The Rose Portfolio

Source: stockfresh.com

91 Stocks

This portfolio is for real and consists of 3 brokerage accounts (2 Roth and 1 taxable) and 6 separate companies all managed by Rose, a retired lady pharmacist, married and living in Iowa. My last article here is as an excellent alphabetical listing reference for the 93 holdings owned in August. The now 91 holdings are in 10 sectors, with none in the material sector.

Common Stock and RICs

There are 62 mostly common stocks in 9 sectors shown below in chart #1 that are ~ 77% of the portfolio value, PV, providing ~ 61% of its income, not shown. Shown is the S&P Credit rating as known and provided by my paid subscription service to Fastgraphs. Chart #2 has the other 29 holdings and you will note very few credit ratings are known, as they are regulated investments companies or RICs, preferred shares and a bond. Real estate, the last sector I own, does have a few with credit ratings. In each sector or type all holdings are listed by descending %PV. I have also noted if there is a K1 tax form, ADR fee, or any other interesting tidbit for ownership.

Sector #
Value 91 Sector S&P Stock Stock %
15.7% 13 Cons S Cr R Ticker Name PV
A (KMB) Kimberly Clark 3.3%
A (NYSE:PM) Philip Morris 2.3%
A+ (KO) Coca Cola 1.8%
A (TGT) Target 1.8%
BBB (GIS) General Mills 1.4%
BBB (MO) Altria 1.2%
A + (PEP) Pepisco 1.1%
BBB (MDLZ) Mondelez 0.7%
BBB- (TAP) Molson Coors 0.7%

UK/ADR

A- (DEO) Diageo 0.5%
A (HSY) Hershey 0.4%
BBB (SJM) JM Smucker 0.4%
BBB (KHC) Kraft/Heinz 0.1%
3.8% 3 Cons-D A (HD) Home Depot 1.5%
BBB+ (MCD) McDonalds 1.4%
A+ (GPC) Genuine Parts 0.9%

10.9% 11 Energy
5.90% IOC/Refiner
AA+ (XOM) Exxon Mobil 1.5%
BBB (VLO) Valero Refiner 1.3%
A (OXY) Occidental Petrol 1.3%
AA- (RDS.B) RD Shell.B 1.2%
AA (CVX) Chevron 0.6%
5.00% MLP/ETF
CAD BBB+ (ENB) Enbridge 2.1%
BB (TRGP) Targa Resources 1.1%
no K1 (KNOP) Knot Offshore LP 0.5%
No K1 (HMLP) Hoegh LNG 0.5%
no K1 (AMZA) Infracap ETF MLP 0.5%
no K1 (AMLP) Alerian ETF MLP 0.4%
4.1% 3 Finance A+ (MA) Mastercard 2.7%
AA- (V) Visa 1.3%
A- (MET) Metlife 0.1%
10.5% 9 H-CARE A- (ABBV) Abbvie 3.2%
AAA (JNJ) Johnson & Johnsn 3.0%
A (AMGN) Amgen 1.0%
BBB+ (CAH) Cardinal Health 0.9%
AA (PFE) Pfizer 0.8%
BBB (CVS) CVS 0.8%
A+ (BMY) Bristol Myers 0.4%
BBB+ (CELG) Celgene 0.3%
BB (TEVA) Teva 0.1%

6.8% 7 Industrial BBB+ (LMT) Lockheed Martin 2.0%
AA- (MMM) 3M 1.4%
A+ (CMI) Cummins 1.3%
A (BA) Boeing 0.9%
A- (UNP) Union Pacific 0.5%
K1 B/K-1 (FTAI) Fortress 0.4%
BB- (CVA) Covanta 0.3%
3.2% 5 Tech AA- (CSCO) Cisco 1.2%
BBB- (AVGO) Broadcom 0.6%
AA (ADP) Automatic Data P 0.5%
A+ (INTC) Intel 0.5%
ADR fee A+ (OTCPK:TCEHY) Tencent 0.3%
7.7% 4 COM-tele BBB+ (VZ) Verizon 3.6%
BBB (T) ATT 2.7%
CAD BBB+ (BCE) BCE 1.1%
ADR fee BBB+ (VOD) Vodafone 0.3%
13.8% 7 UTILITY BBB+ (D) Dominion 3.2%
A- (SO) Southern Co 2.9%
A- (XEL) Xcel 2.7%
A- (MGEE) Madison Gas E 2.1%
A- (WEC) Wis Energy 1.1%
cef (DNP) Duff N Phelp 1.0%
BBB+ (BIP) Brookfield Partnrs 0.8%

Note in the energy sector, I have taken the liberty to divide it for my own use as follows:

-Integrated Oil Companies/IOC and Refiners

-Master Limited Partnerships, MLP, or Exchanged traded funds or ETFs.

Chart #2 follows next and is again most of the HY, or high yield type of investments, with this first section being fixed Income and preferred debt.

% Sector S&P Stock Stock %
Value # or Type Cr R Ticker Name PV
0.3% 1 Fixed-Bond Geo Group 0.3%
6.2% 8 Fixed-Pref (NYMTN) NY Mortgage-N 1.4%
(CIM.PB) Chimera-B 1.0%
(TGP.PB) Teekay-b 1.0%
(WPG.ph) WashPrime-H 0.8%
K-1 (NGL.PB) NGL-B 0.7%
(PMT.PB) PennyMac-b 0.6%
(CBL.PD) CBL-d 0.3%
K-1 (NS.PB) Nu Star-b 0.4%

12.3% 20 RIC
6.6% 11 Real Estate
Retail-mall A (SPG) Simon Prop Grp 1.3%
Healthcare BBB+ (NYSE:VTR) Ventas 1.2%
Data/storage BB- (IRM) Iron Mountain 1.0%
Industrial BBB (STAG) Stag Industrial 0.7%
Data BBB (DLR) Digital Realty 0.5%
Infrastructure (CORR) CorEnergy 0.5%
Detention BB- (GEO) Geo Group 0.4%
triple net BBB- (KRG) Kite Realty Grp 0.3%
triple net BBB- (EPR) EPR Proprty 0.3%
Retail (MAC) Macerich 0.2%
Detention BB (CXW) CoreCivic 0.2%
5.7% 9 Misc RIC
mREIT (AJX) Great Ajax 0.8%
mREIT (BXMT) Blackstone 0.4%
Financial-cef (RA) Brkfld Real 0.7%
Financial-cef (ARDC) Ares Fund 0.9%
BDC (PFLT) Pennant Float 0.8%
BDC BBB- (ARCC) Ares Capital 0.8%
BDC BBB- (TCPC) Blkrock TCP 0.7%
BDC (CGBD) TCP BDC 0.5%
BDC BBB- (FSK) FS KKR Cap 0.2%
Total 91 95.4%
Cash/Opts 4.6%
100%

At the time of writing I had 4.6% PV in cash and cash alternatives or option puts.

Portfolio value

Portfolio Value is up 3.3% from August and up 19% for the full year 2019, similar to the S&P 500. The Rose portfolio has a 4.55% dividend yield beating the S&P easily which sits at ~2%.

Portfolio Dividends

September dividends compared to 2018 are an amazing 32.6% higher, and 20.5% more in Q3, but it must be known many HY additions and changes have been made along the way and into even this year.

2019 dividends are still moving pleasingly higher, with 8.6% more than the comparative month of Q2 and 7% higher for this last Q3. Income is on track to still be 13.8% higher for this full year 2019; even with the most recent selling of some HY eREITs. Sticking with the same investments for 2020, it’s too early to predict dividend gains, but I see a ~ 3% increase already. This also would give the current portfolio ~ 4.6% yield which is just fantastic.

Here are the 6 dividend raises I received for September with the % increase change:

STOCK Div/share Div/share Change
Ticker New Old %
CMI 1.311 1.14 15.00%
SJM 0.88 0.85 3.53%
TAP 0.57 0.39 46.15%
TGT 0.66 0.62 6.45%
UNP 0.97 0.88 10.23%
MGEE 0.3525 0.3375 4.44%

Here are the other companies by date, with the 7 monthly payments shown in bold:

SEPT STOCK $ Amount SEPT STOCK $ Amount
Date Ticker Date Ticker
3 PFLT 0.095 16 EPR 0.375
3 CMI 1.311 16 STAG 0.1192
3 ENB 0.5533 16 HSY 0.773
3 INTC 0.315 16 NS.PRB 0.4775
3 PFE 0.36 16 PMTpB 0.5
3 SJM 0.88 17 MCD 1.16
3 V 0.25 19 HD 1.36
3 WEC 0.59 20 D 0.9175
4 VLO 0.9 26 RA 0.199
6 AMGN 1.45 26 RDS/B 0.94
6 BA 2.055 27 KRG 0.3175
6 MAC 0.75 27 LMT 2.2
6 SO 0.62 28 UNP 0.97
10 CVX 1.19 30 AMZA 0.08
10 JNJ 0.95 30 ARDC 0.1075
10 TGT 0.66 30 CBL-d 0.46
10 XOM 0.87 30 ARCC 0.42
10 DNP 0.065 30 BIP 0.5025
12 MMM 1.44 30 CIMpB 0.5
13 TAP 0.57 30 DLR 1.08
13 KHC 0.4 30 TCPC 0.36
13 MET 0.44 30 PEP 0.955
14 MGEE 0.3525

I believe much of the success of receiving higher dividends also comes from adding HY preferred with their constant and steady income.

September Transactions

Any price with a T after it was done in the taxable account.

SEPT 2019 T = taxable
Sector Name Ticker Action Misc. Comments/
Add Price Intent
Energy/MLP Hoegh NLG HMLP 14.28/15.63 11.7% yield 1.76 div/ no K1
Energy/MLP Knot Offshr KNOP 18.63 11.2% yield 2.08 div/ no K1
Energy/MLP Alerian ETF AMLP 9.05 8.4% yield no k1/ ave down
Energy Shell.b RDS.b 56.8 T 6.6% yield 3.76 div/ frozen
Energy Occidental OXY 44.75 T 7.1% yield too cheap to ignore
Cons-S Altria MO 39.93 T 8.1% yield quality co cheap
Cons-S Phillip Morris PM 72.44 T 6.3% yield quality co cheap
Cons-S Molson CBC TAP 56.14 4.1% yield too cheap to ignore
H-c CVS Health CVS 62.86 3.2% yield $2 div/ frozen/ quality co
Tech Broadcom AVGO 273.7 3.9% yield close to 4% yield
ETF loans Ares Bond ARDC 14.8 8.8% yield monthly pay/ building
Sell Price
Industrial Boeing BA 367.95 T 60% trim Made 200% from 2014
Cons-Discr Home Depot HD 228.25 10% trim overvalued large position
Utility Wis Energy WEC 95.26 T trim overvalued still
RE-Data Digital Realty DLR 128.2 trim Low 3.3% yield eREIT
RE-Shop C Kimco KIM 19.91 trim Sold at cost/ rest options
Retail S-c Kimco KIM 18.6 all sold/opt overvalued low div raises
RE-Health-c Ventas VTR 63.63 trim/ options overvalued low div raises
RE-nnn WP Carey WPC 79.85 ave all sold/opt overvalued low div raises

SOLD-2

WP CAREY (WPC) and (KIM) Kimco

The chart pretty much says it all in the comments. I hate it when something like WPC, a very quality holding, gets over bought or priced. Its dividend raises are pathetic, which reflects caution and another reason to just sell with a yield of 4.6%.

Kimco is doing pretty great, but now is ahead of itself in valuation and it also is reflecting lower FFO growth and poor dividend raises, if any.

TRIMs

Boeing

I wrote an article about the Boeing trim and still feel strongly it will stay at its current price for some time, and perhaps dip lower. I took profits and have no shame in doing so, as it was a large position size.

-Home Depot was also trimmed for a large position size.

-Wisconsin Energy, a utility, is like most all utilities just plain over bought. I took profits on some and might be doing so again. It was down to only 2.5% yield when I am used to having it around 3.5% or more.

-DLR is yielding low 3.3% and it was time to say goodbye to some shares.

-VTR with a low 4.3% yield got trimmed, and it also has a pathetic dividend raise this year of 1c. I like eREITs to have higher yields for the type of investment they are and most likely will be saying goodbye to all of VTR by the end of this year.

ADD on Buys were numerous-11

The chart as shown above indicates the yield at the time of the add and comments mention my thoughts or intention which should suffice for your reading pleasure. I like AVGO better near 4%, but could not stop myself with adding just a bit more at a 3.9% yield, as I own very little in tech stock with a decent higher yield. I most likely have stopped adding to the energy sector for now, but if something screams cheap, cheap, cheap again, I always have trouble ignoring a great buy.

Conclusion/Summary

I continue to want defensive stocks and have them provide a minimum of 50%PV. I have met that goal again and I show it in the summation chart below. In bold are the defensive sectors and again separated off on the right side to show the totals. It also shows portfolio income, Pinc and then Def Inc for the 91 total stocks as shown on the left side column for each sector.

91 2019
SECTOR PV PInc Def PV Def Inc
13 Cons S 15.70% 12.40% 15.70% 12.40%
3 Cons D 3.80% 2.30%
11 Energy 10.90% 11.30%
3 Finance 4.10% 0.60%
9 Healthcare 10.50% 8.80% 10.50% 8.80%
7 Industrial 6.80% 5.10%
5 Tech 3.20% 1.90%
4 Comm-tele 7.70% 7.90% 7.70% 7.90%
7 Utility 13.80% 10.80% 13.80% 10.80%
1 Fix-Bond 0.30% 0.20% 0.30% 0.20%
8 Fix-Pref 6.20% 11.20% 6.20% 11.20%
11 Real Estate 6.60% 7.90%
9 Misc RIC 5.70% 10.80%
CASH/Opt 4.60% x 4.60%
Sold Income x 8.80% 8.80%
91 Investments 100.00% 100.00%
Defensive % 58.90% 60.10%

That is my plan and I like it and it seems to work for the Rose portfolio.

Happy investing to all.

Disclosure: I am/we are long AVGO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: and 90 other stocks in the article charts

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2019-10-12