DGI For The DIY

[fenders53]

(05-23-2020, 08:11 AM)EricL Wrote:

(05-23-2020, 06:27 AM)fenders53 Wrote:

(05-22-2020, 02:36 PM)EricL Wrote: Haven't pulled the trigger yet, but I'm leaning towards selling ROST after the dividend suspension and adding to my positions in AMP, AWK, NEE, and HRL with the proceeds.

They are all underweight positions that I feel pretty confident about maintaining dividends during the pandemic.

All of those should at least maintain the dividend.  Retail is likely to be a bumpy ride.  You might wait a year for your dividend to return in ROST.

I read ROST's conference call transcript and it didn't do much to encourage me on its near-term expectations. I think earnings estimates are still too high, and with shares trading at over 20X next year's rosy estimates, I don't see much upside. Management didn't elaborate on the dividend at all, and with a yield of just 1.25% to begin with, I don't expect it to be a priority.

My replacement stocks aren't values either, but I have more faith in their earnings prospects than ROST at this point, and I get paid to hold them in the meantime, which is the goal behind a DGI portfolio to begin with.

No the replacements are exactly undervalued, but they won't cut IMO, and several of them are well off their highs.  It hasn't worked perfectly but I shoot my Div cutters and ask questions later.  I've never had more div cuts, and my incomes is up for the quarter.  ROST would be gone for now if I owned it.  I'm confident you'll get another chance to buy it back cheaper if you wish but I doubt you do.