P 500 index closed Friday below the prior low of June 17, 2022.

The stocks I follow going ex-dividend next week through October 10 are listed following. The ex-dividend date and current annualized yield are presented for each stock. Assume frequency is quarterly unless otherwise indicated. 

Rithm Capital (RITM, formerly NRZ), 10/3/2022, 13.79%.

Cisco Systems (CSCO), 10/4/2022, 3.75%.

Main Street Capital (MAIN), 10/6/2022, 7.94%. MAIN is a monthly payer.

AT&T (T), 10/6/2022, 5.42%.

General Mills (GIS), 10/6/2022, 2.78%.

Verizon (VZ), 10/6/2022, 6.75%.

Universal (UVV), 10/6/2022, 6.73%.

OGE Energy (OGE), 10/7/2022, 4.43%.

Only two of the 17 CEF’s I follow will be going ex-dividend next week, both are monthly payers.

First Trust Intermediate Duration Preferred & Income Fund (FPF), ex-dividend date 10/3/2022, yield 8.97%.

AllianceBernstein Global High Income Fund, Inc. (AWF), ex-dividend date10/6/2022, yield 8.77%.

None of my stocks will be reporting next week.

Ratings changes on my stocks over the past week are listed following, as per Etrade, my source.

Unilever PLC (UL) was upgraded from Hold to Buy at Berenberg.

Pepsico (PEP) was reiterated at Hold at Deutsche Bank.

HealthPeak Properties (PEAK) was upgraded from Peer Perform to OutPerform at Wolfe Research.

Phillip Morris (PM) was initiated at Neutral at Credit Suisse.

MPLX LP (MPLX) was downgraded from Buy to UnderPerform at Bank of America.

Unilever (UL) was initiated at Equal Weight at Morgan Stanley.

Rithm Capiital (RITM) was upgraded from UnderWeight to Neutral at Piper Sandler.  

As noted in the intro, the market has now declined to its lowest reading yet since the post-Covid highs of January. Specifically, the S&P 500 has now closed 25.6% below the high set on January 4, 2022. I had a number of orders get filled last week. I don’t believe the declines are finished, I’m expecting more buy opportunities will appear in the weeks ahead. Now is a good time to start buying. No one knows when the declines will end, my recommendation is to start buying, but save some “dry powder” in case the market continues to decline in the weeks ahead.

JT

Stocks rose modestly on Monday, and that was it for the week, as the remaining four days saw major declines, bringing the averages close to the mid-June lows. The Fed raised interest rates on Wednesday, but that was expected. It was the Fed Chair’s comments, as the announcement was made, promising more raises will be coming, that sent the markets into a funk. 

The stocks I follow going ex-dividend next week through October 3rd are listed following. The ex-dividend date and current annualized yield are presented for each stock. Assume frequency is quarterly unless otherwise indicated. 

Phillip Morris (PM), 9/27/2022, 5.53%.

Prospect Capital (PSEC), 9/27/2022, 10.64%. PSEC pays monthly.

Algonquin Power (AQN), 9/28/2022, 5.79%.

AGNC Investment (AGNC), 9/29/2022, 13.37%. AGNC pays monthly.

Spirit Realty Capital (SRC), 9/29/2022, 6.70%.

Trinity Capital (TRIN), 9/29/2022, 12.83%.

Stag Industrial (STAG), 9/29/2022, 4.91%. STAG is a monthly payer.

Park Hotels & Resorts (PK), 9/29/2022, 0.34%.

Store Capital (STOR), 9/29/2022, 5.17%. STOR is being taken private, at a price $5 over where it was trading when the announcement came out. The buyout price is $32.25 per share, and the stock is now trading close to that figure. Holders of STOR are not complaining.

Ladder Capital (LADR), 9/29/2022, 8.47%.

Goldman Sachs BDC (GSBD), 9/29/2022, 11.04%.

Annaly Capital Management (NLY), 9/29/2022, 15.57%. NLY will be implementing a 1:4 split over the weekend, but surprisingly, the dividend will be increased by a factor of 4, maintaining the payout. The holders of NLY, thus far, are not losing anything because of the split.

Chimera Investment (CIM), 9/29/2022, 13.45%. CIM reduced the dividend, announced after the close on Wednesday, causing the stock to decline into the single digits.

Owl Rock Capital (ORCC), 9/29/2022, 10.79%.

Ventas (VTR), 9/30/2022, 4.04%.

Realty Income (O), 9/30/2022, 4.76%. O pays monthly.

Only two of the 17 CEF’s I follow will be going ex-dividend next week, both are monthly payers.

First Trust Intermediate Duration Preferred & Income Fund (FPF), ex-dividend date 10/3/2022, yield 8.73%.

AllianceBernstein Global High Income Fund, Inc. (AWF), ex-dividend date not yet available, but expected to be 10/3/2022, yield is 8.34%.

None of my stocks will be reporting next week.

Ratings changes on my stocks over the past week are listed following, as per Etrade, my source.

Goldman Sachs BDC (GSBD) was resumed at Neutral at Bank of America.

Cisco Systems (CSCO) was downgraded from OverWeight to Equal Weight at Wells Fargo.

Prudential Financial (PRU) was initiated at Strong Buy at Raymond James.

Digital Realty (DLR) was downgraded from Equal Weight to UnderWeight at Barclays.

McDonalds (MCD) was initiated at OverWeight at Stephens.

While I track several averages, the most representative index I follow is the S&P 500. The low point for this index, after the January highs, was 3636 on June 17, a 24.5% decline from the post-Covid high in January. After that, we had a modest summer rally, which now seems to have ended in September. The index closed Friday at 3693, a 23.3% decline from the post-Covid high. Long story short, we are now effectively back to the June lows. My “trigger” to begin deploying capital seriously is when the decline reaches 30%. That may be coming in October. As the saying goes, “get your popcorn ready, this show should get interesting”.

JT