PTMN - Rose's Income Garden 80 Stock Portfolio: Update H1 2023 Green With 7 June Raises

2023-07-07 03:12:00 ET

Summary

• Rose's Income Garden portfolio saw 39 companies pay dividends in June, with seven raises and one cut; the portfolio yield is approximately 5.2% and its value increased by 1.75% YTD excluding dividends.
• The portfolio, which consists of 80 stocks from 11 sectors, includes investment-grade common stock, high-yield business development companies, and real estate investments; cash and cash equivalents make up 15.25% of the portfolio.
• Future income from the portfolio is estimated to rise by 16.4%; the portfolio continues to outperform.

Rose's Income Garden "RIG"

• 39 companies paid in June along with 7 raises and 1 cut.

• RIG Portfolio yield is ~5.2% with value up 1.75% YTD excluding dividends to end 1H 2023.

• Transactions included 2 buys giving RIG 80 stocks.

• Cash and cash equivalents are 15.25%.

• Future income estimated to rise 16.4%

RIG is a defensive income-quality value-built portfolio with 80 stocks from 11 sectors. RIG contains investment-grade common stock along with high yield ("HY") business development companies ("BDCs") and real estate investments.

My RoseNose profile has each sector listed with the number of stocks within and the highest value stock noted. The RIG goal is to have 50% income coming from defensive sectors/stocks along with a minimum 4% yield which now is 5.15% along with ~15.6% cash. SPY has a yield of 1.55% and no cash. RIG continues to outperform SPY by double digits from its Nov. 2021 inception by 13.14%. It ended June YTD up 1.75% without dividends, behind SPY 15.01%, which has gained primarily from 10 big names which I do not own. Those names seem to be involved with AI and the tech sector. I believe, with RIG being a value-defensive portfolio, that is the primary reason it is holding strong, not rising in value. Income from dividend collection remains alive and well and with a nice yield of 5.2% while still holding ~15% cash or cash equivalents.

June RIG Dividend Income Providers

Dividend payments came from 39 out of 80 companies in RIG or ~48.75%, 5 are monthly and there were 2 split payments. 7 companies gave raises with that information in bold. They are all listed by the date received "Date Rec'd".

The following are the other abbreviations used:

• /share = US $ Dividend paid in May

• Yearly $ Div = US $ yearly forward dividend estimate

• Div % Yield = Estimated dividend yield using current listed price and dividend

• Curr = US on July 1st, 2023.

• Comments = Other relevant dividend payment/ stock information.

The 5 monthly payers: PFLT, SLRC, DNP, ARDC, and NML are not expected to offer raises very often, but PFLT does have a raise coming next month to $0.1025 from $0.10. ARDC did raise theirs in April, so a great year to own those. SLRC paid twice in June on the 1st and 29th. I will be recording the payment on the 29th of July; just me and my accounting skill in action.

7 Raises

1 - Johnson & Johnson = 5.04% raise

The raise was 6c to $1.25 from $1.19.

JNJ is a quality dividend champion for 61 years and has a top-of-the-line AAA S&P Credit rating.

The 4-year dividend growth rate/ "DGR" is 5.89%, with adding in this most recent raise of 5.04% the 5-year DGR is 5.72%.

This healthcare blue chip has a dividend yield of 2.91%, which taken together is enough to beat last year's inflation, but just barely.

The company has also had its share of controversy, with talc lawsuits and looking to put that behind them perhaps creating a separate component in the company for that portion which seems to be progressing somewhat slowly. It just spun off Kenvue with the stock ticker [[KVUE]], which holds about 60% pharmaceuticals, 26% medical tech and ~14% consumer health and no dividend. I believe JNJ holds the primary share of it, and it did not offer any shares of that spin-off to current shareholders, disappointing, at least to me and many. It can be bought on the open market for about $25 per share.

I just will hold on to this and will continue to watch it closely.

2 - LyondellBasell = 5.04% raise

The raise of 6c from $1.19 to $1.25 was rather a surprise, but very welcome.

LYB has a 13-year rising dividend and a BBB S&P credit rating.

At the current price, it provides a nice dividend yield of 5.4%.

It did provide a huge special dividend in 2022 that made it quite an attractive stock to own.

This 5% raise + 5.4% yield makes it a keeper for me.

I wrote an article in April here about waiting for the dividend to decide what to do with this company. Now, as mentioned, I hold it and if it does fall to a 6% yield I might just add more.

3 - PepsiCo = 10% raise

The raise of 11.5c from $1.15 to $1.265 was exceptionally nice.

Pepsi is a 51-year dividend champion with an "A+" S&P credit rating.

The yield of 2.7% is just okay, but the last dividend raise makes up for the lowish yield.

The price at $185 is sitting quite high but with a normal P/E of 26.06x, which most likely is close to fair value.

4 - Portman Ridge = 1.48% raise from last quarter

Portman paid early on May 31st, after having just paid on March 31st. The payment was expected in June and since I was surprised with the raise coming at the end of the month, I just have it listed as paying June 1st, which I can do being my own accountant, so thus it was done.

Portman has raised the dividend in the last 3 quarters; all were very welcome and somewhat surprising. The idea was from The Fortune Teller a number of years ago at The Wheel of Fortune. It has performed well and the 13.71% yield rocks for this BDC = business development company. It has no credit rating, and it still remains somewhat risky and unproven, but it offers a nice income and remains a hold for now.

5 - Southern Company = 2.94% raise

The 2c raise from 68c to 70c was somewhat below normal from its 5-year DGR of 3.26%.

It has a BBB+ S&P credit rating and is almost a dividend champion with 23 years of a rising dividend. It has a normal P/E of 19.62x and is selling currently at 19.51x with a dividend yield ~4%. I prefer getting either a higher raise or buying it cheaper with a 5% yield, so this also is a hold for me.

6 - Simon Property Group = 2.78% raise

The raise of 5c was the 4th one in the last 5 quarters, which has been happening over the last few years since it was cut in July 2020. It most definitely is playing catch up back to the old dividend which is appreciated. Dividend yield is 6.4%.

It has an S&P credit rating of A- and now has a record of 2 years of raising it.

The price seems to be fair to me, and I like it with the current yield making it easy to own as it keeps raising the dividend so nicely. I realize those raises may not continue, but I consider it a keeper.

7 - BlackRock TCP Capital = 6.25% raise

The raise of 2c was a surprise as it had just given a 5c special payment last quarter.

The 1-year SA price chart below reveals movement similar to that of Portman and most all BDCs which fell in March and are slowly recovering again in price. The raises are a testament to some sort of positive news that is not translated to the prices just yet. I can also sink again as "The Fed" might raise interest rates a few more times.

The Cut

Star Bulk Carriers = 41.7% cut

The cut was 25c from a previous 60c down to 35c, giving shareholders 95c thus far in 2023. Note even without any more raises and if the dividend stays at 35c it would have a $1.40 /year future and an 8% yield. I hold on. There most likely will be higher distributions this year, I can hope but don't expect it.

2 companies with separate special Payments:

- Owl Rock Capital Corp.

July 6, you will see a name change to Blue Owl Capital Corp. and a ticker of OBDC .

The total payment for the quarter will be 39c divided into 2 months as follows:

- 6c special payment made June 15th

- 33c full regular dividend to be paid July 14th.

- Ready Capital

The total payment will be the same as last quarter totaling 40c but as follows:

- 26c on June 15th

- 14c on July 31st.

Ready Capital is undergoing a merger, no name change, if you wish to read about it here . It could be a large reason for the split payments.

June Transactions

Add-ons:

British American Tobacco ( BTI ) with a now 8.3% yield.

DigitalBridge preferred H (DBRG.PH) shares that pay $1.78 yearly giving it an 8% yield.

New: 2

NML = Neuberger Berman Energy Infrastructure Income Fund

This ETF contains 79% MLPs, 17% utilities +/-.

Since I do not own any individual MLPs, as they have K1 tax forms, this addition suits RIG and me just fine.

It pays ~70c per year and at the current price of ~$6.80 it has a yield of +/- 10.3%.

It pays monthly, as a nice bonus, thus RIG just received the first payment as noted in the June dividend chart shown above.

[[JPST]] = JPMorgan Ultra-Short Income ETF

This fund is where I am parking $ cash to get some yield and it also pays monthly. July 3rd was the ex-date for a $0.1998 payment for July 7th.

Looks like ~$1.80-2.20 yearly with a new distribution announced monthly that varies. I put a large portion of RIG cash in this, but not all of it. It has the potential to yield 4.8% if the current payments continue, more if they rise with interest rates.

Future Income Estimate

Income will rise as many of the new purchases and even raises are not fully included in 2023 reported amounts. By using those raises and projecting income I have found I should receive 16.4% more in 2024 if nothing changes. Nothing changing is highly unlikely, but rising dividends are welcome and are now included in the 2024 income.

Summary/Conclusion

The "Trades Log" data for the RIG portfolio at The Macro Trading Factory service has all the exact prices and dates for all transactions and add-ons since the September 2021 inception and since then RIG is beating SPY by 13.14%. June was a quiet, yet productive month, adding the cash parking lot/JPST and getting some income from it starting next month. I am pleased with adding the MLP Fund and both are 2 monthly payers.

There are interest rate hikes coming as yet and the market has yet to accommodate the future for those in my opinion. That also means we will be seeing lower valuations. I provide a want-to-buy list for desired new stocks found under the RIG portfolio, and I am always wanting to add on to existing positions for good value. I am very glad to have 15.25% cash and cash equivalents to do so.

For further details see: