FSK - Rose's Income Garden January Success: Value And Dividend Review

Summary

• RIG January value is green, rising 2.13% and has outperformed SPY 22.1% since inception in Nov 2021.
• Y/Y January dividends rose 1.78%, but 14.52% if KEN is excluded and cash rose from ~3.7% to now 14.6%.
• January dividends are up 2.5% from Oct Q3, the yield near 4.4% with the rising value and lots of cash.
• 24 companies paid which included 7 raises, 1 special and a cut; all listed by pay date, amounts, yearly statistics, and yield at current price.
• Transactions included 2 sells and 1 buy to bring portfolio size down to 79 stocks.

Rose's Income Garden "RIG"

RIG is a defensive income-quality value-built portfolio with 79 stocks coming from 11 sectors. RIG contains investment-grade common stock along with high yield ("HY") business development companies ("BDCs") and real estate investments. The goal is to maintain 50% of the income from defensive sectors/ stocks and to keep a minimum dividend income yield of 4% or more which is currently 4.4% while holding 14.6% cash.

RIG Portfolio Income/Dividends

January dividends payments came from 24 out of 79 companies = 30% of the total with 3 of those being monthly payers. Happily there were 7 raises, 1 special and sadly 1 cut. The stock ticker, name and amount are in bold for the raises along with more discussion in the comments. The stocks are listed in order by date payment was received.

The chart below uses the following abbreviations:

Date Rec'd = Date payment received

Div/sh $ = Dividend per share paid.

Yearly $ Div = Current yearly estimated known dividend payment

Div % Yield = dividend yield calculated using the current shown price and yearly known dividend

Current Price is the price Feb 2nd, 2023.

Dividends were up in January Y/Y 14.52% if the nice KEN $3.50 Jan dividend is subtracted from the total, as they have not paid as yet this year. They also paid a huge $10.25 payment in July last year, so I expect something from them soon, hopefully in February, but nothing has been announced.

January Raises- 7

1- Carlyle Secured Lending- 10% Raise

- Financial business development company "BDC"

- no S&P credit rating.

It has offered normal and special raises of varying amounts this past year. It started at a total of 39c for the January 2022 payment and then rose to 40c for the following 3 payments last year. It -Raise to 44c for this January 2023 payment, which consisted of 36c regular and an 8c special.

2- FMC Corp - FMC -9.4% Raise

- Material sector company dealing in chemicals, fertilizers for agriculture

- S&P BBB- credit rating

- 9.4% raise and with a huge 30%+ 5 year DGR; easily keeping up with inflation

3- FS KKR Capital - FSK- 1.5% Raise

- Financial business development company "BDC"

- S&P BBB- credit rating, great for a BDC

- 1.5% raise from Q4 includes regular plus special.

4- Merck - MRK - 5.8% Raise

- Healthcare sector- "big Pharma" company

- S&P A+ credit rating

- 12 years of rising dividends and a 9.2% 5yr DGR.

5- PennantPark Inv - PNNT -10% Raise

- Financial business development company "BDC"

- no S&P credit rating.

Nice raise from Q4 but has raised it lots from the 12c it started at in 2022.

6- W.P. Carey- WPC - 0.4% Raise

- Real estate sector triple net REIT international property owner.

- S&P BBB credit rating

- 25 years of rising payments that usually come in small annoying quarterly amounts.

7- Ares Dynamic Allocation Fund - ARDC- 4.9% Raise

- CEF/ closed end fund investing in fixed income markets of mostly Europe. It also invests in high yield mostly short duration lower investment grade loans making it somewhat risky.

- It raised the dividend by $0.005 in 2022 and now into 2023.

- Pays monthly.

Special Single payment - TCPC

- Financial business development company "BDC"

- S&P BBB- credit rating; great for a BDC

TCP-BlackRock made this special payment to add to the normally expected quarterly of 32c received in 22Q4. This makes the total estimated 2023 dividend $1.33.

January Cut- 4.8%

Ready Capital- RC

Commercial Mortgage REIT

The only mREIT in RIG and it will probably stay that way for some time as I still like the income. It's a hold.

Transactions- 3

Sell -2

PennantPark Floating Rate - PFLT

Financial business development company "BDC" which I considered to be getting overvalued.

Newmont Corporation - NEM

Gold miner that was back up in price and perhaps nearing a peak, so I considered it a good time to leave and make a small profit.

Buy -1

Owl Rock Capital Corp - ORCC

- Financial business development company "BDC"

- S&P BBB- credit rating which is great for a BDC

It seemed to be undervalued and therefore a great replacement for income from selling PFLT.

Summary and Conclusion

The goal of RIG is first and foremost income, but retaining value is also important. It does so with having quality low debt/high credit rated companies with the primary goal of maintaining and growing safe income.

Happy to say it has stayed green as 2022 ended and now moving into January 2023. The Rose portfolio/ RIG continues to outperform [[SPY]] by double digits from its inception with a now 4.3% dividend income yield and 14.6% cash. The search continues for more dividend growers with a "WTB" /want to buy list of Non-RIG stocks available for subscribers to follow. Buy under prices and a deep value buy price is provided for those and all 79 RIG current stocks.

If you desire more information on RIG, The Macro Trading Factory service and The Funds "FMP" portfolio, please click on the bullet point at the beginning of this article.

Happy Investing to All!

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