This morning I initiated a quick trade. UHT was sold for 55.80 per share, the realized gain plus initial investment was then rolled into additional shares of PER.
UHT is basically a healthcare REIT that focuses on hospitals and medical facilities. UHT has been significantly overvalued in my opinion. I first got the shares at the beginning of 2012 for 42$ and had a yield just shy of 6%. Now, a year later the company has not changed at all really. Small dividend increases with little to no growth in sight.
I made this trade for a couple reasons. The first is the fact that RSO, being the aggressive REIT that it is, already occupies a good portion of my portfolio. I wanted to start cutting back on REITs to prepare for interest rate hikes in the years to come.
The other reason for the trade is PER has been my biggest loser of the portfolio so far, and I felt like now is a good time to cost-average down my shares (even though I just missed the ex-div date - lol). PER is a royalty trust in the Permian Basin by parent company Sandridge Energy. The parent company is poorly ran in my opinion, and its other 2 royalty trusts, SDR and SDT have too much natural gas production at this time to generate profits. The trust expires in March 2031.
Wednesday, February 13, 2013
Friday, February 1, 2013
The first of the month managed to sneak up on me. Lets see, the new average monthly dividend is now 56.56! Compared to last month's calculation, this is an increase of 13.46%. Simply amazing! There are a few factors which contributed to the huge dividend increase this month.
The sale of ABT freed up some capital to work with, so I opened a small position with NRP. NRP has been stomped on since Obama's re-election night. Democrats hate coal, and due to the mild winter we've experienced so far coal use has declined. When following the conference call from NSC's earnings report, they have been hauling less coal as well. The share price has been down 25% since I have been following it and I believe it was attractively valued at the time of purchase, even considering the risk.
UHT announced an 8.7% dividend increase. Dividend increases are always good. The only problem I have had with UHT so far is it has been a slow-growth dividend, and after purchasing this last year at 42$/share I have never found a re-entry point to cost-average down my shares.
The last big factor for the dividend increase was the DRIP of RSO's dividend. Although I feel RSO is my riskiest position in my portfolio, it has offered me the greatest return so far. The company is solid, and I don't need to monitor the business model as much as I do the interest rates. Even though this REIT has the best spread in its class, it will still take a big hit when rates rise up. I'm projecting late 2014 to mid 2015 until this happens.
Disclaimer: I am not a financial planner, advisor, or accountant. The financial actions mentioned were only suited for my own risk tolerance, strategy, and ideas. Copying another's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.