Sunday, March 27, 2011
Recent Activity
It has been a few weeks since I’ve published an update to what I had hoped would be a weekly blog. To be honest, I’ve been preoccupied with a number of activities, both personally and professionally related – nothing bad, I assure you, but of higher priority than publishing what I believed was a lightly followed publication. This blog is facilitated by Google, and they have a set of excellent tools that provides me with information about the number of visitors who land on my page, and where they originate by country. It appeared to me that the majority of the people who were visiting resulted from my post about the blog on Facebook.
But since my last post, I’ve received encouraging emails from a few people I have never met, and I was encouraged to continue, so I will. I will try to post updates at least once a month, and provide the horizon for dividend stocks whose ex-dividend dates are approaching over that timeframe that I am considering myself.
Looking back on the events that have occurred in the world since I last published makes one realize how quickly things in the world can change, and reminds me that it is important to consider the consequences that world events can have on investments of all types, including dividend yielding stocks.
Since my post on 2/21, there have been a number of developments around the world that every person should be aware of, and every investor should consider carefully, in my opinion. The situation in Libya Japan
Closed positions
Throughout these events, I was able to close the following positions at a profit, consistent with my rules, where profits on the stock are taken as soon as possible after the ex-dividend date.
Southern Company was sold on 2/28/11 at $38.15 for a $0.20 per share profit, coupled with the dividend of $0.455 that had accrued, and was paid into my account on 03/05/11 .
Northeast Utilities was also sold on 2/28/11 , at $33.80, for a $0.30 per share profit, coupled with the dividend of $0.275 which had been paid on 2/25/11 .
Another utility, Dominion Resources, was sold on 3/3/11 , at $45.55, for a very nice gain of $1.37 per share, and its dividend of $0.4925 per share arrived on schedule on 3/20/11 .
Finally, one more utility stock was sold at a slight profit. CenterPoint Energy was sold on 3/21/11 at $17.05, for a per share profit of $0.90, coupled with the dividend payment of $0.1975 per share that arrived on 03/09/11 .
The utility stocks treated me very well recently. As the nuclear disaster unfolds in Japan US US Japan Germany
So here is the summary of what was sold, and the profits that were booked since my last blog was published:
| Stock Symbol | Company Name | Profit per share | Dividend Captured | Days Held |
| SO | Southern Company | $0.20 | $0.4550 | 52 |
| NU | Northeast Utilities | $0.30 | $0.2750 | 12 |
| D | Dominion Resources | $1.37 | $0.4925 | 30 |
| CNP | CenterPoint Energy | $0.90 | $0.1975 | 49 |
New Purchases
Since my last post, I’ve used the funds from some of these sales to purchase positions in the following companies:
This is a stock I have successfully purchased and sold in past quarters. I had opened a position on 2/22 at $34.02, and the price declined during the market correction, so I added an equal amount to reduce my average purchase price on 3/10, at $32.98, bringing the average purchase price to $33.51. CINF went ex-dividend on 3/20, and will pay a $0.40 per share dividend on 4/17. The stock price remains below the average purchase price, at $32.47, so I will continue to hold it.
Pennant Park Investment Corp (PNNT)
This is a new purchase I made, which surfaced in the weekly screen of stocks that I examine. The company is engaged in making investments in middle market companies, through loans, preferred and common stock, warrants and options. It has a very high annual yield of 9.2%, so it is riskier than most of the companies that I choose, but the company has been successful, and I was impressed with their revenue growth and recent performance, as well as their management. We’ll see how this turns out over time. I purchased it on 3/7 at $12.45 per share, on what appeared to be a slight decline, which turned into a larger decline. The stock is now at $11.74 per share, but the dividend of $0.327 per share makes up for much of the paper loss. Similar to another “higher than average” yielding stock purchased in the past, Century Link Tel, there are higher risks in some situations.
Current Holdings
So here is the updated list of stocks that I am holding, 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 (03/25) | Dividend Captured |
| HNZ | Heinz | $49.19 | $48.64 | $0.4500 |
| PCG | Pacific Gas & Elec. | $48.22 | $43.90 | $0.4550 * |
| CINF | | $33.51 | $32.47 | $0.4000 |
| CTL | Century Link Tel | $45.19 | $40.97 | $0.7250 |
| BCE | | $36.27 | $35.71 | $0.4550 |
| PNNT | Pennant Park Investment Corp | $12.45 | $11.74 | $0.3270 |
* Ex-dividend date has not yet passed
All current holdings are below their break even points.
I am watching all of these closely, but do not see any reason for selling any of them at a loss.
PCG has declined, and I think this may be due to concerns about what could occur if their Nuclear Reactor plant in Diablo Canyon, CA (near San Luis Obispo ) suffered the same type of disaster as happened in Japan California Diablo Canyon California
Heinz actually climbed above the breakeven point recently, and I was tempted to sell it, but ultimately decided to continue to hold it until the next ex-dividend date which is approaching. Positive comments from the CEO about sales boosted the stock. Perhaps the pullback is also partially attributable to the situation in Japan , since Heinz’ products are sold throughout Asia, and this may hamper sales in Japan
Century Tel received the final regulatory approval for its acquisition of Qwest Communications. The FCC had approved the deal, but 21 State Public Utility Commissions also needed to approve it, and Oregon
On the Horizon
| Stock Symbol | Company Name | Closing Price 03/25 | Dividend Expected | Ex- Dividend Date |
| VZ | Verizon | $37.29 | $0.4875 | 04/06 |
| T | AT&T | $28.90 | $0.4300 | 04/06 |
| PGN | Progress Energy | $45.35 | $0.6200 | 04/07 |
| BGS | B & G Foods | $19.40 | $0.2100 | 03/29 |
AT&T recently announced its planned acquisition of Cingular Wireless. The price of AT&T did not rise or fall significantly on this news. My belief is that the consolidation that is occurring in the telecommunications industry will be good for the companies in this industry in general. This announcement does not, in my opinion, prevent either AT&T or Verizon from being a short term dividend harvest play for their respective upcoming dividends. I’ve purchased and sold both of them successfully in the past, and based on their payouts and cash flow, I would not be averse to holding either of them if necessary.
Progress Energy is a company that I’ve had on my watch list in the past, but have not purchased. The company provides power to several states in the Southeast US, and the stock price fell about 4 points recently, and is below its 52 week high, perhaps again as a sell-off due to the nuclear disaster in Japan. PGE has 4 nuclear plants. 2 are in North Carolina , 1 in South Carolina , and 1 in Florida Florida
A new candidate is B & G Foods (BGS). Most people are not familiar with the name of the company, but have probably purchased one or more of the products that it owns, including Vermont Maid syrup, Ortega, Brer Rabbit, Grandma’s Molassas, Polaner, Cream of Wheat, Emeril’s Underwood, and B&M Baked Beans and Brown Bread, which are my personal favorites.
The company’s stock price has moved up recently, and it has garnered attention in the press due to a recent outstanding quarter, and because it is increasing gross margins and profits. My belief is that the upward move is not over yet, and this offers an opportunity to capture a dividend and a possible gain in the share price as well.
Note: Although I am not going planning to publish a weekly update going forward, I will try to update the “On The Horizon” dividend candidates in between general updates. You may want to “Follow” this blog, as I believe that provides you with email updates whenever new content is added. Having more “followers” will also serve as encouragement for me to update things routinely.
Q&A
The only feedback I’ve received was from 2 people who I don’t know who sent me emails when I didn’t publish for a few weeks. I do appreciate knowing that there are people who like what I am doing. Please send this link on to others who might like it as well.
Closing Comments
The Official 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.
Ken
