VNQ

Image: Returns Following the Trump Victory

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To download the table for easier viewing, please select the link . Financials: Trump’s Treasury Secretary choice Steven Mnuchin wants to repeal most of the burdensome Dodd-Frank legislation. A steepening yield curve is helping banks and may drive improved net interest margins in coming periods. Goldman Sachs is ripping higher, leading the Dow’s charge.   Crude Oil: The world is moving to a better balance in supply/demand dynamics in the energy markets. OPEC is talking, has agreed to cuts, and expectations for improved economic growth are helping energy resource pricing. High-beta companies such as Continental Resources are rallying hard.   Energy: Capital spending cuts are bolstering free cash flow in the upstream space as energy resource pricing improves. Reduced regulations could help … Read more

Tough Month – My Goodness

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By Brian Nelson, CFA The market rallied hard this month and seemed to leave a lot of the Dividend Growth Newsletter portfolio ideas behind. I’m not going to sugarcoat the results: The Dividend Growth Newsletter portfolio disappointed this month, and for that I’m sorry.  A lot of it may be “explainable” in light of what happened on Election Day 2016, however. I think a lot of investors have shifted capital from the stronger dividend payers to the more-speculative ones in hopes that a new, pro-business Trump administration will be their saving grace. We hope so, but Trump cannot be President forever, and dividend growth investors should consider a long-term perspective, in my opinion, especially when it comes to compounding payouts … 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

Dividend Aristocrat No More: HCP Cuts Its Payout

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Image Source: HCP Former Dividend Growth Newsletter portfolio holding HCP recently was forced to cut its dividend as a result of the spin-off of its beleaguered HCR ManorCare portfolio. We told you it would. That’s exactly why we removed it from the Dividend Growth Newsletter portfolio in February 2016. By Kris Rosemann As the only REIT in the S&P 500 Dividend Aristocrat Index and a former Dividend Growth Newsletter portfolio holding, healthcare REIT HCP (HCP) once boasted one of the most impressive dividend track records available on the market, where 2016 had marked its 31st consecutive year of dividend increases. We’ve worked tirelessly to explain to members that it is only the future that matters when it comes to investing, … Read more

Pop the Bubbly? Everyone Is Getting Rich

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Image Source: Bryan Rosengrant “Imagine a bank that pays negative interest. In this upside-down world, borrowers get paid and savers penalized. Crazy as it sounds, several of Europe’s central banks cut key interest rates below zero in 2014, and now Japan has followed…some 500 million people in a quarter of the world economy (are) living with rates in the red.” — Bloomberg By Brian Nelson, CFA In April 1979, Paul Volcker became the Chairman of the Federal Reserve, and after a series of rate hikes, the federal funds rate reached a high of 20 points by the end of the year and into 1980. Though the move was to combat double-digit inflation at the time, it’s worth pondering what such … Read more

Realty Income Does It Again!

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Image Source: Realty Income (used with permission) By Kris Rosemann Dividend Growth Newsletter portfolio holding Realty Income (O), or ‘The Monthly Dividend Company,’ increased its monthly payout for the 75th consecutive quarter in June 2016 during yet another solid quarter of operating performance. The cumulative monthly payouts in the June quarter of 2016 reflect 4.9% growth over the cumulative payouts in the comparable period of 2015. Backing such an impressive dividend track record has been Realty Income’s steady portfolio of long-term lease agreements. Occupancy rates in its portfolio continue to hover around 98%–the metric ended the quarter at exactly 98%–helping revenue advance nearly 7% in the second quarter of 2016 from the year-ago period, thanks in part to same-store rents increasing … Read more

Best Idea Kinder Morgan Working To Solve Debt Problem

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Image Source: Benson Kua By The Valuentum Team Kinder Morgan is on its way to righting its debt problems, and we love it! When the US government seemingly raises the so-called debt ceiling every few months, how can the public view towards massive leverage and effectively being unable to repay future obligations without making significant changes hold a stigma? In many ways, it has now become “okay” to be buried under mountains of debt. Is it now the norm? Each citizen in the US, for example, owns a piece of its country’s $19.3 trillion national debt, amounting to a whopping $60,000 per person, and this number is growing. That means that each new baby born in America is saddled with … Read more

The Market – On Its Head

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By Brian Nelson, CFA The sector/theme returns have almost been turned on their head as some of the worst performers in the first few weeks of 2016, namely materials (XLB), energy MLPs (AMLP, AMZ), and energy (XLE), have transformed into leaders through the latest data update, April 21. As we outlined in “Alerts: Adding More High-Quality Exposure, (April 2016)” the dividend “track record” growth craze is on, in our view, and yield-rich exposures from utilities (XLU) to the dividend-growth focus itself (SDY) have rallied more than 9% in the year thus far. The metals gold (GLD) and silver (SLV) have also proved to be good trades out of the gates thus far in 2016, up ~18% and 23%, respectively, though … Read more

Alert: Health Care REITs Whacked

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We know better than to make mistakes such as HCP (HCP), but we can’t go back now. We’ve been holding onto the company because it was just a sliver of a position in the Dividend Growth Newsletter portfolio, but today we’re saying good-bye. Here’s what we wrote as recently as November 9, “Dividend Growth Newsletter REITs:” HCP continues to be a lesson learned to us here at Valuentum. The firm’s dividend track record had far too high of an influence on our decision making in establishing a position in the REIT in the Dividend Growth Newsletter portfolio. The fact that the company is the only REIT included on the list of Dividend Aristocrats was too attractive for us to deny, … Read more

Alerts: A Long-Time Favorite from the Bullpen and An Interest Rate Risk Hedge

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We’ve long appreciated the stand-out dividend strength characteristics of Cracker Barrel (CBRL) among the full-service restaurant space, and we see an opportunity to add the company to the Dividend Growth Newsletter portfolio today (see page 5). We’ve outlined our case for Cracker Barrel in the past, “Free Cash Flow Feeds Cracker Barrel’s Dividend Growth,” and while we haven’t quite gotten our price just yet, we’re going to inch forward a bit with a small 1.5% position in the Dividend Growth Newsletter portfolio at this time. The company yields a very nice ~3.4%, and its Dividend Cushion is solid for that high of a payout. One of the areas we’re expecting Cracker Barrel to surprise to the upside is the positive … Read more