Dividend Cut – XRX

In the wake of the spinoff of Conduent (CNDT) and in a move that was not unexpected, Xerox (XRX) cut its’ dividend from $0.075 cents to $0.0625 per share (-19.3%) effective with the April 28th payment.

Although this cut was in line with the spin ratio, I’ll place XRX in the penalty box as CNDT has no immediate plans to initiate a dividend.  CNDT being the jewel in the spin is worthy of a speculative portfolio position as a hold.  XRX will be retained for the time being as a possible takeover play.  Perhaps RR Donnelley (or one of its’ recent spins) will rekindle talks in the future that were spurned last summer.

After going over a year without a cut, I now have two so far in 2017 (the other being YUM).  The only solace being the common denominator is they are both the result of spin offs.  The impact will be negligible as this position made up less than 1% of my portfolio dividends.

Feb 2017 Update

February saw DOW 20,000 being attained (again) then forging a streak of 12 days of record closes.  Uncertainty remains in areas of the ability or  time required to effect change through the legislative process – in particular tax reform, healthcare and border adjustment taxes.  This month The S&P gained 3.72%.  while my portfolio recorded a gain of 0.05%.  The index had a decent earnings season (until TGT) as its tailwind.  After two months, my performance lags the S&P by 1.95%.

Headlines impacting my portfolio:

  • 2/6 – BUSE acquiring FCFP
  • 2/7 – AMC prices secondary
  • 2/10 – BX buys AON HR assets
  • 2/14 – PYPL buys TNCGF
  • 2/17 – KHC announced pursuit of UL
  • 2/21 – PNC acquires US assets of ECNCF
  • 2/21 – JNJ buys Torax (pvt)

Blog Updates:

posts under consideration for Mar are My 2017 Coca-Cola strategy outlined

Portfolio Updates:

  • Added to LB prior to ex-div (a little gamble on earnings that failed)
  • Added to SBUX on weakness prior to ex-div
  • Added to CHD prior to ex-div and the day before the UL/KHC sector bump

Subsequent to the KHC/UL announcement, I made the determination to divest my UL holdings.  Unfortunately over the holiday weekend the offer was withdrawn so my opportunity to sell at a premium evaporated.  So – no sale.

Dividends:

  • February delivered an increase of 24.89% over February 2016.  12.96% of this increase is attributable to purchases with the remaining 87.04% a result of dividend increases.
  • February was flat over the prior quarter (actually $0.01 lower due to exchange rates and a cut).
  • Declared dividend increases averaged 8.06% with 30.64% of my portfolio delivering at least one raise (1 cut – YUM).
  • Dividends received were 14.3% of total 2016 dividends and if the current run rate is maintained would exceed 2016 around October 15th.

Spinoffs:

The MET spin (Brighthouse Financial – BHF) remains pending.

Mergers:

Agrium/POT, JNS/HGG.L remain pending

Dividend Cut – YUM

Buried in the midst of the holiday season was a press release by Yum! Brands (YUM) announcing their first dividend post spinning off the China business (YUMC).  The well written – though accurate release – made no mention of the fact that this was a 41.18% reduction from their prior payout – which incidentally had just been increased.

Now this wasn’t unexpected after the spin with the only disappointment being the manner in which they chose to announce.  Yum China is widely expected to initiate a dividend in the future with the only remaining question being whether it will offset the $0.84 annual reduction.  If initiated, I suspect it will be either on an annual or interim/final schedule.

Meanwhile, YUM has earned a spot in the penalty box.  As this issue is less than 1% of my portfolio the impact will be negligible to my dividends.

Oct 2016 Update

October was basically a quiet month with OPEC failing – once again – to shore up their hold on the oil markets.  Chevron announced a small increase in their dividend maintaining their status as a Champion.  Several small positions were added at month end as the market began a pullback (continuing into November) enabling me to start redeploying funds received from PNY’s merger with DUK.  This month The S&P dropped 1.94%.  My portfolio was basically flat, ending down 0.1%.  Note: I normalized these numbers to consider the impact of cash infusion from the merger.  My ‘pure’ equity positions decreased by 4.15%.  The need for this normalization should end as my excess cash is used.  This increases my lead for the year to 11.5% with two months to go.

Headlines impacting my portfolio:

  • 10/3 – JNS to merge w/ Henderson
  • 10/11 – SRCE gains FRB approval for Sarasota, FL branch
  • 10/19 – C finalist to be designated as clearing firm for Renminbi trades

Blog Updates:

I’m a little behind again this month but the portfolio data has been compiled and will be posted in the next couple of days with the goals update later in the week.  The Unabridged portfolio should be next week as per normal.

Portfolio Updates:

  • Closed PNY due to merger
  • Added to BMO
  • Added to CVLY prior to ex-div for the stock dividend
  • Added to JNS (weakness on currency exposure)
  • New position – ABM
  • New position – AMT (Jan)
  • New position -BLL
  • New position -CASY
  • New position -CHCO
  • New position -KOF (Mex. peso exposure)
  • New position -COKE
  • New position -CCE (UK exposure)
  • New position -CSAL
  • New position -CTBI (Jan)
  • New position -CCI
  • New position -HUM (Jan)
  • New position -LAMR
  • New position -NWFL
  • New position -OCFC
  • New position -ONB
  • New position -OUT
  • New position -PLD
  • New position -QCOM
  • New position -DGX (Jan)
  • New position -SRC (Jan)
  • New position – SGBK (Cuba exosure)
  • New position – BATRA
  • New position – VALU
  • New position  – VER (Jan)
  • New position  – YUMC (YUM spin-off)

Dividends:

  • October delivered an increase of 28.9% over October 2015.  This was due about evenly between dividend increases (Y/Y) and late 2015 funding.
  • October was down 10.68% from the prior quarter due to special and semi-annual payments in July.
  • Announced dividend increases currently average 12.59% with 67.11% of my portfolio having at least one raise so far this year.
  • Through October, dividends received exceeded total 2015 dividends by 7.2%.

Roughly half of the PNY/DUK proceeds have been redeployed with an additional 3 orders pending for January payers.   I’ve filled some of the hole I’ll face in January, so I plan on maintaining a small cash position through the election before making further decisions.

Spinoffs:

The XRX spin (Conduent) is on track to complete by year end.  MetLife has filed for a spin of their Brighthouse Financial unit under the ticker BHF.

Mergers:

Proxies were received and voted for both the LSBG/BHB and AGU/POT mergers.

Sep 2016 Update

Last month saw the commencement of the Congressional take on the ‘bully pulpit’ with first Heather Bresch (Mylan (MYL)/EpiPen) then John Stumpf (WFC) called on the carpet.  One would think Heather would have been smart enough to avoid taking the same path blazed so brilliantly by Martin Shkreli (Turing/Valeant (VRX) fame).  Her show was overshadowed by the even greedier Wells Fargo with John either portrayed as ‘asleep at the wheel’ or a criminal mastermind.  Wouldn’t life be interesting if Congress actually did anything other than use hearings to frame media sound bites?  The S&P was basically flat for the month ending down 0.12%.  My portfolio was basically flat as well, ending up 0.04%.  This increases my lead for the year to 11.88% with one quarter left to go.

Headlines impacting my portfolio:

  • 9/1 – CHD 2:1 stock split
  • 9/2 – Ireland to appeal EU anti-AAPL tax ruling
  • 9/6 – ENB to acquire SE
  • 9/12 – AGU/POT reach merger agreement
  • 9/19 – REITs officially become their own sector
  • 9/26 – YUM spin set at 1:1 YUMC for 10/31
  • 9/29 – Supreme Court agrees to hear credit card surcharge case
  •           – PNY/DUK merger approved, closing set for 10/3

Blog Updates:

I’m a little behind this month but the portfolio data has been compiled and will be posted in the next couple of days with the goals update later in the week.  The Unabridged portfolio should be next week as per normal.

Portfolio Updates:

  • FMBH replaced FCLF due to merger
  • Added to TOWN – this ‘makes whole’ this holding following my sale of MNRK prior to the merger.  (didn’t want to hold TOWN across two accounts)
  • Added to AROW prior to ex-div for the stock dividend (shares added Sept 29)
  • Added to SBUX

All were funded by dividends with no ‘new cash’ deployed.  New cash was deployed for the  annual funding of the trust I manage (skip generation).  The trust is excluded from my DGI portfolio and WFC is this year’s addition.  This is only the second time I’ve duplicated one of my holdings – the other being DIS.  The other trust holdings are GIS, HSY, PG, WMT, WGL, UNP, KHC and TXN.

Dividends:

  • September delivered an increase of 24.7% over September 2015.  This was due about evenly between dividend increases (Y/Y) and late 2015 funding.
  • September was up 4.4% from the prior quarter.
  • Announced dividend increases currently average 12.91% with 63.09% of my portfolio having at least one raise so far this year.
  • Through September, dividends received were equal to 95.7% of all 2015 dividends, keeping me on pace to exceed last year’s total -now estimated to be October 4th (as compared to 2015 being Sept. 9th).

With the cash from PNY/DUK, I’ll be looking to redeploy primarily into existing Jan/Apr/Jul/Oct payers within my portfolio with no new positions expected.  Losing PNY and the expected loss of LSBG (another merger) will leave about a 5.07% hole in my January dividend receipts unless I act now.

Spinoffs:

The YUM spin has been set for Oct 31st with YUMC to begin trading Nov 1st.  I don’t think the XRX spin date and ratio have been set.

 

 

Aug 2016 Update

Last month was relatively quiet as the world digested the Jackson Hole confab and vacations are coming to an end.  With valuations relatively high, concerns are being raised regarding inflated investor expectations.  I touched on this briefly and Passive Income Dude had similar concerns in his post, Two More Powerful Examples of Low Expected Stock Returns: LOOK OUTFor good measure, the S&P was down slightly for the month and my holdings barely outperformed the index (-.06% versus the S&P’s -.12%).  For the year I’m ahead by 11.71%.

Headlines related to my portfolio this month include:

  • August 11 (and 15) – DOW, S&P, and NASDAQ record high
  • August 29 – MORN authorized by SEC to rate corporate bonds joining S&P, Fitch and Moody’s
  • August 31 – AGU & POT reportedly in merger discussions

Blog Updates

  • Updated the Blog Directory
  • Updated Goals
  • My updated portfolio posted
  • Rolled out Blog Stuff (will update next week)

Portfolio Updates

  • Added to KMB.
  • Added to K.
  • Added to AMC.

Dividends

  • August delivered an increase of 12.2% over August 2015.  This was due primarily to dividend increases (Y/Y).
  • August was up 7.2% from the prior quarter.
  • Announced dividend increases currently average 12.98% with 57.43% of my portfolio having at least one raise so far this year.
  • Through August, dividends received were equal to 81.0% of all 2015 dividends, keeping me on pace to exceed last year’s total in early October (as compared to 2015 being Sept. 9th).

April 2016 Update

April was generally favorable for the markets.  Earnings reports presented few surprises although the trend of beating analysts’ expectations while presenting lower year over year results continued.  Financials were modestly positive while old technology seemed to disappoint.  Until month end, the market was drifting higher.  Then Apple’s and Starbucks reports were weak, the BOJ failed to raise rates and Carl Icahn announced he sold his Apple position over China fears.  So the month ended basically flat managing a gain of .27% – at least it was positive.

My portfolio value managed a 2.66% gain with the weaknesses (KMB, SBUX and AAPL) being offset by M&A activity (Comcast (CMCSA) acquiring Dreamworks (DWA) and First Cloverleaf (FCLF) being acquired).

Blog Updates

  • I changed my portfolio reporting to measure % of dividends provided instead of market value.
  • Updated the Blog Directory

Portfolio Updates

  • Sold Monarch Financial (due to upcoming merger).
  • With the proceeds, initiated positions in SRCE, BKSC, CVLY and AROW
  • Moved CVX from DRIP to brokerage resulting in a fractional share sale
  • Added to LTXB prior to their earnings release.
  • Added to SBUX after earnings.
  • Added to AAPL after earnings(and the Icahn announcement)
  • Added to XRX – I anticipate a reverse split prior to – or in conjunction with – the spinoff.  So trying to position myself more favorably in this event.

Dividends

  • April delivered an increase of 38.7% over April 2015.  This was due primarily my first dividends from NJR and SJI coupled with dividend increases.
  • April was also up slightly from last quarter by 4.4%
  • Announced dividend increases currently average 10.05% with 48.6% of my portfolio having at least one raise so far this year. .