Dividend Investing - Month 12

With a new month starting, I get the chance to see how the new average monthly dividend is coming along.  It looks like the portfolio is now averaging $63.27 monthly!  Compared to month 11, I'm noting an 11.56% increase! 

Since new purchases occur in $500 intervals, the $63.27 will really help make it easier for me to accumulate the capital needed for future purchases. 

The increase in the dividend was the result of WMT increasing their dividend by 20%, and my switch from UHT to PER. 

One thing I never mentioned on my post about the stock switch is the fact that an initial $500 investment grew over the last year and now results in about $100 annual dividend payment.  PER may be a risky oil play for many individual investors, but when I factor in my yield on cost with the original UHT investment, I'm getting over 20% for my money now.

UHT for PER

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.

Dividend Investing - Month 11

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.

1 Sale = 3 Purchases

I sold half of my holdings in WMT and purchased CVX, TCAP and UHT this month.  This will help my dividend income stream while providing additional diversification in the portfolio.

WMT: I set a personal price target of $68.50 for WMT and as it stands, has been overvalued for a bit.  With the release of their most recent earnings, I knew stock prices would decline if it didn't beat the 'stock analysts' expectations, so I had to be proactive and sell.  Seeing a yield of 2.15% didn't slow me down either...

TCAP = Triangle Capital has a great management team and if you visit Pulling ourselves up financially you can see a good fellow blogger's review of the company.  Using my dividend investing strategy, TCAP had an RRR value of 10.05 at time of purchase.

CVX = In my opinion this stock is way under-valued.  With a 26% payout, there is lots of room for the dividend to grow over the years.  The RRR value was 11.88.

UHT = a REIT that deals with hospitals and other medical facilities, this great dividend play had a yield around 5.75% and an RRR value of 14.50

In case you didn't know, the RRR is simply pairing up the payout ratios with the dividends themselves to measure the "Risk Reward Ratio".  You can learn more about the strategy at here on my blog.

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.