Past Week’s Activity
This week’s blog will be abbreviated. I’m writing it “on the road” this weekend, traveling to attend a funeral of an Uncle who passed away at the age of 93 earlier this week. In addition to being my last Uncle to pass away, he was also my godfather. He was, very simply, a wonderful human being. He was mentally alert to the end, and he passed away quickly and without pain in his sleep. We should all be so lucky when our time comes. He was part of what Tom Brokaw described as the “Greatest Generation” – he served his country in the Army Air Corps in WWII and married my father’s sister after the war ended. He worked for the US
I had another busy week of activity for the dividend portion of the portfolio this week. I’ve also had conversations with, and emails from a couple of readers, and will attempt to respond next week. The Market in general surprised me with its strength over the last 5 trading sessions. I truly expected some weakness due to the political unrest in the Middle East , but it did not occur. There were a few good earnings reports, a few that disappointed, and the general economic news was neither incredibly positive nor negative from what I assessed. Yet the market continued its advance, closing above the 12,000 mark and holding its ground at the end of the week.
Dividends were paid on a couple of stocks that I sold at a profit last week, whose ex-dividend dates had passed recently. AT&T and Verizon dividends arrived on schedule on 2/1 at $0.43 and $0.4875 per share respectively.
With the funds that became available last week when some other shares were sold, I opened initial l positions Duke Energy, CenterPoint Energy and Bell Canada
DuPont moved up nicely this past week, and is over 2 points higher than where it was purchased. As the ex-dividend date approaches, this raises an interesting opportunity. I could simply sell the stock at its current price, and capture about $2.50 per share in profit. This more than outweighs the opportunity loss of waiting to capture the dividend itself, and may be a viable option. It would be a deviation to the “rules” I’ve established, but at the end of trading activity, maximizing profits is the goal.
Below is the updated list of stocks being held, either awaiting the ex-dividend date to pass, or awaiting the opportunity to sell where the dividend is due or already paid.
Stock Symbol | Company Name | Breakeven Share Price | Current Share Price (02/04) | Dividend Captured |
HNZ | Heinz | $50.36 | $48.19 | $0.4500 |
PCG | Pacific Gas & Elec. | $48.22 | $46.25 | $0.4550 |
SO | Southern Company | $37.97 | $37.34 | $0.4550 |
PAYX | Paychex | $33.2659 | $33.26 | $0.3100 |
DD | DuPont | $50.1659 | $52.53 | $0.4100* |
DUK | Duke Energy | $17.92 | $18.01 | $0.2450* |
BCE | $36.27 | $36.93 | $0.455* | |
CNP | CenterPoint Energy | $16.17 | $16.14 | $0.1975* |
* Ex-dividend date has not yet passed
The first 3 above continue to trade below where I purchased them. Paychex is very close to my breakeven point, and the ex-dividend date passed this past week. I am hoping to sell it at a slight profit this coming week. The last 4 companies are more recent purchases and have not passed their ex-dividend dates. The possible sale on DuPont as a deviation from the strategy has been discussed above.
Closed positions this past week
I was unable to sell any other stocks held at a profit, as they each continued to trade below where I purchased them, or their ex-dividend date has not yet passed, so I continue to hold and wait. Ihaven't seen any news releases or any other developments that would cause me to question my initial purchase decision. Patience is a virtue, I am told.
On the Horizon
Stock Symbol | Company Name | Closing Price 02/04 | Dividend Expected | Ex- Dividend Date |
LLY | Eli Lilly | $35.53 | $0.48 | 02/11/11 |
Eli Lilly moved up about $0.75 from its closing price last week. In retrospect, it would have been a good buy early in the week. Inaction on my part resulted in an opportunity loss, but I expected weakness in the market due to the unrest in the Middle East , and was surprised by the relative indifference in the market to these events. There are still a couple of days, and if LLY moves down, I will try to pick up some shares.
Because of the travel and funeral, I did not have much time to review the upcoming list of companies that are going ex-dividend over the next month or so. 3 from last week were purchased.
I will do some more research over the next week, and add more companies to the list next week if I see any that look attractive to me for this strategy.
Closing Comments
Comments and questions are always appreciated. As I mentioned, I had a couple of questions in email and a conversation with a reader. I will set up a “Q & A” section in the blog next week.
The Disclaimer: I am not a licensed investment professional, and that what is contained in this blog is the result of my own research and opinions only, and is not investment advice. It is only a strategy that I am employing personally in an attempt to capture short term dividends on selected stocks. Each person has different investment goals, objectives, and timeframes. As such, each person should do his or her own research before taking any action on any type of investment.
Again, if you enjoy reading this, I would appreciate it if you would cut and paste, and forward the URL to one or two other people who might like to read it, or post it on your facebook page so that your FB friends can view it as well.
Have a good week, and prosperous trading!
Ken
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