As I wait for the last three dividends of 2017 to post to my account, my final accounting report will delayed into next week. Sure I could just accrue said dividends and release the report but where would the fun in that be? Especially since I can lay claim to being the first official victim of the new tax plan, aka the Tax Cuts and Jobs Act of 2017. As it’s not even effective yet, I guess this is the first – of probably many – unintended consequences to emanate from this bill. This week I’ll also cover my last minute 2017 moves and my first 2018 activity. But first …
The markets ended the month generally flat while whip-sawing in between on geo-political news (North Korea), domestic disturbance (Charlottesville) and natural disaster (Harvey) taking center stage. I did deploy a minimal amount of new capital along with dividends received in some positioning moves. The S&P ended the month up .05% while my portfolio lagged by dropping -0.34%. The differential can be explained by two events, 1) higher exposure to Texas (e.g., hurricane), and 2) the month-end rise in the US dollar causing my foreign issues to drop a little. For the year, I remain ahead of the index by 4.47%.
Headlines impacting my portfolio (bold are owned):
- 8/3 – IVZ in talks to buy Guggenheim Ptnrs ETF business
- 8/3 – VLO agrees to export refined fuels to Mexico through iEnova (SRE subsidiary)
- 8/3 – SRC announces spinoff of Shopko properties
- 8/4 – Ackman requests delay in ADP brd nomination deadline as “8% owner”
- 8/4 – LAMR acquires Philadelphia market billboards from Steen Outdoor
- 8/8 – ONB acquires Anchor Bank (MN)
- 8/10 – PYPL acquires Swift Capital (Del.)
- 8/10 – INVH and SFR agree to merge (BX stake to be abt 41%)
- 8/15 – KEY acquires Cain Brothers (pvt)
- 8/16 – TU acquires Voxpro (pvt)
- 8/16 – PLD buys out CCP (CYRLY) JV
- 8/20 – GS approved for Saudi Arabian stock trading license
- 8/22 – PAYX acquires HR Outsourcing Inc. (a Clarion Capital portfolio company)
- 8/22 – CLX sells Aplicare line to Medline (pvt)
- 8/22 – BX considering an IPO/sale of Gates Global
- 8/30 – KSU forms JV with Bulkmatic for bulk fuel terminal in Mexico
- 8/31 – BNS confirms discussions to acquire Chile operations from BBVA Spain
- Added to VLO
- Added to LARK
- Added to AROW
LARK and AROW were positioning moves ahead of anticipated stock dividends (3% announced by AROW post purchase)
- August delivered an increase of 22.24% Y/Y with the about half of the increase being attributable dividend increases and the other half purchases.
- August delivered a decrease of 12.99% over last quarter (May). Semi-annual payers, a date change due to a merger, and normal BX dividend being the culprits. Also a Singapore dividend paid in August (locally) has yet to be paid via Citi’s ADR (now likely Sept.), so I expect September to be firing on all cylinders.
- Declared dividend increases averaged 10.92% with 62.71% of the portfolio delivering at least one increase (including 2 cuts and 1 suspension)
- YTD dividends received were 75.91% of total 2016 dividends which if the current run rate is maintained would exceed last years’ total in early November
Brighthouse Financial (BHF) (MET spin) has been received.
AGU/POT (Nutrien) remains pending, SGBK/HOMB received regulatory approval and is expected to close late September.
Overall another positive month with the only disappointment being the Q/Q dividend decline – which was unexpected. The primary metric (annual dividend increase) remains on target and well ahead of inflation.
In my inbox I found a message inspired (?) by my last post. In a nutshell, it was a request for further insight into my October purchases. I have to admit that, on the surface, the appearance is that I was throwing stuff against the wall to see what would stick. I would like to think I’m slightly more calculating. To set the scenario, I had an oversized cash position due to a merger, the markets had started their pre-election downward drift and the FBI just breathed new life into Candidate Trump’s aspirations.
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
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.
- 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)
- 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.
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.
Proxies were received and voted for both the LSBG/BHB and AGU/POT mergers.