Just Buy Some!!!

Friday, May 7, 2021. A word about a favorite, buy-and-hold-forever idea, Realty Income, symbol O.

“Realty Income (NYSE: O) – When I first recommended Realty Income to readers back in August 2013, it owned just over 3,000 rent-earning properties across the country. Today, the portfolio has more than doubled in size to 6,592 properties.

Incidentally, 6,452 of those buildings are currently leased, for a robust occupancy rate of close to 99%. Most of these free-standing properties are leased to essential businesses (gas stations, pharmacies, supermarkets, convenience stores, etc.), so Covid only dealt a glancing blow.

More tenants equal more cash flow. When Realty Income was first added to the portfolio, it was generating $274 million in yearly adjusted funds from operations (AFFO). Now, the company is posting $297 million in cash flow per quarter. I don’t normally compare quarters to fiscal years. But that’s the point: Realty Income is hauling in more profit in 90 days now than it did in an entire year back then.

That explains why it has been able to relentlessly increase dividend distributions… for 93 consecutive quarters.

On average, Realty Income has been purchasing about 385 new properties annually, expanding its empire block by block. At that pace, the portfolio would hit 10,000 properties in 2030. But something has just accelerated those expansion plans – and this milestone will now be reached in the next 3 to 6 months.

You guessed it: an acquisition. Realty Income has just unveiled plans to acquire VEREIT (NYSE: VER), creating a $50 billion juggernaut that will be the nation’s sixth-largest real property owner.

This will be an all-stock transaction. While debt is cheap, you can’t fault Realty Income for using its shares as currency to close this deal considering they have climbed about 40% over the past 12 months – and the fact that they trade at a premium to NAV (net asset value).

Needless to say, the union of these two real estate owners will drive AFFO higher in dollar terms. But there will also be many more shares outstanding after this transaction. The question is whether the deal proves to be accretive or dilutive on a per-share basis.

Fortunately, it appears to be the former. Prior guidance called for AFFO of $3.46 per share in 2021, which would have been a tepid increase of just 2%. Now, management is forecasting this key metric to increase by more than double-digits to $3.80 per share – raising the ceiling over the annual dividend, which now stands at $2.82.

I don’t always like mergers in this space because they can misdirect a company’s core focus. In this case, Realty Income is known for being a retail landlord. Not just any retail, but preferably non-discretionary sectors that don’t face online competition… renters like Taco Bell, Circle K, and Family Dollar.

VEREIT owns many of these as well, but also has a less attractive segment comprised of 100 office properties leased to financial firms, insurance companies, and others. While rent collections in this segment are strong (99%+), I am still glad that these office properties plan to be spun off into a separate entity.

What’s left will be 10,300 single-tenant properties, nearly half of which will be leased to dependable investment-grade renters.

Action to Take:
As with most tie-ups, this merger will increase the company’s scale and yield considerable cost savings synergies – about $35 million per year. With the strongest credit rating in its peer group, Realty Income will also be able to shave off interest expenses by refinancing VEREIT’s debt under better terms.

Not only will the accretive deal lead to larger dividends, but it will also enhance the “durability” of those payments. With largely complementary customer bases, the pro-forma $2.5 billion annual rental income stream will come from well over 50 separate industries, minimizing a downturn in any one group.

The market likes this pairing, with both the acquirer and the takeover target rising on the news. With 600 straight monthly dividends, Realty Income remains the textbook definition of a “Lifetime Wealth Generator”.“

This is just one of those you buy and hold for life, or longer. Real estate can never go to zero, and in inflationary times, its value goes UP. I own some, it’s not a rocket ship, but a true “Steady-Eddie.” It should be in the core of any safe-dividend growers’ dividend income portfolio holdings!

Harold

Our April Portfolio Dividend Income

Tuesday, May 4, 2021. The monthly brokerage account statements are now available, and we got paid. I enter all data into one Excel sheet. It adds it up, and I compare income from each quarter with those behind it to track the growth.

We are all about safe-dividend income and the growth of our portfolio dividend income… capital growth or appreciation is secondary here, but it is always comparable and favorable to the market as measured by the S&P 500.

So, for April we were paid by these 20 holdings: AFG, BST, BSTZ, COR, HASI, IIPR, LRCX, MAA, MAIN, MO, Mon Fnd, NLY, O, SCHD, SCHV, SII, UNH, UTG, WPM and XEL.

The average dividend per share one year ago was $2.75, but now stands at $3.08 a share. That average dividend growth per share is 12%; just what we have been aiming for! If we don’t reinvest dividends, or take cash to accumulate more shares or holdings, our income from investment is slated to double in 6 years time if we do nothing.

The dividend yield from our portfolio holdings is now up to 3.87%, since we only restarted this last September. Left alone to grow as it is, could it be yielding to us something near 8% in little more than 6 years from now, in 2027? This is possible!

So, who gave us pay raises last month? Of the 20 payers in April, we received increases from two. CCOI and EVA. CCOI raised us from $2.52 one year ago to $2.97 a share, and EVA raised us from $2.69 one year ago to $3.11. That CCOI raise is 17.86%! And EVA’s was for 15.61%… Not too shabby! I’m grateful for them both.

The wife and I are both in our retirement now, and we do not need to take any of our portfolio retirement income to meet living expenses. Our retirement income from all other sources is more than enough to meet all our need. But, if we ever do, it’ll be there for us. In the mean time, I’ll continue to manage and measure the results and report them here.

From time to time, I’ll list acceptable stock shares that meet my search criteria… of which there are very few… and, I’ll also chime in with a market timing call as well. I like to add shares, or maybe a new position when I measure market risk to be low. I’ll conduct a search and update acceptable candidates sometime in the not-too-distant future. They rarely change, so there’s little need to look frequently.

Harold

Love The Income!!!

Tuesday, April 13, 2021. The brokerage statements for March have been out, and I have updated our file. We got a lot of payments… from 29 of our holdings! Let’s see, we got paid by: ABC, ANTH, AVGO, BIP, BIPC, BLK, BST, BSTZ, BTG, CCI, CCOI, DLR, ES, FLO, FXO, HD, KRE, MAIN, MJ, Mon Fnd, MSFT, NSA, O, SCHD, SCHV, SII, UNH, UTG and WEC.

Income was up 75.48% over last September, when I started to put this portfolio together for the wife. The current yield of our holdings is 3.54%, and rising rapidly… How rapidly? Well, the holdings were paying out an average of $2.74 a share one year ago, and today the average payout per share is $3.07. This works out to be a 12.04% dividend increase “pay raise.” If income should continue to increase at such a pace, without reinvesting the income, or accumulating any more shares or positions, dividend income would double every 6 years, and could be something like a 7% yield on the invested monies… Seven Percent!!!

But, the idea is to go about reinvesting the current income, and to add any other attractive positions I might find appealing. By doing so, it’s possible to double the income in as few as 4 years or less, though not the yield.

We’re ecstatic with the progress we’re making in just the first 8 months of our effort. Our current retirement income, from all other sources exceeds our current expenses, and so we have no need to take the income, and have no plan to do so anytime in the near future.

We love the income, and we love building a safe-dividend-growers portfolio. You can do the same and retire on the income… time is the hero of this plot, but by building your very own compounding growth machine, as we have, it’s possible to plan your retirement income amount… revise that figure upward as ever you might need to, and try to grow your portfolio income as fast as possible, until you don’t need your employment income any longer… and RETIRE on the portfolio dividend income that has replaced your entire employment income… without tapping your principal!

We did it… you can, too!

Harold

Is THIS the Beginning of the End?

Monday, March 22, 2021. That’s right. Not a word since the 4th. I am so incredibly busy! I’m enrolled in an online university course at this time, and it is kicking me in the backside like nothing I’ve had to deal with in a good long time!!!

My market timing effort did call the bottom in the sense that I had said that it was immanent, and that I had thought that it would commence just about the very time that I had said so. It did bolt from out of the gate just a bit earlier than I had anticipated, but as I explained to a friend who was looking for it along with me… News trumps technicals every time.. and, it was the news of the stimulus plan and its passage that gave the markets the kickstart that it experienced just since I last posted on the 4th.

I managed to arise early this morning, and since I got a lot completed, I was able to update the timer. Stocks have been on a good rise for the past 8 trading days since the 5th, BUT the last 2 days weren’t so hot, and the indices were not able to overcome a level of resistance that they bumped their head up against.

Beyond that, there has been incredible sector rotation out of what had been the very high-flying technology stocks into the more mundane industrial and value-type issues.

I had written earlier that bottoms tend to be events, while tops are so much harder to discern, because they tend to be rather longer, drawn-out processes. What we are experiencing right now, as money is moving out of riskier assets, and into safer, lower-risk assets, can typically be viewed as a move much more associated with that idea of a topping process taking place.

As a better sense of the picture that is coming together… chart the OEX for one, and note that a most clear Double-Top has currently formed. That is going to serve as pretty serious resistance until, of course, it should be broken. But, the question needs to be asked… How serious and for how long will it remain so? We can only watch and see, as such a top as this can remain as overhead resistance for quite some time…

Especially as we look at the recent price action of the QQQ, which gives that evidence of the sector rotation I mentioned. See how that the QQQ has NOT double-topped as the OEX has, but rather, it would appear to be putting in a rather precarious Head-and-Shoulders top, with the left shoulder being higher than the right… If this currently recent intraday high on last Tuesday should hold and last for awhile.

Is this the working through of that process of forming an actual market top that will possibly last for quite some time? And, might this be the beginning of a far greater, longer and steeper decline? The easy answer is this: The market put in a measurable low-risk market entry opportunity low back on the 4th and 5th, and it would appear that it is trying to turn, after hitting overhead resistance last Tuesday and Wednesday… so, we have our borders, our guardrails, our points and places of reference where we need to pay the closer attention.

If we should rise, and breakout to new highs in the S&P, and over the current lower resistance level of this right shoulder in the tech-heavy QQQ, the signal would be be that it can run another leg higher still…

But, if the lows of the 4th and 5th, at the more recent level of support should fail and breakdown, a flag of very serious caution needs to be run up, and we may be witnessing, right here and now… the beginning of the end. Is it? Time will tell, and we will keep a watch for one outcome or the other.

Harold

Looking Right At It!

Thursday, March 4, 2021. Stocks declined again today! And the OEXpert 7 is liking it more and more.

The price of the OEX has gotten down into its 2 lower trading bands. That’s a good sign… Is it enough? We’ll now say that it is in that camp where it is saying that risk has become low. F1, however, is at 12, and I’d much like to see it get down to 10… Maybe one more day? F2 has gotten to that same place where the end of October low-risk reading was. That’s a positive. F3 is at 34, if it’s going to join this party, it’s going to need a couple or 3 more days, I would think. The scale on F4 is temporarily corrupted until we can get past the last March debacle. But, F4 had gotten to places last September and October that I am able to compare the present decline to, and it would seem to need some more time, like F3 would. F5 is only at 60, and needs to get to 40 to signal… It needs more time still!!! Finally, F6 is only down to 18, and its lower trading band. We really need 10, and would love to see ZERO.

Doing the same with data on the tech-laden QQQ… F3 isn’t at 10 there either. F4 does signal for it. F5 is at 60… and, F6 looks to be at 12… But, it’s all still saying to me, “Not Yet!!!”

Let us wait and see what next week brings, but I’d already gone on record some time ago, that it would be the better part of 10 trading days or 2 weeks before we’d see what it is that I would be awaiting. It’s not here yet, but I could truly see it finally falling into place in the Xpert for me in this next week.

It’s time to start considering what you might like to do. Over the weekend, I’m going to start putting together something of a little shopping list. What’s looking good to be adding some shares to among the safe-dividend growers?

Harold

And the OEXpert 7 is Saying…

Wednesday, March 3rd, 2021, after the close. I present the OEXpert 7 Stock Market Timer at our traders’ group Zoom meeting tomorrow evening. I mention it so much, a member asked me about it.

What’s it trying to tell me right now… Well, it’s right on track for that which I had previously mentioned… How that it would need much of this week before it was going to give me a low-risk market entry signal, and that is just how it is working out right now.

Timing the S&P 100, the OEX, I input the data manually, go through the indicator sequence. First up is the price of the index itself in relation to it upper and lower trading bands. It has still NOT gotten to either of its two lower trading bands. I’m already on record as saying it needs to get down into the 1700 area… The 100 closed today at 1733.59. It could go some 2% lower, and it would meet that requirement. The F1 indicator is presently at 12, below its lower band, and is technically a signal, but it really is not ever as reliable as when it gets to 10 or lower. It could do that as early as Thursday! F2 is always first and early… No surprise then that it is already signaling, which means nothing anymore. I should simply quit using it, and writing of it. F3, at 41, would need to get to 10, and it does not have to participate every time, so if it should not get there… I don’t require it to. F4 has gone dead flat sideways at a level that would require more time to get it down to its signaling place… perhaps another 2% decline in price would do that. F5, like F3 and F4 is just not getting there… at 67, and needing to tag 40. I don’t see that happening quickly. Finally, F6 looks to be at 24. Needs get to 10 or lower. I’m not thinking we get any low-risk entry signal this week… let’s keep our eyes open for what Thursday and Friday brings, and I’ll enter the data, and report what I find. If I don’t get back here ’til the weekend, don’t let that concern you any.

Here’s to the next low-risk market entry opportunity… may it present itself in just such a way that I might be able to call it pretty much to the day.

Harold

Payday!

Wednesday, March 3, 2021. It’s “Payday”! Brokerage statements are available on line. And, what have we got? As you know, I go for safe-dividend growers, and have a portfolio of them for the sole purpose of deriving a dividend income for retirement purposes. I want to take the income, and leave the principal alone to keep right on working for us… and that’s just how it’s working too!

In February, we received 16 dividend payouts into our accounts. They came from: ABBV, APO, BMY, BST, BSTZ, COST, CVS, EVA, INVH, LEN, LNT, MAIN, NEP, NXST, O and UTG.

Now, I see in that table that I maintain in Excel, that I received more from ABBV, BMY, CVS, EVA, INVH and NEP. Nearly all should be from dividend increases, while some might be from having added shares. Lemme check and see…

First, February’s income was 8.13% greater than November’s income, just 3 months, one quarter ago! That’s not insignificant, so let’s learn how that happened. Now, since I only REstarted a safe-dividend growth portfolio for the wife last September, it will be possible to start 6 month comparisons in April, after all of March is in the books. ABBV had raised in November, from $4.72 to $5.20 a share, and this was the first dividend having that raise. Nice. BMY had raised in December, from $1.80 to $1.96 a share to account for our increase. It looks like I likely added some shares of CVS to account for the added income from it. EVA has been raising steadily, every quarter, so that explains that increase. INVH raised in February from $.60 to $.68 a share. NEP has also been raising quarterly, and this time last year it was $2.04 a share, but is now $2.34. Very nice!

The portfolio dividend yield is 3.78%, and steadily rising. The average dividend per share for our holdings one year ago was $2.76 a share, and today stands at $3.04 a share. That is equal to a 10.14% income growth. Ten percent income growth… in one year’s time! A 10% “Pay Raise” over the past 12 months!!! That’s really good stuff… Did your boss give you a 10% pay raise in the past year? I suspect not.

Now, I see that in the month of February, other new pay raise dividend increases appear on my charts… What are those? We’ll be seeing a pay raise from ANTM, from $3.80 to $4.52 a share! That’s going to be an 18.95% increase!!! I see there will be a cut from APO… from $2.31 down to $2.02… We’ll look into that, and maybe not keep it any longer. More on APO later. BIP will be raising us from $1.94 to $2.04, for a 5.15% increase. It’s electric utilities, so that’s what they do. You expect that. BIPC will also be raising, from the same $1.94 to $2.04. That was a split-off, an off-shoot from BIP, and price advanced rapidly afterward. CCOI will be raising us from $2.78 to $2.87. This is an internet service provider utility. ES, an electric utility will raise from $2.27 to $2.41. EVA had raised from $2.90 to $3.00 this last quarterly increase… it was only $2.65 a year ago, so the total raise is up to 13.21%. Not shabby at all! We’ll see an increase from HASI of $.04 per share next time. Home Depot, HD, is raising, from $6 to $6.60 a share for 10% bump. INVH had raised from $.60 to $.68 for a 13.33% raise. NXST had announced an increase in February from $2.24 to $2.80. That’s a TWENTY-FIVE PERCENT raise!!! I’ll take it! SRE will give us a bump from $4.18 to $4.40… not bad coming from a natural gas utility! Finally, another electric utility, XEL, announced its raise from $1.72 to $1.83.

I look for all those in the next statement or two to come. So, March will become comparable to last September, when we got re-started into these, and the added increased dividend income growth… will be entirely WELCOME! Why isn’t everyone doing this?!?!? The wife and I are having the time of our lives… we are both now retired. Her pension income commences in this month, too! It’s all good…

One in five Americans engage in anything like serious retirement planning. Of those that plan, or get a plan, one in five attain unto the goals of their plan. We started our own planning about 2011, ten years ago. We worked our plan, and we attained unto the goals we had set out for ourselves. We are there, and we are in a good place financially for all the rest of our retirement.

What’s in your portfolio? Harold

And, Getting Closer…

Friday, February 26, after the close. The market has continued lower, and the indicators are wanting to draw closer to their respective signaling places. Are they going to make it all the way? Will I get a signal?

I do have a bit of a dilemma. Let me explain… I track GLD, QQQ and OEX in the timer. But I am getting this incredibly rare circumstance where the indicators for the tech-laden QQQ and the more traditional industrial based OEX are not correlating near as close they typically do. This is likely because tech has been taking it harder than the general market.

Going by the OEX, I see that price is getting near its two lower trading bands, and could be there next week. The F1 indicator is under its lower trading band, and is at 14. Even one more day could bring it to 10, and a signal. F2 is first and early, as always. F3 is only at 50… not close to 10, and may not participate this time. That’s not a problem. F4 has been hard to read, but I see where the last 2 signals were, and it would need much of next week to join the chorus. F5 is only at 65, and needs to get to 40… much of next week would need to get it there. F6 is typically very reliable… but is only at 43, and needs to get to at least to 18 now… 10 would be much better… and, O, how I love when it goes to ZERO. It needs much of next week, too. IF I were relying on the OEX, I’d say relax for a bit… give it some more time and room. But…

Looking into the QQQ, Price has gotten into its 2 lower trading bands, which is a good sign. F2 is first and early. F3 is at 40, and plunging toward 10. It could be there in this next week. F4 looks to be at -11, and would signal with a -20. It could be there in this next week. F5 is at 69. Needs to get to 40… could be there toward the end of the week, I suppose. BUT, here is the one that is getting my attention… F6 for the QQQ is already down to 18, at its lower trading band… technically that’s a signal. Again, would love to see 10 and would get excited if it were to touch zero.

I’m leaning toward this opinion. I need to update daily this next week. I need to pay closer attention than usual. I need to begin to count the number of indicators that are willing to fall into their respective signaling cases… and, I need to begin to sit up and see if I won’t be able to maybe make a call within these next 10 trading days.

If it should turn and launch before I can confidently call it… that’s a sign of market strength, as it just has no patience and can’t wait. I used to let that happen and not get on board… the train would pull out of the station… without me. That was years ago. I’ve learned my lesson. This is the time to begin to become alert. While others might be getting more frightened, I get more interested. Volume has been high… a good sign. Here’s to nailing the bottom, if I am able to again. It may be getting near.

Harold

Headed in the Right Direction…

Thursday, February 25, after the close. Well, I said we’d need more downside to move the indicators into place… I’m so glad it’s listening to me! How much more?

I’ve updated, and here is what I’ve got… The OEXpert 7 says this: Price is not yet at its two lower trading bands. I’d previously said that it would need to get around 1700 on the OEX… another 2% or so more. F1 is at 22 and its lower band… That sort-of signals… Get to 10, and it’s a GO. F2 has signaled… That doesn’t matter. F3 is at 60… 10 is the signal. It doesn’t always get there, so I’ll watch it, but not worry. F4 looks to be at about -10, and it needs some yet. F5 is at 68… I’m wanting 40 to believe. Finally, F6 is at 52, we’re going to need at least 19 to signal. 10 is much preferred, and a 0 kills it!

So, this isn’t difficult the Xpert says… No way. Not yet. Let’s see what another week or two might do for us. No need to start getting antsy. Keep your powder dry.

In the mean time, I’ve scaled into what I think might be our last purchase in the crypto space… We have BTC and ETH. Our BTC is at an average cost of $17422, and our ETH comes in at an average of almost $625. The present gain is 167%. I’m watching precious metals, too. I need to study it just a bit more, but they look to be basing now, in preparation for a possible new advance? IDK. We’ll see. Haven’t gotten to that yet.

Harold

Looking For a Low-Risk Market Entry Opportunity

Wednesday, February 24. Some were wondering, with the recent pull back just how close might we be to a low-risk market entry opportunity? I promised to update the timer and get back to them.

The OEXpert 7 Stock Market Timer has a phenomenal record of locating market bottoms. Is it about to register the next one?

I’ve added the data, and the price of the OEX has a ways to go before it would be in that area of its two lower trading bands in the program, where risk might said to be low… The OEX would need to slip back to around 1700 before that would happen. It’s in the 1780’s as I type. The F1 indicator has been working its way down, and is now at 31 or 32, on its way to a signal at 20 or lower… 10 is usually much better. It needs some time. F2, always first and always early. doesn’t matter. It’s about to signal, but I have long since learned to ignore it as the Chicken Little signal! F3 is also working off from a recent high of over 80, but is only down to 69. It would require a good bit of time to get down to 10 and a signal. F4… pretty much the same. It needs time. F5, like the others, has turned down… was just over 100, is about 72, but needs to reach down to 40 to be meaningful. It’ll require more time. A look at reliable F6 tells a similar tale. It rolled over from near 90; is now down to 67, but needs to get all the way down to at least 19… 10 would be nicer, and I love it when it tags 0.

So, there you have it, folks. Risk has come off some in recent days, but nowhere near enough to satisfy the Xpert. This is all very fine by me. I’m in absolutely NO hurry whatsoever. I’d say that this is going to require at least a couple of more weeks of price action other than rally. We’ve seen that of late, but not near enough to wring the risk out that the timing indicators have registered since the end of last October… when it last said, risk is low, you can be a buyer!

Keep me honest, and ask me to get back to this from time to time. I want to call it out when the timer sees it!

Harold