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High Yield Dividend Income Investing Is Not as Easy as Chasing the Highest Yield

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Dear members: — The skills to successfully invest for long-term capital gains or long-term dividend growth are much different than those required for generating high yield dividend income. Income investing is a much different proposition. However, the skills do center on a similar equity evaluation process, but one that requires an acknowledgement and heightened awareness of considerably greater downside risks. Income investing, or high yield dividend income investing, should at times be considered among the riskiest forms of investing, as many high dividend-yielding securities tend to trade closer to the characteristics of junk-rated bonds than they do most net cash rich and free cash flow generating powerhouses that we like so much in the Best Ideas Newsletter portfolio (1) and Dividend Growth … Read more

2022 Oil & Gas Market Update: “The Outlook for Crude Oil Prices Remains Quite Bullish”

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Transcript Hello, this is Callum Turcan, Associate Director of Research at Valuentum Securities. WTI and Brent have pulled back moderately from recent highs, though near-term futures remain just above $100 per barrel which is well above levels seen last year. As of early July, both WTI and Brent are in backwardation, meaning spot prices are trading at a higher price than later dated future contracts. In other words, the trajectory of future crude oil prices is expected to have a downward slope. Please note that backwardation does not mean that things are going to rapidly deteriorate for the global energy complex, as this dynamic is due to global oil inventories steadily declining over the past two years or so. Backwardation … Read more

Dividend Increases/Decreases for the Week October 15

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Below we provide a list of firms that raised their dividends during the week ending October 15. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week A.O. Smith (AOS): now $0.28 per share quarterly dividend, was $0.26. Agree Realty (ADC): now $0.227 per share monthly dividend, was $0.217. Alcoa (AA): now $0.10 per share quarterly dividend, was $0.09. Avient (AVNT): now $0.2375 per share quarterly dividend, was $0.2125. Cadence Bancorporation (CADE): now $1.25 per share special dividend, was $0.158. Codorus Valley (CVLY): now $0.15 per share quarterly dividend, was $0.13. Commercial Metals … Read more

Dividend Growth Idea Realty Income Is on the Rebound

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Image Source: Realty Income Corporation – August 2021 IR Presentation By Callum Turcan Realty Income Corporation (O) is a real estate investment trust (‘REIT’) that is steadily recovering from the worst of the coronavirus (‘COVID-19’) pandemic. For reference, Realty Income focuses on freestanding singe-tenant commercial properties in the US and the UK. The financial health of the portions of its tenant base that were hit particularly hard by the pandemic, such as movie theater operators, has improved considerably of late. Back during the second quarter of 2020, Realty Income collected 86.5% of its contractually owed rent across its entire portfolio as many of its movie theater and health & fitness tenants, and to a lesser extent its causal dinning tenants, … Read more

Two High-Quality REITs with Promising Outlooks: Digital Realty (DLR) and Realty Income (O)

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  Image Shown: An overview of Digital Realty Trust Inc’s expansive geographical footprint. Image Source: Digital Realty Trust Inc – First Quarter of 2021 IR Earnings Presentation By Callum Turcan The real estate investment trust (‘REIT’) industry is steadily recovering from the coronavirus (‘COVID-19’) pandemic. Generally speaking, rent collection rates are on the rise as vaccine distribution efforts are helping enable the economy to slowly open back up, allowing many commercial activities to resume in earnest. Let’s have a look at the latest earnings reports from two high-quality REITs in this article. Digital Realty (DLR) On April 29, Digital Realty Trust Inc (DLR), a data center REIT, published its first quarter 2021 earnings that beat both consensus top- and bottom-line … Read more

Realty Income Signals Turbulence Ahead, Shores Up Liquidity Position

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Image Source: Realty Income Corporation – First Quarter of 2020 Earnings IR Presentation By Callum Turcan On May 4, the real estate investment trust (‘REIT’) Realty Income Corporation (O) posted first-quarter 2020 earnings that saw its adjusted funds from operations (‘AFFO’) per share jump by over 7% year-over-year, hitting $0.78 last quarter. Realty Income pays out a monthly dividend, and shares of O yield ~5.1% as of this writing. We like the REIT’s business model, which invests in single-tenant commercial properties, and we view Realty Income as well-positioned to ride out the ongoing coronavirus (‘COVID-19’) pandemic. However, we caution that its near-term financial performance will come under fire from some of its tenants no longer being able to (or willing … Read more

Jobless Claims Spike; Restaurants, REITs In Trouble

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Image: DOL. “The advance number of actual initial claims under state programs, unadjusted, totaled 2,898,450 in the week ending March 21, an increase of 2,647,034 (or 1,052.9 percent) from the previous week.” By Brian Nelson, CFA On March 26, the Department of Labor reported a surge in jobless claims for the week ending March 21 to 3.28 million, a number that “shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982.” The economic situation remains dire as the White House struggles to contain COVID-19 amid what could become one of the worst economic periods since the Great Depression, or one that can turn into the next Great Depression. We’ve written about … Read more

Podcast: REITs, Interest Rates and Beyond!

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The Valuentum analyst team talks REITs and the reasons why REIT investors should pay close attention to changes in Treasury rates. Various secular themes across the data center, healthcare, office, and mall REITs are discussed, and an explanation for the sector’s systematically poor raw, unadjusted Dividend Cushion ratios is covered. ~8 mins. Tickerized for various ETFs and the holdings in the VNQ. Brian Nelson, CFA: In September, REITs were officially broken out from the financial sector to their own sector of the S&P 500 — some 30 or so stocks with $600 billion in market capitalization, or about 3% of the S&P 500. Could this change have marked a peak in performance for equity and mortgage REIT stocks? Are investors … Read more

Stock Market Outlook for 2021

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By Valuentum Analysts February 8, 2021 2020 was one for the history books. We covered our thoughts and reflections on the past year in our “2020 Won’t Soon Be Forgotten” article (link here), and now we are looking towards the future. Global health authorities should be able to bring an end to the ongoing coronavirus (‘COVID-19’) pandemic sooner than many had expected as several vaccines have already been improved for emergency use and several others appear increasingly likely to get approved. Global vaccine distribution activities are currently underway, and this should allow the world to slowly return to pre-pandemic activities. Before then, immense stimulus measures launched primarily in developed nations should support global economic activities until the public health crisis … Read more

Dividend Increases/Decreases for the Week February 26

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Below we provide a list of firms that raised their dividends during the week ending February 26. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Acushnet (GOLF): now $0.165 per share quarterly dividend, was $0.155. Alamos Gold (AGI): now $0.025 per share quarterly dividend, was $0.02. Albemarle (ALB): now $0.39 per share quarterly dividend, was $0.385. Allstate (ALL): now $0.81 per share quarterly dividend, was $0.54. Alumina (AWCMF): now $0.029 per share semi-annual dividend, was $0.028. American Homes 4 Rent (AMH): now $0.10 per share quarterly dividend, was $0.05. AMERISAFE (AMSF): … Read more