July 2021 Update

The upward trend continued this month with one dip that presented a moderate buying opportunity.  A chunk of my cash was in transit between AST and Schwab so I couldn’t take full advantage and the dip was done once the cash posted – par for the course.  Norfolk Southern (NSC) now resides in my taxable account and the Hawthorn Bankshares (HWBK) with the AST dividend reinvestment was sold (I had previously purchased in my IRA).  So one less account to deal with as I continue consolidating – although the pace is a little slower than anticipated. 

We also dealt with about 25% of the 2021 RMD this month by moving some Apple (AAPL) from an IRA to the taxable account.  RMDs are a little weird in that you are better off transferring at the high, whereas I prefer to buy low.  Hitting the high water mark keeps more assets in place generating tax free income. This being my wife’s IRA, it is not included in the portfolio until the transfer occurs.  (She also gets offsetting cash into her checking account – so not that bad a deal for her).  She currently holds only Starbucks (SBUX) and Apple, both of which I’ve purposefully kept underweight in the joint portfolio to facilitate any RMDs without going overweight in the near term.   

Performance Overview

This month the portfolio again lagged the S&P by rising 1.48% versus 2.27% for the index.  Part of the hit is the drop in Apple’s price post transfer.  Still, I can’t complain being ahead of the index by 6.25% for the year. 

My dividend run rate finally turned the corner checking in at 112.55%.  This number is fluid as I’ve tried to time sales and purchases by maximizing dividend payments, but the dividend increases announced by the banks should solidify this metric going forward.  This is also a lagging indicator as I use trailing dividends versus most investors’ future dividends.  I prefer a realistic (some would say pessimistic) view rather than a dose of optimism in this number.  Dividend increases are averaging 11.36% with 52.79% of the portfolio declaring at least one increase, offset by two decreases. 

New Positions


Positions Sold

Avanos Medical (AVNS).   Since Kimberly-Clark set them loose, they sold the surgical gown business to Owens & Minor (OMI), rebranded from Halyard Health and never initiated a dividend.  After holding for 6.79 years, I decided to sell realizing a small profit (4.6% annual LT Capital Gain). This was an ancillary position.

Positions Reduced

Hawthorn Bankshares (HWBK) as I took them overweight in May pending their stock dividend and Norfolk Southern (NSC) as the fractional did not transfer on the move from AST to Schwab.  I remain a little overweight NSC.

Positions Increased

The only one of note was AAPL.  The rest were minor additions to ancillary positions.

Pending Mergers

TPG Pace Beneficial Finance Corp (TPGY) – EVBox merger in progress, no shareholder vote yet and this one may be in a little trouble.

Tortoise Acquisition Corp. II Class A (SNPR) – Volta Industries merger in progress

Canadian Pacific (CP) Canadian National (CNI) to acquire Kansas City Southern (KSU).  I hold all three companies.

Independent Bank Corp (INDB) and Meridian Bancorp (EBSB) to merge, EBSB shareholders to receive .275 shares INDB for each EBSB share.  End result will be a slight dividend increase – I hold both sides of the deal and will continue to hold.  Shareholder vote scheduled for August 5th, my proxy voted in the affirmative on both.

Cash Position

Cash on hand increased from 1.17% to 1.64%, most of which is allocated to the next step on moving stock dividend payers into my IRA.


ABB announced the exploration of monetizing their majority stake in Chargedot, a leading Chinese e-mobility solution provider, on their April 27th earnings call.  They separated it into its own division and initiated the process of separating it into its own legal structure to explore the option of a separate listing.

Ardagh had previously announced an agreement to the beverage can business, AMP, with the Gores V Holdings SPAC with the business to be listed on the New York Stock Exchange under the ticker AMPV.  Following the merger, a planned offer to Ardagh shareholders to exchange their Ardagh listed shares for AMP listed shares will commence.  My rationale for buying ARD was the can business so I may tender my shares for AMPV.  More to follow …

Becton, Dickinson (BDX) announced plans to spin off their diabetes insulin group as an independent company in 2022.  I will continue to accumulate.

AT&T announced plans to spin its Warner Media unit and combine with Discovery.  As I bought T due to the Warner acquisition, I will hold through the spin and reassess whether to retain AT&T afterwards.

In Summary

In all, a decent month, the only downside being not outperforming the index.  I have five more positions identified to jettison as I continue some consolidation with only the timing – and price – to be decided.  PJT Partners was removed from this list pending further analysis following their special dividend announcement.    Still trying to figure out a method to measure churn – I may have to wait until next year for that to happen or perhaps I can back into it by tracking the cash position.

Next week should see a couple of ancillary position sells as the issues in question go ex-dividend – and assuming the market remains elevated.

Here’s hoping your month was good as well!