The dividends of August are a mild bunch. Not only are they mild, they are a small group too. My three monthly payers, Horizon Technology (HRZN), Realty Income (O), and Stag Industrial (STAG), made their regular appearance. The heavy hitter, batting cleanup and driving in the most funds, is the embattled MLP, Energy Transfer (ET).
Energy Transfer is trading well below Morningstar’s fair value of $20.00. The recent market value has hovered in the six dollar range. If you were to buy at let’s say $6.20, you’d be netting an annual dividend yield of 19.67%. The coverage on ET is prolific on platforms such as Seeking Alpha . The dividend yield is tempting, but there is a lot of downward pressure and negative energy around the energy sector at the moment. A higher risk for higher reward play.
August 2020 Dividend Payouts
|ET||Energy Transfer LP Unit||$15.86|
|HRZN||Horizon Technology Finance Corp||$3.00|
|O||Realty Income Corp||$0.47|
|STAG||Stag Industrial Inc||$1.20|
August 2020 outperformed August 2019 by 24.7%. Neither version of August was rip-roaring, but both featured the reliable flow of dividend income. I came to chew gum and collect dividends, and I’m ALL out of gum. Yep, that’s how we trash talk here at Dividend Brothers.
August 2020 First Time Additions
Crickets here folks. No newcomers into the Dividend Builder portfolio. No increased positions either, so I won’t bother with that section. There will be an update in September regarding increased positions. I won’t give it away here, but it is a tech giant. And it sounds like Crisco cause it is going to sizzle once the heat turns up. Or something like that.
August 2020 Position and Swing Trades
I don’t know if you want to call it a trim or a position trade. Whatever you call it, I sold off a couple of shares of 3M (MMM) at $165.90 for a profit of 7.64%. The ex-dividend date had just passed, and MMM was running higher than usual. I figured I’d cash in on the run-up and buy back if it gets back down towards my entry point of $154. Since selling, the stock price has continued to climb. I didn’t get as much as I could have out of it, and that is okay. The goal is to reinvest the funds in 3M or another blue chip dividend payer when they provide a decent dip for entry.
Ford (F) is finally completely removed from the portfolio. A couple of covered calls I had sold were exercised. These 200 shares were sold at a profit of only 1.60%. I was able to generate additional profit through the selling of covered calls, but the straight profit from entry point to exit point was 1.60%. Ford continues to provide me with great chances for selling calls and puts. I’ll continue to work that angle; however, I’m doing that in a separately tracked fund.
I did a quick flip of NRZ for a true swing play. This swing yielded a profit of 16.09%. I have owned and followed NRZ for long enough that I was confident jumping in at the low $7s. Knowing a stock well and being comfortable owning it long term are key guidelines for me when I attempt a swing trade. I’m not bragging up or recommending this method. It is what works for me after taking on a lot of learning in the school of hard knocks and bag holding.
The account earned $20.53 in dividend income which is an increase of 24.7% from the $16.46 in August 2019.
Position and swing trading netted $68.94.
Grand total for the month is $89.47. My fund is not large, but it is growing. My approach of dividend investing while supplementing via position and swing trading continues the steady grind of growth. As always, thanks for reading. Please tune in next month for the September update.