September 2018 Update

It was a tale of two markets this month with highs being set on the 20th before pulling back through month end.  It’s a riddle of sorts when consumer sentiment is off the charts and the ultimate consumer stock (BBBY) plunges on terrible sales.  How about the Fed raising rates again but bank stocks fall?  Then Mexico appears to tap the brakes on a possible bilateral trade deal in favor of retaining a trilateral including Canada with the Trump threat being tariffs on Canadian cars.  Yes, a conundrum indeed. I was off the sidelines during the first half of the month but going silent during options expiration and the sector changes later in the month.  September saw a rise in the S&P of 0.43% while my portfolio lagged by registering a decrease of 0.42%.  YTD I’m ahead of the S&P by 0.21%.  The biggest factor being my cash position – which is normally minimal.  I only report stock positions – but if cash were reported the results would have been a wash.

Portfolio Updates:

  • added to KMB prior to ex-div
  • added to GBNK (hedge on IBTX merger)
  • sold IBTX (locking in a 46% gain – I’ll get these back post merger)
  • sold one CHD position (completed last month’s repositioning)
  • sold one JNJ position (completed last month’s repositioning)
  • added to CMA (minor rebalance)
  • added to EPR (minor rebalance)
  • added to CBSH (minor rebalance)
  • added to FFIN (minor rebalance)
  • added to MAIN (minor rebalance)
  • added to MKC (minor rebalance)
  • added to PYPL (minor rebalance)
  • added to PNC (minor rebalance)
  • added to PRI (minor rebalance)
  • added to SHPG (minor rebalance)
  • added to TSS (minor rebalance)
  • added to UNH (minor rebalance)
  • added to VLO (minor rebalance)
  • added to V (minor rebalance)

DIVIDENDS

My main focus resides on dividends.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • September delivered an increase of 13.54% Y/Y, the impacts being dividend increases and a sizable special dividend (AMC).
  • September delivered a 15.65% increase over last quarter (Jun).
  • Dividend increases averaged 14.96% with 71.03% of the portfolio delivering at least one increase (including 1 cut (GE).
  • 2018 Dividends received were 92.71% of 2017 total dividends putting us on pace to exceed last year next month.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

Mergers:

XRX merger with Fujifilm cancelled (now being litigated).

SHPG to merge into TKPYY

GBNK to merge into IBTX (shareholders approved)

COBZ to merge into BOKF (expected completion 1 Oct 2018)

GNBC to merge into VBTX (semi-reverse)

Summary

My repositioning is almost complete so next month I can begin to front load into 2019.   Dividends this month hit a new record.

Hope all of you had a good month as well.

Advertisements

August 2018 Update

The markets took comfort by rising on a possible trade deal with Mexico with hopes of Canada being a slam dunk being dashed (until possibly next month) by the president’s own words (albeit off-record) that shot the negotiations down.  Kind of have to wonder about the art of that deal :).  Anyway, earnings were generally good with only a few surprises although several companies guided lower on tariff concerns and the inability to maintain the run rate that was accelerated by the tax plan.  I did come off the sidelines a little this month with mostly repositioning moves on the few dips.  August saw a rise in the S&P of 3.03% while my portfolio lagged a little by registering an increase of 3.02%.  YTD I’m ahead of the S&P by 1.06%.

Portfolio Updates:

  • Initiated GNBC (hedge on VBTX merger)
  • added to LUV on weakness
  • added to CHD (repositioning move – now overweight through the dividend)
  • Initiated MSCI on weakness (capturing their 52.63% dividend increase)
  • added to JNJ (repositioning move – now overweight through the dividend)
  • added to COBZ (merger approved by regulators)

DIVIDENDS

My main focus resides on dividends.  Market gyrations are to be expected but my goal is to see a rising flow of dividends on an annual basis.  I’m placing less emphasis on the quarterly numbers as the number of semi-annual, interim/final and annual cycles have been steadily increasing in my portfolio.

  • August delivered an increase of 53.11% Y/Y, the impacts being a Sep dividend paid in Aug (10%), last month’s rebalance (5%), dividend increases (5%), interim/final cycle (5%), purchases (1%) and the remainder being dividend reinvestment.
  • August delivered a 17.93% increase over last quarter (May) due to an interim/final cycle.
  • Dividend increases averaged 14.83% with 69.16% of the portfolio delivering at least one increase (including 1 cut (GE).
  • 2018 Dividends received were 77.59% of 2017 total dividends putting us on pace to exceed last year in early November.

Note: I updated my Goals page to provide a visual of these numbers.  Based on Mr All Things Money’s instruction set with a conversion to percentages.  My code only updates when the monthly Y/Y number is exceeded.  Otherwise, the prior year actual is used.

Spinoffs:

GE‘s rail unit to spin then merge with WEB

GE to spin 80% of the health business

NVS proposed spin of Alcon scheduled for shareholder approval Feb 2019

Mergers:

XRX merger with Fujifilm cancelled (now being litigated).

SHPG to merge into TKPYY

GBNK to merge into IBTX

COBZ to merge into BOKF

GNBC to merge into VBTX (semi-reverse)

Summary

The Y/Y dividend result is a great illustration of the power of reinvestment – particularly in light of the fact that “fresh” money investment is minimal.  Next week will be the continuation of the 3Rs series which will highlight some of the moves I’m making going into 2019.  You might guess at a couple of them based on my portfolio additions.

Hope all of you had a good month as well.