Dividend Income Update – November 2017

Dividends

  • Omega Healthcare Investors (OHI) – $55.25
  • Kinder Morgan (KMI) – $15.94
  • Sabra Health Care (SBRA) – $44.21
  • CVS Health (CVS) – $8.50
  • Tanger Factory Outlet Centers (SKT) – $29.11

Total dividends received during the month of October: $153.01

Total dividends received so far in 2017: $1246.28
Projected forward yearly dividend income: $2239.69
Projected forward average monthly dividend income: $186.64

Total option premiums received from closed options during the month of November: $0

Total income: $153.01

Dividend Income Update – October 2017

I’ve decided to add my monthly Dividend Income report again. I borrowed the structure from Alpha Target

Dividends

  • Altria (MO) – $26.35
  • STORE Capital (STOR) – $11.22
  • Uniti Group (UNIT) – $51.00

Total dividends received during the month of October: $88.57

Total dividends received so far in 2017: $1093.27
Projected forward yearly dividend income: $2229.50
Projected forward average monthly dividend income: $185.79

Options

  • UNIT Jan19’18 15 PUT – $127

Total option premiums received from closed options during the month of October: $127

Total income: $ 215.57

Portfolio Update October 2017

october_2017_update

Another month – another update!

Purchases

Company Stock Units Price Date Cost
Helmerich & Payne HP 20 $48.92 2017-09-13 $978.40
Uniti Group UNIT 100 $16.98 2017-09-19 $1698
CVS Health CVS 20 $73.85 2017-10-09 $1477
Sabra Health Care SBRA 44 $20.67 2017-10-25 $909.48
Celgene CELG 10 $95.45 2017-10-26 $954.50

 

Sells

none
 

Options

Stock Open Date Exp Date Type Strike Price Premium Fees Exit Price Closing Date P/L Annualized
UNIT 2017-10-03 2018-01-19 Put $15.00 $244.00 $7.00 $1.10 2017-10-26 $127 172%

 

I’ve added some shares to my new initiated position in Helmerich & Payne because I see the oil price stabilized and the oil price environment (demand/supply) more positive going forward. My portfolio is already very energy heavy, but I don’t just want to wait for the better times to see my underwater positions going back into the green, but I also want to take some opportunity here.

Same with the new position in Uniti, a communication REIT. From Bloomberg:

It operates in four business segments: Leasing, Fiber Infrastructure, Towers, and Consumer CLEC. The company engages in the acquisition and leasing of mission-critical communications assets, such as fiber, data centers, consumer broadband, coaxial and upgradeable copper assets

Highly speculative, because the biggest customer (70% of revenue) Windstream has a higher chance of going into bankruptcy. In hindsight I was way to early to jump the yield-sucker train. My original plan after my purchase was to add in the low 13s again, but this time I decided to try out selling a cash secured put. I was always reading about this strategy but never tried it myself. As this is a highly speculative position I also wasn’t to eager to add again, so I decided to sell a slightly “in-the-money” Put instead, which also would result in an even lower price: $15 (strike price ) – $2.44 (premium) = $12.56. I also added an order to close the option at $1.1 which already happened yesterday. Subtracting the fees (2x$3.5), I made $127 in 18 days. I will continue to evaluate the use of option writing, but I still need a lot of practice (no experience in selling covered calls and rolling options).

I also initiated a new position in CVS Health, a dividend contender with 14 years of an increasing dividend. I like the dividend yield (2.71%), the payout ratio (39.84%) and the difference from the historic dividend median yield from the last 13 years (1.18%). The price was driven lower because of the rumor about amazon entering the pharmacy space. Yesterday it was confirmed. Additionally I read yesterday that CVS wants to buy Health insurer Aetna (AET) for $66B. I have to read further details, but just by the look of the market cap of CVS (74.524B) the news itself will be a material change in valuation of the company (in every aspect). I’m curious to see the details of this offer and how the market will react to it. But I’m sure I’ve to evaluate the position again.

I’ve added 44 shares to my Sabra Health position. In August I wasn’t sure what to do with the CCP / SBRA merger. In the meantime Sabra was busy and I like all of the actions of the management (Enlivant and TPG acquisition, disposing its entire Genesis stake, capital raise through share offering and not taking new debt). This will result in a slightly lower guidance for AFFO, but with a much better diversification and risk profile. This could also lead to additional credit upgrades. I also consider adding below $19 or maybe writing another cash secured Put.

My last update includes a new position in Celgene which I initiated yesterday on the legendary -21% intraday drop caused by a slightly reduced guidance. Celgene is a biotech company which unfortunately doesn’t pay a dividend. However, I’m watching CELG for a long time and wanted to add it to my portfolio before as I’m a fan of biotechs and healthcare in general.

Portfolio Update September 2017

september_2017_update

Another month – another update!

Purchases

Company Stock Units Price Date Cost
TEVA TEVA 100 $15.86 2017-09-01 $1586.00
Ensco ESV 400 $4.49 2017-09-05 $1796.00
Helmerich & Payne HP 30 $43.81 2017-09-05 $1314.00

 

Sells

none
 

TEVA was added to my watchlist as it’s the largest generic drug manufacturer in the world and the stock price just seemed to fall without a bottom. Cutting the dividend by 75% didn’t helped either. I was reading more and more about this company and the current situation and I was a little bit surprised by the huge amount of generated cash flow. All things considered (debt, decreasing operating margin, no CEO) the risk/reward ratio just seemed very compelling to me and I bought a small position.
Today they approved a new CEO and I’m very pleased with this decision. Kare Schultz is a former COO of Novo Nordisk. And as you know, I’m a big fan of Novo Nordisk. After leaving Novo Nordisk he helped with the turnaround and restructuring of Lundbeck (another Danish pharmaceutical company). So I’m eager to see the next steps of the company and would even add if falls below my entry price.

I also added to my Ensco position. As a cheesy side note: by looking at my portfolio , my stock position in Ensco and the company itself have one thing in common: they operate under water.
When I started with my investment journey I was compelled by the dividend growth rate and high yield of the offshore drillers. Needless to say, I was short sighted and it ended very badly for me. Ensco is the last offshore driller in my dividend portfolio. I’m holding to it and added to my position because I still think there will be a turnaround at some point. I’m not convinced the supply/demand oil situation is forever in the favor of supply. The big oil majors were slashing their deep sea capex by big numbers in the last years. But who is replacing the depleting wells, when there is no or minimal investment in new offshore wells? Just to confirm my perspective: in 2015 the global offshore production were contributing nearly 30% of the global crude oil output. To make a long story short (no pun intended): I speculate about the recovery of the sector at some time and when I see a stabilization of the WTI/Brent price in the last months, but nearly no reaction to the declining stock price of Ensco or every other offshore driller, I know this sector is abandoned and hated and it’s time to add to my position. I don’t think there will be a big increase in oil price over the next years, but I hope for a stabilization in the mid $60s for Brent which would lead to new contracts, although with minimal day rates.

But I also have to add, that with the acquisition of Atwood (another offshore driller) and the associated debt, Ensco may have only little over two years left of liquidity before it will need to look how to repay debt without a proper improvement of the backlog. So it’s a big speculation and we’ll see how it goes.

Another speculation position, although not nearly as drastic, is my buy of Helmerich & Payne. Another oil contract driller but with most of the revenue coming from US shale (land) rigs. The balance sheet looks solid to me, although the dividend isn’t covered and is indeed in risk of cutting. This was also confirmed by the CFO:

As mentioned in the past, it is unlikely that the company would issue additional debt with the sole purpose of sustaining or increasing current dividend levels.

If they cut the dividend, the price will experience a fallout and I will add to my position because without the high payout ratio the balance sheet will look even better. This contradicts the intentions of a dividend growth investor, but I already acknowledged that I’m more risk-tolerant and I like the idea of being opportunistic.

Portfolio News

Gilead acquired KITE! From Wikipedia:

Kite Pharma is a publicly held, clinical-stage biopharmaceutical company engaged in the development of novel cancer immunotherapy products with a primary focus on engineered autologous T cell therapy designed to restore the immune system’s ability to recognize and eradicate tumors.

As I’m still heavily overweight in GILD, I’m more than happy with this move.

Portfolio Update

august_update

It’s been a while since I’ve updated my Blog in March. Here are my latest updates since then:

Purchases

Company Stock Units Price Date Cost
STORE Capital STOR 100 $20.35 2017-05-09 $2035.00
Washington Prime Group WPG 200 $7.97 2017-05-12 $1594.00
Novo Nordisk NOVC 50 €35.08 2017-08-08 €1753.85
Altria Group MO 20 $63.39 2017-08-24 $1267.8

 

REITs did get cheap in May and I bought STOR and WPG. There were some more on my list, but they didn’t quite reached my buy zone (but all were very close to it). STORE is my substitute for O(also on my list) which seems always too expensive for me. In many aspects STOR has even better metrics, so I choose to buy it instead of O. Since Warren Buffett also decided to buy STORE, the price got a big lift and now I’ll have to wait a little longer to increase my position.

WPG on the other side was just too cheap to ignore. Still plenty of room to cover the big dividend, I bought a small position. But I didn’t expect it to rise so quickly, so I sold it two months later for a nice gain of $274.00 (17,2%) including the dividend. Long term I think SKT or even SPG are better positions in this declining sector for me. But I’m always open to some opportunities.

I’m a big fan of Novo Nordisk and bought another batch just before the latest report which lifted the stock quite a bit. I also managed to catch the dividend with this buy (DKK 300 in August). If the price will dive again to the lower 30s I will most likely continue to accumulate.

And today I started a small position in Altria (MO) and I’ll also continue to accumulate if it falls any lower (which seems most likely at the moment).

Sells

Company Stock Units Price Date Total Gain
Washington Prime Group WPG 200 $9.09 2017-07-24 $1818.00 $224.00 + $50

 

Portfolio News

In the meantime CCP got acquired by SBRA which will change the dividend rate. I’m still not quite sure what to do with it, but until then I’ll get paid even though the new yield is a little lower.

TIS stopped paying the dividend completely and I moved the position into my “speculative portfolio”. It’s still not sold and way under water(-55%). Not one year ago it was nearly the same amount, but the other way around. Again I’ve to blame myself for ignoring the payout ratio, not reading the quarterly reports and generally ignoring the rule “less market cap means more babysitting/risk”.