OK, My Turn

[Dividend Watcher]

Was going to post in the "whatdidyoubuytoday?" thread but thought it would be easier to keep track of my stupid ideas if I just added to my own portfolio rambling.

So, today I added to my Helmerich & Payne (HP) holding when my standing limit order finally hit. Price just below my original cost basis so got to average down. 4Q14 earnings release out today and the results looked OK to me ... revenue and EPS bouncing up and down a little despite oil dropping like a rock and the majors cutting back on capital investments; still negligible debt to speak of and a reasonable payout ratio; their last dividend increase was about 10% despite the huge jumps over the last couple years so management must be confident of the their ability to come up with the cash; management is also willing to invest in a few more FlexRigs going forward so there's obviously a market there.

Also added a speculative play to the portfolio with a 0.8% allocation. That was in GILD. I was wondering why GILD, the darling stock of every addle-brained zealot on SA, was trading so poorly when it already has a successful portfolio of HIV drugs and now 2 treatments for HCV, Solvadi and Harvoni. Sure ABBV, JNJ & MRK (now bowed out of the game) may take some market share but the HCV problem is too big for that to make much of a difference. GILD's pipeline also has some interesting prospects for the further out future. With a trailing P/E hovering around 19 and the HCV battle just heating up, I believe there's a chance GILD will capture a lot of that and I should be able to capture some cap gains. I broke every rule in my portfolio business plan except for the P/E < 20 rule. I think there's an opportunity here if you can ignore the volatility and are willing to hold for a few years. As I said, this was to scratch my speculative itch.

[Dividend Watcher]

Well, now that GILD has said they'll pay a dividend, it moves off my hoping & praying list to a dividend-paying contributor. A little less speculative and I'll continue to hold this for longer than originally anticipated. I still believe their pipeline shows some promise. We'll have to watch further and see how 2015 shakes out.

Today I sold 20% of my PEP holdings at just over $100. The P/E is at the top of the fair range for me. They are still facing headwinds with currency, carbonated soda sales and activist investors still playing their games. If it weren't that PEP was over 9% of my portfolio and 10x the size of my smallest position, I may have held on. Now it's in the high 6% range and still over 5% of my dividend income. The bump in the dividend, which they said would start in June, will ameliorate some of the loss of income.

At 3% cash, I'm more cash flush than I've been in a while. Now I'm looking for suitable replacement(s). I also have a covered call out on AFL. If it exercises, I'll get to play around with some cash-secured puts and get back in at a lower price. I really needed to trim that also.

I have a limit order in for RY to get a little more exposure to the US and Canadian economies. R2R pointed out so nicely how much more foreign exposure BNS has to other markets.

Right now I'm thinking some JNJ or EMR. I really need to add to REITs and utes but not at these prices.

P.S. Someone please send the Correction Fairy so I'd feel better about putting that cash to work.

[Dividend Watcher]

Trimmed some 30% of my ROST on Friday. Trailing P/E of 22 is about the top of the range for me and a dividend yield of 0.8% is too low for me at this point. With a 60% gain, it had grown to be too large a part of the portfolio. I'll add that to my cash from the PEP sale a couple days ago and spend the weekend shopping. My cash position is now a little over 4%. Haven't seen that in a while.

ROST has a dividend increase coming up and they've added some new stores in under-represented regions. The picture is still bright for ROST and I still have a significant exposure so we'll let that ride for now.

Now for some patience. I see the utes have started to break down and a chink in the REIT market, both under-represented in my portfolio, so hoping that continues.

[Dividend Watcher]

My limit order on RY executed today after I bumped it up a dollar. I think the exchange rate between USD/CAD is about the long-term average so the price and dividend will bounce above and below that point. Over time, everything should average out. Between that and BNS, Canadian banks are about 3% of the portfolio -- about where I wanted bank stocks to be. Yield at time of purchase was 3.92%; close enough to 4% for government work. Will reinvest the dividends for a while to dollar cost average and then start collecting the cash.

Yesterday, used some of my excess cash and took a little bite of MAIN comprising about 0.8% of the portfolio. Wow, I finally dallied into the BDC market. I've been reading all their annual reports and press releases and feel management has tried to be judicious and transparent. Now to watch interest rates and see how that affects profitability over time. I'll collect the dividends as cash and use it to add to other positions. I'm suspecting this won't be a longer term hold.

Still waiting for REITs and utes to fall out of bed. Still trying my patience.

[Roadmap2Retire]

Great moves, DW. My two Canadian banks are BNS and TD. Would like to add RY as well, but that'll have to wait.

My next purchase is probably going to be MAIN. Those dividends look enticing.

Thanks for sharing
cheers

[crimsonghost747]

(02-19-2015, 10:49 AM)Dividend Watcher Wrote: My limit order on RY executed today after I bumped it up a dollar.

Still waiting for REITs and utes to fall out of bed. Still trying my patience.

I have also been looking at RY. Actually I took a look at Canadian banks a couple of months ago and RY stood out as something that I would definitely want to own. However I still feel that even though the P/E number is not that high, there is still a bit that should be trimmed off the price before I buy it. So definitely interested in it too but currently watching from the sidelines.

As for REITs, take a look at NPR. Also from the better side of the border (heheh) and it has really taken a beating with the drop in oil price since a big part of their portfolio is located in cities that are very dependant on the oil industry.

[Dividend Watcher]

Well, it's been a while since I showed the entire portfolio.

I've embellished the chart I started this thread with. As I said in the beginning, I'm a visual learner so graphs & charts help me envision what I'm doing. It now includes what percentage each company contributes to the dividend income total (red bars). The dashed line is around 3.2% which is the mean % value if I held each security equal by market value. This is just a guide as I have no intention of equal weighting everything by neither income nor value. It does help me identify what may be too overweighted, such as PEP which I noted in this thread previously, and I make decisions from there.

   

You can see some the results of some of the decisions I've mentioned previously. I have about 2% in cash which I'm focusing towards REITS and utes to boost the income stream if they'll only drop some more.

I have a short covered call outstanding on AFL. If it trades, I'll be underweight but I plan to trade around that unless there's some compelling bargain out there.

ABBV is way overweight but I'm not selling that right now. With a 3.5% yield and still some promise there, I'll let it sit while I collect the dividends in cash for now.

CVX is not going anywhere. I've trimmed it once and it's still pumping cash my way. Yes, I know of the FCF issues but I don't think the impact will be that bad over the long term. Collecting those dividends also.

I just trimmed PEP and plan to hold where it's at for now. It's the longest resident in my portfolio and has been a good return for me. I even held it for a few years in the 90s and I made out very well with it. Why I sold it I haven't a clue. The stupidity of youth.

T is my ATM. I collect those dividends in cash also for filling in the rest of the portfolio.

ES, the old Northeast Utilities, has a standing limit order if only the price were right. GE I'll add on a decent dip.

Lastly, if GILD were to drop below $80, I'd find the money somewhere. Right now I'm showing the projected income based on what they predicted in their last earnings report.

Lastly, I added the following graph to the spreadsheet. It shows how much is invested in each sector by market value. Someday I'll get busy on one that shows income by sector.

   

The numbers before the sector name is the GIC category. I've already broken REITs out of the financial sector, as S&P plans to do, but they haven't been assigned a GIC category number last I looked.

That's it for now. Thoughts? Questions?

ETA: Sorry I didn't shrink the graph to a more manageable size, I got lazy. Hope it doesn't cause you to scroll too much.

[Kerim]

(03-07-2015, 10:47 AM)Dividend Watcher Wrote: T is my ATM.

Love that!

It is a nice looking portfolio, if you ask me. I really like that you added the red bars. I love seeing which companies account for a disproportionately large share of my income. Keeps me appreciative of those "ATM" stocks like T and COP.

[Jimbo]

I REALLY like the bar graph. It really puts the picture out there.
I have just finished putting together some excel sheets.
All of this is time consuming, do you not have enough to do?
Seriously, great job.

[Dividend Watcher]

And now I finally get around to posting the wife's portfolio. It's changed quite a bit from the first post in this thread and I am much more comfortable now.

   

First thing I notice is that HCP has become quite a big part of the dividend stream. I said in DRILLINDK's post that I was reinvesting her dividends for now. Now that I look at it, looks like I need to take the cash for expanding the portfolio.

Again, we will be focusing more on utes and REITs since, as we get closer to "that age", we'll need the dividend stream. Just need some better pricing. Where the hell does the time go?

I'll probably hold ESV until it goes kaput. My "story" on the company hasn't changed and over the long term should be rewarding us once again. It's cut the dividend and we're 50% underwater. Selling it would only lock in the losses and not add a very big pile of cash to work with anyway.

At these prices, I wouldn't mind adding more to JNJ and EMR but, alas, we are out of cash for now. Maybe I'll wait until a better pullback.

PG is just going to have to sit there until it gets dirt cheap or the fundamentals improve. In the meantime, I just may add some UL to get better exposure to the household products space. Both CLX and KMB are way too high for them to fill in and CHD & CL have too low a yield plus the high P/E to make them viable contenders at this point.

I keep vacillating on WBA & UTX. Both have been berry, berry good to us. I've trimmed her WBA twice already and it just keeps chugging along. UTX still has lots of potential and plenty of cash flow to throw around but the yield is so damn low. I guess EMR will balance that out in the industrial sector.

Speaking of that, here's her sector distribution:

   

No 'Basic Materials' yet. See a couple posts up about this sector.

I forgot to add in my previous post that the Energy Sector is the dark blue wedge at 1:00 o'clock and it goes clockwise from there. Sometimes it's hard to distinguish the colors.

And that's all the news for now. Thanks for the thoughts and suggestions.

[Dividend Watcher]

Trimmed WBA in both our portfolios today. With a trailing P/E of 40 and, even if earnings hit estimates, the forward P/E is in the mid-20s, I think I can either better the dividend stream or buy some back if there's a significant drop in the meantime. It's just above my desired allocation in both portfolios. If they do make a big acquisition this year, it could wreak havoc with estimates as they digest it -- especially if they pick up Rite Aid. Of all the drug stores out there, including the regional ones around here, it appears Rite Aids are the worst managed outfit and would duplicate locations of just about every Walgreens in our area. That's a lot of store closings and broken leases.

I'll just sit in cash for a short while as I survey the landscape.

[EricL]

(03-18-2015, 09:20 PM)Dividend Watcher Wrote: Trimmed WBA in both our portfolios today. With a trailing P/E of 40 and, even if earnings hit estimates, the forward P/E is in the mid-20s, I think I can either better the dividend stream or buy some back if there's a significant drop in the meantime. It's just above my desired allocation in both portfolios. If they do make a big acquisition this year, it could wreak havoc with estimates as they digest it -- especially if they pick up Rite Aid. Of all the drug stores out there, including the regional ones around here, it appears Rite Aids are the worst managed outfit and would duplicate locations of just about every Walgreens in our area. That's a lot of store closings and broken leases.

I'll just sit in cash for a short while as I survey the landscape.

I believe that trailing PE isn't taking into account one time adjustments to earnings due to the merger with Alliance Boots. The PE on 2015 earnings is about 24 and forward PE on 2016 estimates is 19.6. Still pretty high, but not so high that I am thinking about selling anything yet.