NLY is doing well

[fenders53]

(05-20-2021, 12:34 PM)ken-do-nim Wrote:

(05-20-2021, 11:28 AM)fenders53 Wrote: NEE can't be right.  May have missed split.

Oh I can see from the chart the website most certainly did.

I figured as much.  NEE has been flat lately but it was on fire for years.  I bet it's in the top 10-15% for large CAP performance for the last decade.  Close enough anyway and certainly not a laggard.

[ken-do-nim]

NEE is up at $67,456.76 adjusted for the split, still second to CP!

[fenders53]

(05-20-2021, 12:50 PM)ken-do-nim Wrote: NEE is up at $67,456.76 adjusted for the split, still second to CP!

The rails seem to defy logic at first.  It's not that they grow all that fast or the just OK dividend.  Next time you are stuck at a crossing waiting for a freight train, just imagine how much money is rolling by.  It's not that any individual rail has a monopoly, the FTC keeps that in check.  The industry has a huge MOAT.  Try to start up a new railroad and you'll be waiting ten years to break even.  The cycle will probably end and you are BK.  They haul volumes that nobody else can efficiently.  Sorry I ignored them for years because they are boring.  Berkshire didn't.

[EricL]

(05-20-2021, 01:02 PM)fenders53 Wrote:

(05-20-2021, 12:50 PM)ken-do-nim Wrote: NEE is up at $67,456.76 adjusted for the split, still second to CP!

The rails seem to defy logic at first.  It's not that they grow all that fast or the just OK dividend.  Next time you are stuck at a crossing waiting for a freight train, just imagine how much money is rolling by.  It's not that any individual rail has a monopoly, the FTC keeps that in check.  The industry has a huge MOAT.  Try to start up a new railroad and you'll be waiting ten years to break even.  The cycle will probably end and you are BK.  They haul volumes that nobody else can efficiently.  Sorry I ignored them for years because they are boring.  Berkshire didn't.

Railroads have pricing power and the ultimate moats since no new railroads are being built. They essentially have local monopolies and national ogilopolies.

They have strong consistent cash flows and use them to retire shares relentlessly.

Over the past 15 years, UNP, CSX, and NSC have all reduced share count by at least 1/3, with CSX leading the way a 45% reduction in shares outstanding.

   

[ken-do-nim]

I think it's clearly a priority I get these 4 companies into my portfolio ASAP.

[fenders53]

(05-20-2021, 02:17 PM)ken-do-nim Wrote: I think it's clearly a priority I get these 4 companies into my portfolio ASAP.

Or............ maybe we can't own everything but this is a very good sector so you need a presence.  They mostly run together with the industry outlook anyway.  Pick a couple and start a position at whatever price.  They will continue to be expensive as long as the economy is rebounding.  Add a share or two every month or so.  The day will come they have a mediocre quarter and you get a 10% off sale. When I first started my growthy port Eric suggested UNP and weeks later it dipped sub 180.  I didn't buy enough but lesson learned.  Rails are not a stock you look at two months after purchase and assess.  It can be that part of your port you just build and don't stress it.  I know I need some of that with all the exciting stuff I got going on.  AG prices are sky high and the rails will get their piece of that this fall.  I am really hoping the overall market dips and I get a chance to add.  If not I will nibble until that day comes.  They will fall back at some point and that is when you add like you mean it. They will always be very cyclical.

[ken-do-nim]

Heh, before we can talk about diving in and scooping up a lot, vs. nibbling, I need new money to buy additional. So for now just wishful thinking, and I do have exposure to the sector in TPOR.

Yeah, I'll be a lot more active in the "What did you buy today" thread after child support payments end, but that's a long ways away still. So for now, I get my investing money in chunks - bonus, 3 paycheck months, and when I dump company stock and move the proceeds over.

[ken-do-nim]

Btw, I just noticed that NLY's P/E ratio is ... 2.96. I don't think I've ever seen a company with one that low. Hopefully they will be raising the dividend soon.

Edit: I guess that's how these REITs are. OXLC's P/E is 2.56.

[fenders53]

(06-25-2021, 06:45 AM)ken-do-nim Wrote: Btw, I just noticed that NLY's P/E ratio is ... 2.96.  I don't think I've ever seen a company with one that low.  Hopefully they will be raising the dividend soon.

Edit: I guess that's how these REITs are.  OXLC's P/E is 2.56.

REIT PEs aren't significant.

[ken-do-nim]

Gotcha.

[fenders53]

(06-25-2021, 09:10 AM)ken-do-nim Wrote: Gotcha.

By law they are required to distribute about 90% of their cash flow.  I am no expert on them for sure.  I stick to the best ones as they likely survive the next real estate calamity or interest rate spike.  The good ones are somewhat of a hedge against your regular equity holdings as long as you don't over pay for your REITs.

[ChadR]

(06-25-2021, 09:19 AM)fenders53 Wrote:

(06-25-2021, 09:10 AM)ken-do-nim Wrote: Gotcha.

By law they are required to distribute about 90% of their cash flow.  I am no expert on them for sure.  I stick to the best ones as they likely survive the next real estate calamity or interest rate spike.  The good ones are somewhat of a hedge against your regular equity holdings as long as you don't over pay for your REITs.

They have to distribute 90% of their taxable income.  With depreciation, taxable income is very different from their cash flow.