| Company | Cost Basis | Shares | Yield | Total Value | Return |
|---|---|---|---|---|---|
| Southern | $39.71 | 25.0818 | 4.3% | $1,159.28 | 16.4% |
| Exelon | $41.36 | 28.818 | 3.5% | $1,025.92 | (13.9%) |
| National Grid | $48.90 | 20.3693 | 5.7% | $1,287.95 | 29.3% |
| Philip Morris International Inc. (NYSE:PM) | $68.49 | 14.5429 | 3.6% | $1,362.82 | 36.8% |
| Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) | $44.93 | 24.7 | 4.5% | $1,078.16 | (2.8%) |
| Plum Creek Timber | $38.42 | 26 | 3.4% | $1,353.82 | 35.5% |
| Brookfield Infrastructure Partners L.P. (NYSE:BIP) | $26.12 | 38.2825 | 4.6% | $1,448.23 | 44.8% |
| Vodafone Group Plc (ADR) (NASDAQ:VOD) | $26.75 | 56.7566 | 5.3% | $1,694.75 | 11.6% |
| Seaspan | $15.24 | 95 | 5.7% | $2,200.20 | 52% |
| AT&T | $35.20 | 28.4 | 4.8% | $1,060.17 | 6.1% |
| Retail Opportunity Investments | $12.20 | 81.95 | 3.9% | $1,251.38 | 25.2% |
| Annaly Capital Management, Inc. (NYSE:NLY) Preferred D | $25.98 | 38.9 | 7.2% | $1,012.96 | 2.1% |
| Cash | $330.37 | ||||
| Dividends Receivable | $12.73 | ||||
| Original Investment | $12,983.97 | ||||
| Total Portfolio | $16,278.73 | 25.4% | |||
| Investment in SPY (Including Dividends) | 24.9% | ||||
| Relative Performance (Percentage Points) | 0.5 |
Source: Capital IQ, a division of Standard & Poor’s.
The portfolio continued to perform strongly since last week. Cumulative performance is now at 25.4%, up 0.5 percentage points from before. However, we slipped against the S&P, from 2.5 down to 0.5. As usual, when the S&P goes up, the portfolio does, too, but less. So we lose ground in up markets usually. I’m continuing to hold dividends in cash — better than a half-year’s worth — waiting for an excellent opportunity. I’ve been holding more cash than I normally would expecting a downturn after the runaway start to the markets this year.
The blended yield is down to 4.7%, and we have more than $300 in cash in the portfolio. May is one of the big months for dividends around here, too, so more money will be rolling in shortly.
In June, I’m going to add $2,000 in cash to the portfolio, adding money to my stash to mimic what an investor might do annually. In addition, I’ll add at least two new positions, and I expect to sell at least one. As I asked last week, do you have any good dividend stocks to buy or ones from the portfolio to sell? Let me know in the comments box below. Thanks for the suggestions so far.
Brookfield Infrastructure is raising as much $341 million in capital by issuing new units to investors. The proceeds will initially be used to repay debt owed under Brookfield’s credit facility, before the partnership extracts that cash for further investments. So I’d keep my eyes peeled for another infrastructure investment coming up.
Philip Morris International Inc. (NYSE:PM) held its annual meeting this week and reiterated its performance goals for 2013. The company expects most of its earnings growth to occur in the second half of the year, in particular the fourth quarter. The CEO reaffirmed earnings guidance of $5.55 to $5.65 per share, compared with $5.17 per share in 2012. At the midpoint that’s 8% growth and implies a forward P/E of 16.7 — not too expensive for the type of consistent performance and rising dividends that the company produces. The company expects to lose about $0.19 per share in 2013 because of unfavorable currency impacts.
While Annaly Capital Management, Inc. (NYSE:NLY)’s common stock has sunk in recent weeks, its preferred stocks, Annaly Series C and Series D, have actually risen substantially above par. On Thursday’s close, Series C traded at $26.40 and Series D at $26.04 — both notably above their $25 par price. These are some of the highest-yielding preferreds on the market and the last to rise, following the trend of high-yield preferreds trading for 8%-12% above par. As these and other preferreds approach their call date, however, their price will come back down to par. That will be a while yet for the Annaly Capital Management, Inc. (NYSE:NLY) preferreds, since they were issued just last year. If the market remains fixated on yield, they could easily reach $27 per share and sit there for a few years. At that kind of price, I’d be tempted to sell.
The Vodafone-Verizon Communications Inc. (NYSE:VZ) saga continues. Verizon Communications Inc. (NYSE:VZ) said the priority for Verizon Wireless’ cash is to pay down $5 billion in debt that matures next year, rather than pay out dividends. Investors took that as a thinly veiled threat to cut off the U.K. telecom from a payout from its 45% stake in Verizon Wireless.
Verizon Communications Inc. (NYSE:VZ) continues to want to own all of Wireless but doesn’t want to pay up for the privilege. With Verizon now trading at 8 times EBITDA, I don’t see how CEO Lowell McAdam thinks he can pay less than that for the best component of his business, and it should be more. And now he wants to pay down debt at Wireless when interest rates are at all-time low? That’s ridiculous. He should be borrowing hand over fist and locking in historically low rates — vital for a capital-intensive industry like telecom.
