Rose’s Income Garden Rises 6.1% YTD, Dividend Yield 4.9%: May Review

​RIG

Rose’s Income Garden “RIG” is a defensive income-quality value-built portfolio with 89 stocks residing in all 11 sectors. It contains mostly investment-grade common stock but also has 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%, which has risen from 4.8% in April to now 4.9% even as the portfolio value rises.

The most recent RIG changes are revealed and discussed under the May transactions section. The complete RIG portfolio is listed and found at The Macro Trading Factory (“MTF”) along with a trade section, performance charts, dividend “ex” and payment dates, and a newly added “WTB”/Want To Buy listing for all of RIG and a quality “Non-RIG” watch list. MTF also has macro “FMP” and “SOP” portfolios run by The Macro Teller which are very much outperforming the market through primarily fund investing that offer an easy, laid-back non-intensive successful investing method.

Portfolio Value

Portfolio Value remains green and up 6.1% year to date “YTD,” which is second best to March when it was up 6.78%. It continues to beat most all indexes YTD easily and by double digits as shown for some in the list below:

– S&P down 13.3%

– Dow Jones down 9%

– Russell 2000 down 17%

– RIG is + 6.1%

RIG beats these easily by ~15-20+%, thus is successfully green along with its 4.9% dividend yield.

Portfolio value has been helped with owning the defensive sector stocks, especially from healthcare and utilities. My last article here, written in mid-May, reveals information about the RIG 9 healthcare stocks.

RIG Income – Yield is 4.9%

May Income beats 2021 by 25.35%, but actually as expected was less than February Q1, being down 12.69%. The reason being no dividend from 2 companies, Vodafone (VOD) (OTCPK:VODPF) and Ontrak, Inc. 9.5% SER A PFD (OTRKP), and with Danaos (DAC) moving its payment to June. No worries, RIG will catch up in June and continue to provide more income throughout the year.

The chart below reveals 19 company payments by date received along with the 1 raise.

Abbreviations used are as follows:

Div = Dividend.

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

Current $ Price is for the end of the day market price on June 3rd.

Stock	May	Div /	$ Yearly	Div %	Other Dividend	6/3
Ticker	Date	share	Dividend	Yield	Comments	Price
(PFLT)	2	0.095	1.14	9.60%	Monthly Pay	11.87
(BMY)	2	0.54	2.16	2.87%		75.17
(CVS)	2	0.55	2.2	2.32%		94.9
(T)	2	0.2775	1.11	5.31%		20.9
(VZ)	2	0.64	2.56	5.04%		50.81
(SLRC)	3	0.1367	1.64	10.39%	Monthly Pay	15.78
(GD)	6	1.26	5.04	2.19%	Raise from 1.19	230.13
(MA)	9	0.49	1.96	0.55%		357.82
(BTI)	9	0.68	2.98	6.75%	Exch Rate	44.14
(DNP)	10	0.065	0.78	7.00%	Monthly Pay	11.14
(DLNG-A)	12	0.5625	2.25	9.25%		24.32
(CEQP-)	14	0.2111	0.8444	2.88%	Fixed Preferred	29.33
(OHI)	13	0.67	2.68	9.24%	no raise	29
(MTBCP)	16	0.2292	2.75	10.20%	Monthly Pay	26.95
(ABBV)	16	1.41	5.64	3.83%		147.17
(NNN)	16	0.53	2.12	4.90%		43.3
(NYCB)	17	0.17	0.68	7.05%		9.65
(SBRA)	28	0.3	1.2	8.86%		13.54
(ARDC)	31	0.0975	1.17	8.69%	Monthly Pay	13.46
(OTRKP)	0	0.5938	2.375	54.60%	Suspended	4.35

The Raise

General Dynamics (GD) is in the industrial sector and has paid rising dividends now for 31 years, which I consider defensive. It has a quality “A-” credit rating and has a “Value Line” safety rating of 1, which is the best; the price tends to be cyclical, and I see it sitting near fair value plus.

Monthly payers:

PFLT – PennantPark Floating Rate Capital

“BDC” Business Development Company has a high yield of 9.6% and rarely changes the payment amount or the date.

SLRC – SLR Investment Corp. – information below under May transactions add-ons.

DNP – Duff & Phelps Select Income Fund

“CEF” Closed End Fund primarily invested in utilities/ bonds with constant monthly payment of 6.5c. The yield currently is 6.8% with its price selling at a bit of a premium.

MTBCP – CareCloud (MTBC) preferred

Healthcare technology preferred issue has a 10.2% yield and pays 22.92c monthly. It reveals the most recent payment dates 3 at a time and has started calling in shares in smallish batches at $25. Therefore and most likely I will not own it for the remainder of this year, but until it’s completely called, it’s mine or if the price eclipses the payment value, I will sell it.

ARDC – Ares Dynamic Credit Allocation Fund – information below under May transactions.

No Payments:

These no payments were as expected and no surprise, but should be mentioned.

Vodafone

Vodafone is a telecommunications company headquartered in the UK and pays 2x per year in the months of February and August. Thus, as expected, no May payment. The announced dividend of $0.4725 was ex on June 3rd, to give it a yearly dividend of ~99c and won’t be paid until August. The next dividend announcement will come in November for an ex-date in December with payment in February 2023. It’s an annoying and tedious method that many foreign companies use, but I hold on, because of the ~6% yield as a decent defensive income stock.

OTRKP – Ontrak, Inc.

Ontrak is a tele-health technology communications company that has suspended its preferred share payments. The normal payment is $0.5938 per quarter or $2.3752 per year which at $25 price gave it a 9.5% yield. I did collect distributions for some time, but there has only been silence lately from the company, not good. When and if restarted they would pay all past distributions. It is the black sheep sitting in the portfolio for now, which it would seem I always have at least one, this is it.

DAC – just delayed

Danaos Marine Shipping headquartered in Greece is relatively new for the portfolio and offers its dividends close to a quarterly payment schedule, but not quite. The normal May payment will come in early June.

May Transactions

Buys -2

(NRZ.PD) – New Residential Investment Corp. preferred shares D

BDC company with preferred shares that pay $1.75 yearly or $0.4375 per quarter in February, May, August and November. I did not buy it soon enough to receive the May distribution but look forward to the 2 remaining in this year.

Trading Alert to buy for RIG was given in MTF service on May 3rd.

ARDC – Ares Dynamic Credit Allocation Fund

CEF – fixed income mutual fund invested in bonds of generally short duration loans. I have repurchased it at a more favorable price and yield now at 9.6%. The dividend is 9.75c monthly and is paid on the 31st.

Trading Alert to buy for RIG was given in MTF service on May 12th here.

Add-Ons -2

STOR – STORE Capital Corp. (STOR) is a real estate triple net with mostly single-tenant operations with longer leases and was mentioned more in-depth last month in the April article here. It has over 2500 profit centers in the US. It has a 5-year dividend growth rate of 5.9% with the last 2 years being 4.7% with 7 years of rising payments. Rated BBB by S&P. Trading Alert to buy for RIG was given in MTF service on May 2nd.

SLRC – SLR Investment Corp is a CEF that designates itself as a BDC and specializes in first lien senior secured and specialty loans and most recently went to paying monthly. The payment is $0.1367 or $1.64/ year and currently has ~ 10.4% yield which is considered high yield “HY” investing. Trading Alert was given to buy for RIG on Feb 23rd in MTF service.

​Summary and Conclusion

The 50% income goal from defensive sectors and stocks continues to be met, but slips from time to time. Surprisingly, those defensive investments comprise 43 stocks or ~50% of the 89 stock portfolio. The remainder or 46 stocks consist of the non-defensive sectors and thus contribute sometimes with quite gigantic dividend/bonus payments to move the totals from the goal. Below are some very honorable contributors to RIG income lately:

– LyondellBasell Industries N.V. (LYB) in the material sector – raised dividend by 5.3% and has given a $5.20 bonus payment!!

– Star Bulk Carriers (SBLK), industrial dry bulk shipper, continues to pay amazing dividends with the most recent to be $1.65 for June. Not a raise, but still very much appreciated.

No complaints, but I do know these are not reliable and can be variable, therefore I have no concerns with staying true to the 50% defensive income goal.

Non-RIG Stocks

I look for quality low debt/high credit rated companies and review those in RIG often and now provide a nice “WTB” want to buy price list for all of the 89 stocks along with a Non-RIG list for subscribers to follow.

The search is always ongoing and the goals and specifics I want to include the following:

– quality rated dividend-paying stock.

– undervalued, but can be at fair value for extra quality ratings.

– low debt/great high credit rating.

– pay out and cash flows to easily cover the dividend along with a rising dividend growth rate.

– defensive in nature with products or services I understand and can easily follow.

The market is showing weakness as we head into the summer and midterm elections. Cash should be king and therefore my actions are very much in line with preserving it, currently at ~3.8% in RIG. With an established quality dividend portfolio like RIG, I am confident it will ride the valuation roller coaster while the dividends/income continue to flow in as expected using the quality expectations and goal/s mentioned.

Happy Investing to all.