Portfolio Thoughts (Nov. 2017)

Every month I like to examine the dividend Portfolio and see what I might do to improve it.  What’s working, what’s not, what stocks are on the purchase radar?  Let’s find out…

First, let’s check out the portfolio activity over the past month.  It was fairly quiet.  The only activity was the establishment of a new position in Hanesbrands, Inc. (HBI).  Check out the link to see why I made this purchase.  I used the proceeds from the prior month’s sale of GWW to fund the HBI purchase.

Portfolio stocks on the rise this past month have been QCOM and HRL.  QCOM rose after a buyout offer from Broadcom (AVGO).  QCOM has now become the largest position in my portfolio thanks to this recent price surge.  It’s possible I might trim my QCOM position if it took another leg up due to an increased offer.  Meanwhile, HRL has had a nice climb after bottoming near the $30 mark.  A better-than-expected earnings report helped their cause.

Unfortunately, I have several stocks on a downward trend recently.  The list begins with a laggard from last month, utility SCANA (SCG), which will be dealing with issues related to a cancelled nuclear power plant project for a while.  I don’t suspect much will change here until some sort of payment from SCG to its customers is worked out, as its customers were being charged in part to help fund the venture.  Also falling in price was Cardinal Health (CAH), with a steep drop from the upper $60s to the mid $50s.  Drug pricing wars, possible healthcare reform, and potential new competition from Amazon has weighed on the stock.  Gilead Sciences (GILD) has fallen from the upper to lower $70s, giving back a good chunk of what it gained over the summer.  Target (TGT) dropped recently after less than stellar guidance.  Finally Omega Healthcare Investors (OHI) fell on the news of its reduced AFFO guidance as a result of trouble with a major tenant paying its rent.

When it comes to adding to my existing positions, all the struggling companies listed above are candidates for additional purchase.  SCG and CAH appear to be the most beaten down, but I’m not ready to dive in just yet.  I’d like to give it time and see their prices stabilize.

I’m still hoping to find an attractive Information Technology investment.  However, the stocks in this sector that I’ve been watching, such as Cisco Systems (CSCO) and Texas Instruments (TXN), have been rising lately, so I’ll wait for a better entry point.

As for stocks that would be new to the portfolio, I continue to watch The Cheesecake Factory (CAKE).  The price has crept up since last month, so I’m in wait-and-see mode, looking for a better purchase price, around $40.  Hitting the radar this month is retailer Williams Sonoma (WSM).  They’ve struggled over the past couple of years with slower sales and earnings growth, and the price has reflected that, but this could present an opportunity should they return to better growth.  I like that they have a good online presence to help compliment the physical stores, and the fact that they have minimal debt.  I think they can deliver 7% earnings growth.  As a result of a falling price, the stock has a 3.3% yield (its highest in years), and a payout ratio in the 40% range – so there’s room for dividend growth.  A price below $45 would interest me, and it’s currently not trading much higher than that.

I’m happy to report that thanks to my recent HBI purchase, and a flurry of recent dividend raises, I’ve eclipsed the $7,200 mark in annual forward dividend income for the portfolio.  This results in more than a $600 monthly average – a goal I had for 2017.  We’ll see how far I can push the annual forward dividend income number before year’s end.

What are you thinking of doing with your portfolio in the near term?  I saw a few portfolios with decent shakeups recently.  Any tax loss harvesting planned before 2018 arrives?  Any races to the finish as you try to reach the goals you set for 2017?  I’m looking forward to your thoughts!

4 thoughts on “Portfolio Thoughts (Nov. 2017)

  1. Nice overview of your thoughts and actions. Thanks for sharing! 7200 in forward income is nothing short of amazing!

  2. CAH is a tough one. I love their history, but their last six months or so have been hard. Their most recent dividend increase was a fraction of their other recent increases. It’s hard to argue with the 32 years of increases though. This is on my watch list for stocks I hold but would like to add to.

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