JT’s DAILY (WEEKLY as of 12/9/2013) BLOG for Month Of November 2017

Note: All previous month's posts are available in the archives, as noted above. 

All postings for the month are available here, sorted in descending order - i.e. most recent at the top.

1st Posting for Week Beginning Monday 11/20/2017

Posted Sunday 11/19/2017 03:00 PM

Stocks gyrated somewhat last week, and even though the net result was only a minor decline, volatility was higher than we have seen for quite some time. The market mood has definitely turned darker in recent weeks, with the prospects for business tax reform being passed this year now seen as far from a sure thing.

Steady dividends from firms with a long history of reliable payouts are the closest thing to a sure thing as there is available in the stock market, but even then it isn’t 100% guaranteed, as evidenced by General Electric’s (GE) 50% dividend cut announced last week. Stocks on my lists going ex-dividend this week are listed as follows, with yield as of Friday’s close indicated.

Pitney Bowes (PBI), 11/20/2017, 7.52%.   

Valero VLO), 11/20/2017, 3.41%.   

Main Street Capital (MAIN), 11/20/2017, 5.62%. MAIN pays monthly.

Hershey Co (HSY), 11/21/2017, 2.39%.  

3M Co (MMM), 11/22/2017, 2.05%.  

NextEra Energy (NEE), 11/22/2017, 2.50%.  

Vodafone (VOD), 11/22/2017, 2.37%. VOD pays semi-annually.

Wheaton Precious Metals (WPM), 11/24/2017, 1.61%.      

CenturyLink (CTL), 11/24/2017, 14.64%. The market thinks a dividend cut is imminent, and the market may be right. If not, CTL is a heck of a bargain right now.

Johnson & Johnson (JNJ), 11/27/2017, 2.42%.  

One firm that went ex-dividend last week that I missed was United Parcel Service (UPS), which went ex-dividend on 11/10/2017, yielding 2.97%.

All three stocks listed last week as reporting earnings did so as scheduled. Cisco Systems (CSCO), JM Smucker (SJM), and Wal-Mart Stores (WMT) all managed to exceed analysts’ estimates. For specifics, see the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. In many cases a transcript of the earnings teleconference with analysts is available on Seeking Alpha.

None of my stocks are scheduled to report this coming week.

New ratings on stocks I follow continue to come out, albeit at a slower pace, now that earnings season is behind us. Note that I report these as being of interest, not as actionable advice.

Norfolk Southern (NSC) was initiated at Neutral at Goldman.

JM Smucker (SJM) was upgraded from Neutral to Positive at Susquehanna.

United Parcel Service (UPS) was initiated at Buy at Goldman.

General Electric (GE) was downgraded from OutPerform to Sector Perform at RBC Capital Markets.

Coca Cola (KO) was upgraded from Market Perform to OutPerform at Wells Fargo.

General Electric (GE) was reiterated at Buy at BofA/Merrill.

Valero (VLO) was reiterated at OverWeight at Barclays.

Transocean (RIG) was reiterated at Sector Perform at RBC Capital Markets.

Statoil (STO) was downgraded to Market Perform at BMO Capital.

Sanofi (SNY) was upgraded from UnderWeight to Equal Weight at Barclays.

Wal-Mart Stores (WMT) was reiterated at OutPerform at Oppenheimer.

Cisco Systems (CSCO) was resumed at OutPerform at Wells Fargo.

ExxonMobil (XOM) was reiterated at Sector Perform at RBC Capital Markets.

Cisco Systems (CSCO) was reiterated at OverWeight at KeyBanc, at Neutral at Nomura, and at Buy at Deutsche Bank.

Triangle Capital (TCAP) was downgraded from Buy to Hold at Jeffries.

Valero (VLO) was downgraded from Buy to Hold at Standpoint Research.

Diebold Nixdorf (DBD) was upgraded from Neutral to OverWeight at JP Morgan.

SCANA (SCG) was upgraded from Sell to Neutral at Guggenheim.

Wal-Mart Stores (WMT) was reiterated at OutPerform at Telsey Advisory Group.

Unilever (UL) was initiated at Hold at Argus.

JM Smucker (SJM) was reiterated at Hold at Stifel.

Wal-Mart Stores (WMT) was reiterated at OutPerform at RBC Capital Markets.

Emerson Electric (EMR) was downgraded from Buy to Hold at Edward Jones.

Pan American Silver (PAAS) was initiated at OutPerform at BMO Capital Markets.

Boardwalk Pipeline Partners L P (BWP) was initiated at Sell at Goldman.

The week ahead should be a quiet week, as far as the markets are concerned, with the Thanksgiving holiday reducing trading hours, and attention spans as well. Low trading volumes can result in larger-than-normal moves on individual stocks affected by company-specific news, which in turn can result in buy or sell opportunities. Barring any opportunistic moves, I don’t expect to make any trades this week. I used the recent run-up in Exelon (EXC) to sell part of my position at the best price seen since 2011, and I used the recent run-down in General Electric (GE) to sell a put when the stock was at the week’s low. Those are two examples of the types of opportunistic trades I will make during a slow time. Other than rare opportunities that may arise, I’m standing down this holiday week. My cash allocation is at a high not seen since before the financial crisis. The reason is I am awaiting better buy prices.

JT

1st Posting for Week Beginning Monday 11/13/2017

Posted Sunday 11/12/2017 09:00 AM

Stocks were flat through Wednesday last week, then declined on Thursday, a bit more on Friday, and ended the week overall with modest losses on the major averages. That had not occurred for several weeks. The reason was purported to be disappointment with the Senate version of the new tax plan that came out Thursday, according to the headlines. Also, it may be that it was just time for a breather, after a series of weekly advances and new highs.

If you have the right portfolio of stocks, dividends never take a week off. Stocks on my lists going ex-dividend in the upcoming week are as follows, with the date and yield shown. Frequency is quarterly unless otherwise indicated.

Exelon (EXC), 11/14/2017, yield 3.18%.  

MicroSoft (MSFT), 11/15/2017, yield 2.00%.

Diebold Nixdorf (DBD), 11/16/2017, yield 2.19%.  

Chevron (CVX), 11/16/2017, yield 3.68%.  

Emerson Electric (EMR), 11/16/2017, yield 3.16%.  

Duke Energy (DUK), 11/16/2017, yield 3.97%.  

Royal Dutch Shell (RDS.B), 11/16/2017, yield 5.67%.  

Kraft Heinz Co (KHC), 11/16/2017, yield 3.15%.  

Gladstone Investment (GAIN), 11/17/2017, yield 7.06%. GAIN pays monthly.  

Southern Co (SO), 11/17/2017, yield 4.46%.

Horizon Technology Finance (HRZN), 11/17/2017, yield 10.87%. HRZN also pays monthly.

Pan American Silver (PAAS), 11/17/2017, yield 0.66%. PAAS is recommended as a silver speculation, it is obviously not a significant dividend payer.

Valero (VLO), 11/17/2017, yield 3.44%.

Main Street Capital (MAIN), 11/20/2017, yield 5.55%. MAIN pays monthly.

Two of my stocks went ex-dividend last week that were not listed in my prior posting:

Buckeye Partners L P (BPL), 11/10/2017, 10.02%.

Hercules Capital (HTGC), 11/10/2017, 9.18%.

Last week I listed 22 stocks from my lists that were scheduled to report earnings, and 21 reported as scheduled. The exception was Calumet Specialty Products Partners L P (CLMT), which announced it had filed for a delay in filing the 10K due to a new financial system implementation. The firm did present some preliminary results in a conference call on 11/10/2017.

See last week’s posting for the names and reporting dates of the 21 stocks reporting as scheduled. For all stocks reporting, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. In many cases a transcript of the earnings teleconference with analysts is available on Seeking Alpha.

Only three stocks on my lists are scheduled to report in the upcoming week, Cisco Systems (CSCO) on 11/15/2017, and JM Smucker (SJM) and Wal-Mart Stores (WMT), both scheduled to report on 11/16/2017.

New ratings on stocks I follow continue to come out, as earnings are reported and prices move lower or higher. Note that I report these as being of interest, not as actionable advice.

Solar Capital LTD (SLRC) and TICC Capital (TICC) were both upgraded from Neutral to Buy at Ladenburg Thalmann.

GlaxoSmithKline (GSK) was downgraded from Buy to Hold at Investec.

Buckeye Partners L P (BPL) was reiterated at Buy at Stifel.

HCP Inc (HCP) was reiterated at Hold at Stifel.

Main Street Capital (MAIN) was upgraded from UnderPerform to Market Perform at Raymond James.  

Apollo Investment (AINV) was upgraded from Market Perform to OutPerform at Raymond James. 

ExxonMobil (XOM) was downgraded from Hold to Reduce at HSBC Securities.

Statoil (STO) was downgraded from Buy to Hold at HSBC Securities.

CenturyLink (CTL) was reiterated at OutPerform at Oppenheimer.

Tanger Factory Outlet Centers (SKT) was reiterated at Sell at Citigroup.

AT&T (T) was reiterated at Buy at Citigroup.

Frontier Communications (FTR) was downgraded to UnderPerform at BofA/Merrill.

Windstream Holdings (WIN) was reiterated at Neutral at Citigroup.

Wal-Mart Stores (WMT) was reiterated at Neutral at UBS.

Tanger Factory Outlet Centers (SKT) was upgraded from UnderPerform to Neutral at BofA/Merrill.

Frontier Communications (FTR) downgraded from Buy to Hold at Gabelli & Co.

Emerson Electric (EMR) was reiterated at Buy at Stifel.

Energy Transfer Partners L P (ETP) was reiterated at Buy at Stifel.

Pan American Silver (PAAS) was upgraded from Neutral to Buy at B. Riley FBR, Inc.

MicroSoft (MSFT) was resumed at Buy at UBS.

ConocoPhillips (COP) was reiterated at OutPerform at RBC Capital Markets.

Buckeye Partners L P (BPL) was reiterated at Sector Perform at RBC Capital Markets.

AT&T (T) was initiated at Buy at Standpoint Research.

NuStar Energy L P (NS) was reiterated at Hold at Stifel, Buy at UBS, and Equal Weight at Barclays.

General Mills (GIS) was upgraded from Sell to Hold at Societe Generale.

Welltower (HCN) was reiterated at Buy at Stifel.

As we move past earnings and into the holiday time of year, the market usually holds up fairly well through the end of the year. I expect it to adhere to this pattern again this year, barring some major geopolitical schism of some type. It is 2018 and beyond that concerns me, as it is becoming increasingly clear that neither of the two dominant political parties has any interest in reining in the growth of government and the endless deficits. The end-game, whenever it comes, will be an economic earthquake beyond anything seen before, including the 1930’s.

JT  

1st Posting for Week Beginning Monday 11/06/2017

Posted Sunday 11/05/2017 10:00 AM

Stock movements were muted last week, as October finished out with a small decline on Monday, and then an even smaller advance on Halloween. Then, the first three days of November saw modest gains on most of the major averages. With decent economic reports continuing to come out and some business tax reform in the works, the market continues to hold up rather well.

Most of my dividend payers are likewise holding up well. Here are the stocks on my lists going ex-dividend in the week ahead, with yield as of Friday’s close indicated:

American Midstream Partners L P (AMID), 11/06/2017, yield 14.37%.

Crestwood Equity Partners L P (CEQP), 11/06/2017, yield 9.60%.

Energy Transfer Partners L P (ETP), 11/06/2017, yield 12.94%.

Energy Transfer Equity L P (ETE), 11/06/2017, yield 6.74%.

Welltower (HCN), 11/06/2017, yield 5.14%.

Intel (INTC), 11/06/2017, yield 2.31%.

Martin Midstream Partners L P (MMLP), 11/06/2017, yield 12.58%.

Archrock Partners L P (APLP), 11/07/2017, yield 8.81%.

NuStar (NS), 11/08/2017, yield 13.65%.

Boardwalk Pipeline Partners L P (BWP), 11/08/2017, yield 2.82%.

Entergy (ETR), 11/08/2017, yield 4.11%.

Amerigas Partners L P (APU), 11/09/2017, yield 8.44%.

Pfizer (PFE), 11/09/2017, yield 3.61%.

JM Smucker (SJM). 11/09/2017, yield 3.03%.

American Electric Power (AEP), 11/09/2017, yield 3.36%.

GlaxoSmithKline (GSK), 11/09/2017, yield 5.58%.

Spectra Energy Partners L P (SEP), 11/10/2017, yield 6.71%.

ExxonMobil (XOM), 11/10/2017, yield 3.69%.

All dividends are quarterly unless otherwise indicated.

Last week I listed 44 stocks from my lists that were scheduled to report earnings during the upcoming week, and 43 reported as scheduled. CenturyLink (CTL) was listed to report 10/30/2017, and is now set to report 11/08/2017.

See last week’s posting for the names and dates of the stocks listed as reporting in the upcoming week. For all stocks reporting, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. In many cases a transcript of the earnings teleconference with analysts is available on Seeking Alpha.

Earnings season is still ongoing. For the upcoming week, another 22 firms on my lists are scheduled to report, listed following by reporting date:

11/06/2017

Sysco (SYY).

11/07/2017

Plains All American Pipeline (PAA), Emerson Electric (EMR), NuStar Energy L P (NS), Welltower (HCN), Energy Transfer Partners L P (ETP), Energy Transfer Equity L P (ETE), Tanger Factory Outlet Centers (SKT), Universal (UVV), Monroe Capital (MRCC).

11/08/2017

Amerigas Partners L P (APU), CenturyLink (CTL), Pan American Silver (PAAS), BlackRock Capital Investments (BKCC), National Health Investors (NHI), Prospect Capital (PSEC), American Midstream Partners L P (AMID).

11/09/2017

Enerplus (ERF), Senior Housing Properties Trust (SNH), Windstream Holdings (WIN), Wheaton Precious Metals (WPM).

11/10/2017

Calumet Specialty Products Partners L P (CLMT).

New ratings on stocks I follow continue to come out, as earnings are reported and prices move lower or higher. I report these as being of interest, not as actionable advice.

ConAgra Brands (CAG) was upgraded from Hold to Buy at Stifel.

Intel (INTC) was upgraded from Market Perform to OutPerform at BMO Capital.

Merck (MRK) was downgraded to Equal Weight at Barclays and Morgan Stanley, and to Hold at Suntrust Robinson Humphrey.

Ventas (VTR) was upgraded from Equal Weight to OverWeight at Capital One.

Merck (MRK) was upgraded from UnderPerform to Hold at Jeffries.

MicroSoft (MFST) was upgraded from Hold to Buy at Argus.

Enterprise Products Partners (EPD) was reiterated at OutPerform at RBC Capital Markets.

Barrick Gold (ABX) was downgraded from OutPerform to Sector Perform at RBC Capital Markets.

Eaton (RTN) was reiterated at Hold at Jeffries.

Frontier Communications (FTR) was reiterated at Neutral at UBS.

Kellogg (K) was reiterated at Neutral at UBS, and at Buy at Buckingham.

ONEOK (OKE) was reiterated at Buy at UBS.

Frontier Communications (FTR) was downgraded From Neutral to UnderWeight at JP Morgan.

Apollo Investment (AINV) was reiterated at Neutral at JP Morgan.

BlackRock Capital Investments (BKCC) was reiterated at Neutral at JP Morgan.

Diebold Nixdorf (DBD) was reiterated at Neutral at JP Morgan.

General Electric (GE) was reiterated at UnderWeight at JP Morgan.

Public Service Enterprise Group (PEG) was upgraded from Market Perform to OutPerform at Wells Fargo.

Diebold Nixdorf (DBD) was downgraded from Buy to Hold at Lake Street.

Kellogg (K) was reiterated at Sector Perform at RBC Capital Markets.

Apollo Investment (AINV) was initiated at Neutral at Compass Point.

Boardwalk Pipeline Partners L P (BWP) was reiterated at Buy at Citigroup.

Colgate Palmolive (CL) was reiterated at Neutral at Citigroup.

Eaton (ETN) was reiterated at Buy at Citigroup.

Horizon Technology Finance (HRZN) was upgraded from UnderPerform to Market Perform at Raymond James.

Kimberly Clark (KMB) was upgraded from Hold to Buy at Societe Generale.

Valero was upgraded from Inline to OutPerform at Evercore ISI.

Triangle Capital (TCAP) was downgraded from Buy to UnderPerform at BofA/Merrill.  

Triangle Capital (TCAP) was downgraded from OverWeight to Equal Weight at Stephens & Co.

Tanger Factory Outlet Centers (SKT) was upgraded from UnderPerform to Neutral at Boenning & Scattergood.

Hercules Capital was upgraded from UnderPerform to Market Perform at Raymond James.

It was a non-eventful week for yours truly, as far as trades are concerned. Enticed by the double digit yield, I put in a bid for Energy Transfer Partners L P (ETP) on Friday, the last day to buy before the ex-dividend date Monday, 11/06/2017. Trying to get in just barely above $17, the stock took off right after I entered my limit order, and advanced steadily all day, closing at $17.51. I probably should have forced the trade with a market order before the bell, but I was so disgusted that I passed. ETP definitely has some risk associated with it, but a 12% yield is worth the risk, as long as you put a size limit on the holding.

Barring unforeseen geopolitical or economic developments, the market will likely continue as it has at least until after year-end. But like many others, I foresee at least the possibility of major storms ahead next year, accompanied by a long-awaited market decline.

JT

1st Posting for Week Beginning Monday 10/30/2017

Posted Sunday 10/29/2017 08:30 AM

Stocks did not go straight up last week, with a couple of down days, but still registered gains on the week on all the major averages, especially the NASDAQ on Friday, as a couple of major tech giants posted positive earnings surprises. There seems to be no letup in sight for the advancing stock market, which continues its run even as the political discourse gets louder and coarser each day. Investors seem to be subscribing to a formula that says, if the present state of our politics depresses you, go buy some stock, it will cheer you up!

About the only thing that cheers me up, as the original John D Rockefeller purportedly once said, is to see dividends from my stocks coming into my accounts. Looking ahead to next week, here are the stocks on my lists going ex-dividend from tomorrow (10/30/2017) through the following Monday (11/06/2017), with ex-dividend date and yield as of Friday’s closing price indicated:    

Enterprise Products Partners L P (EPD), 10/30/2017, yield 6.88%.

AGNC Investment (AGNC), 10/30/2017, yield 10.52%. AGNC pays monthly.

Plains All American Pipeline (PAA), 10/30/2017, yield 6.20%.

Alliant Energy (LNT), 10/30/2017, yield 2.90%.

Tanger Factory Outlet Centers (SKT), 10/30/2017, yield 5.68%.

STAG Industrial (STAG), 10/30/2017, yield 5.14%. STAG pays monthly.

Kinder Morgan Inc (KMI), 10/30/2017, yield 2.78%.

Prospect Capital (PSEC), 10/30/2017, yield 11.88%. PSEC is a monthly payer.

ConAgra (CAG), 10/30/2017, yield 2.55%.

Realty Income (O), 10/31/2017, yield 4.76%. O pays monthly.

Paychex (PAYX), 10/31/2017, yield 3.10%.

Magellan Midstream Partners L P (MMP), 11/01/2017, yield 5.37%.

Statoil (STO), 11/01/2017, yield 3.82%.

Williams Partners (WPZ), 11/02/2017, yield 6.54%.

Eaton (ETN), 11/02/2017, yield 3.02%.

Norfolk Southern (NSC), 11/02/2017, yield 1.83%.

Unilever (UL), 11/02/2017, yield 2.79%.

ONEOK (OKE), 11/03/2017, yield 5.58%.

HCP Inc (HCP), 11/03/2017, yield 5.87%.

Crestwood Equity Partners L P (CEQP), 11/06/2017, yield 10.17%.

American Midstream Partners L P (AMID), 11/06/2017, yield 14.65%.

Martin Midstream Partners L P (MMLP), 11/06/2017, yield 12.42%.

Intel (INTC), 11/06/2017, yield 2.64%.

Welltower (HCN), 11/06/2017, yield 5.29%.

Energy Transfer Equity L P (ETE), 11/06/2017, yield 7.06%.

Energy Transfer Partners L P (ETP), 11/06/2017, yield 13.61%.

One stock that went ex-dividend last week that I missed was Blackstone Group L P (BX), ex-dividend date 10/27/2017, yield 6.55%.

All dividends are quarterly unless otherwise indicated.

Last week I listed 39 stocks from my lists that were scheduled to report earnings during the upcoming week, and 38 reported as scheduled. Enterprise Products Partners L P (EPD) was listed to report 10/26/2017, and is now set to report this week on 11/02/2017. Six other stocks on my lists reported last week as well, but were not in my 39 stock tally. These were:

GlaxoSmithKline (GSL), reported on 10/25/2017.

Statoil (STO), reported on 10/26/2017. 

American Electric Power (AEP), reported on 10/26/2017. 

Total S A (TOT), reported on 10/27/2017.  

Washington Real Estate (WRE), reported on 10/27/2017.

Eni S p A (E), reported on 10/27/2017.

See last week’s posting for the names and dates of the stocks initially listed as reporting in the upcoming week. For all stocks reporting, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. In many cases a transcript of the earnings teleconference with analysts is available on Seeking Alpha.

Earnings season is still going strong. For the upcoming week, another 44 firms on my lists are scheduled to report, listed following by reporting date:

10/30/2017

CenturyLink (CTL), Safety Insurance Group (SAFT), Boardwalk Pipeline Partners L P (BWP).

10/31/2017

Diebold (DBD), Crestwood Equity Partners L P (CEQP), Eaton (ETN), Kellogg (K), Pfizer (PFE), Public Service Enterprise Group (PEG), Frontier Communications (FTR), Horizon Technology Finance (HRZN), ONEOK (OKE).

11/01/2017

Pitney Bowes (PBI), Southern Co (SO), Annaly Capital Management (NLY), Spectra Energy Partners L P (SEP), Transocean (RIG), Triangle Capital (TCAP), Legacy Reserves L P (LGCY), Gladstone Investment (GAIN), Kraft Heinz (KHC), Williams Partners (WPZ).

11/02/2017

Ares Capital (ARCC), Consolidated Communications (CNSL), Enterprise Products Partners L P (EPD), Exelon (EXC), HCP Inc (HCP), Magellan Midstream Partners (MMP), Medical Properties Trust (MPW), MFA Financial (MFA), Royal Dutch Shell (RDS.B), Sanofi (SNY), Alliant Energy (LNT), Main Street Capital (MAIN), Noble Corp PLC (NE), STAG Industrial (STAG), TICC Capital (TICC), Archrock Partners L P (APLP), Solar Capital LTD (SLRC), Hercules Capital (HTGC).

11/03/2017

Apollo Investment (AINV), Buckeye Partners L P (BPL), Duke Energy (DUK).

New ratings on stocks I follow continue to come out, as earnings are reported and prices move lower or higher. I report these as being of interest, not as actionable advice. See my posting from the week before last for my expanded admonition regarding stock ratings. Here is the latest batch:

National Health Investors (NHI) was initiated at Equal Weight at Capital One.

Nucor (NUE) was reiterated at Market Perform at Cowen.

United Parcel Service (UPS) was reiterated at Market Perform at Cowen.

DrPepper Snapple (DPS) was upgraded from Market Perform to OutPerform at Wells Fargo.

General Electric (GE) was downgraded from Equal Weight to UnderWeight at Morgan Stanley.

General Electric (GE) was downgraded from Buy to Neutral at UBS.

General Electric (GE) was upgraded from Neutral to Buy at BofA/Merrill. I guess BofA thinks this is a good time to buy the beaten-down “general”. I probably would consider buying if I didn’t already own it.

General Electric (GE) was downgraded to Perform at Oppenheimer.

Valero (VLO) was downgraded from OutPerform to Neutral at Macquarie.

Alliant Energy (LNT) was initiated at Neutral at BofA/Merrill.

SCANA (SCG) was initiated at Neutral at BofA/Merrill.

American Electric Power (AEP) was initiated at Buy at BofA/Merrill.

Duke Energy (DUK) was initiated at Neutral at BofA/Merrill.

Entergy (ETR) was initiated at Neutral at BofA/Merrill.

Exelon (EXC) was initiated at Buy at BofA/Merrill.

NextEra Energy (NEE) was initiated at Buy at BofA/Merrill.

Public Service Enterprise Group (PEG) was initiated at Buy at BofA/Merrill.

Southern Co (SO) was initiated at UnderPerform at BofA/Merrill.

Kinder Morgan Inc (KMI) was reiterated at Buy at Stifel.

MicroSoft (MSFT) was reiterated at Buy at Stifel.

Kimberly Clark (KMB) was reiterated at Neutral at Citigroup.

Roche Holdings LTD (RHHBY) was downgraded from Buy to Hold at Berenberg.

3M Co (MMM) was reiterated at Hold at Stifel, and at Sector Perform at RBC Capital Markets.

Hercules Capital (HTGC) was initiated at Neutral at Wedbush.

DrPepper Snapple (DPS) was reiterated at Buy at Stifel.

General Dynamics (GD) was reiterated at Hold at Stifel.

GlaxoSmithKline (GSK) was downgraded from Buy to Neutral at BofA/Merrill.

Norfolk Southern (NSC) was reiterated at Buy at UBS.

Barrick Gold (ABX) was downgraded from OutPerform to Neutral at Credit Suisse.

DrPepper Snapple (DPS) was reiterated at Equal Weight at Morgan Stanley.

Coca Cola (KO) was reiterated at Equal Weight at Morgan Stanley.

Norfolk Southern (NSC) was reiterated at UnderWeight at Morgan Stanley.

MicroSoft (MSFT) was reiterated at Buy at Stifel, and at OutPerform at BMO Capital Markets, and also at OutPerform at RBC Capital Markets.

MicroSoft (MSFT) was reiterated at Sell at Citigroup, and at Buy at Canaccord Genuity, and at OverWeight at Barclays.

ConocoPhillips (COP) was reiterated at OutPerform at Wells Fargo, and at OutPerform at Barclays.

Intel (INTC) was upgraded from Neutral to Buy at BofA/Merrill.

Mid America Apartment Communities (MAA) was reiterated at Buy at Stifel.

United Parcel Service (UPS) was reiterated at Hold at Stifel.

Ensco PLC (ESV) was reiterated at Neutral at FBR & Co.

Hershey Co (HSY) was reiterated at Buy at Citigroup.

Kimberly Clark (KMB) was reiterated at Neutral at Citigroup.

Martin Midstream Partners L P (MMLP) was reiterated at Hold at Stifel.

Raytheon (RTN) was reiterated at Hold at Stifel.

As noted in my previous postings’ wrap-up comments, there are some occasional buy opportunities even as we are in what has become a severely over-bought market. One I have noted before, Tanger Factory Outlet Centers (SKT), took another dip last week, allowing me to add to my position at an attractive price just prior to the ex-dividend date, 10/30/2017. Another opportunity was Realty Income (O), which dropped briefly on Friday to just barely above $53. I started a new small position in O several weeks ago at this level, and after watching it shoot back up almost immediately, I was cursing my overly timid approach for not starting out with a larger position. I made up for it this time, adding enough to take me to my standard maximum number of shares allowed for any one stock. O ended the day almost ninety cents higher, so I’m feeling pretty good about it at this point, although the near-term action is not really relevant for what I intend to be a long-term holding. Both names are unfairly being punished because they are associated by investors with the decline of “brick and mortar retail and malls”, and I am betting that things are not nearly as bleak for these two REITs as the market collectively thinks. O has a long history of monthly dividends that have steadily increased, and I believe the firm will continue to deliver for shareholders. SKT is really down, and while it is probably not on a par with O, the factory outlet niche is not nearly as downtrodden as malls in general, and SKT looks to be able to continue its generous payout for the foreseeable future.

JT

1st Posting for Week Beginning Monday 10/23/2017

Posted Sunday 10/22/2017 10:30 AM

Stocks continued to grind slowly upward last week, with the venerable Dow Industrials stock average gaining ground every day, including triple-digit gains on Wednesday and Friday. Note that the DOW average, which is most frequently referred to by the non-financial press, is considered by market pros as not really representative of the overall market, consisting of only 30 ultra large “blue chips”, and excluding financials, but it continues as the most well-known stock index, as far as the general public is concerned. The NASDAQ index, by contrast, gained only slightly two days, was flat two days, and declined slightly one day. Still, it is a fair assessment that the market overall continues to advance, and the often predicted but never arriving stock swoon is nowhere in sight at the moment.   

Looking ahead to next week, here are the stocks on my lists going ex-dividend from tomorrow through the following Monday, with ex-dividend date and yield as of Friday’s closing price indicated:

Enerplus (ERF), 10/27/2017, yield 1.11%. ERF pays 1 cent Canadian per share monthly. The US-Canadian exchange rate reduces the US $ payoff to 80% of a penny, or $0.008 per share. None too exciting, but I can remember the days when this one-time “grand daddy” of the Canadian trusts had a truly exciting yield, and a share price in the $50’s.

Enterprise Products Partners L P (EPD), 10/30/2017, yield 6.67%.

AGNC Investment (AGNC), 10/30/2017, yield 9.91%. AGNC is a monthly payer.

Plains All American Pipeline L P (PAA), 10/30/2017, yield 5.81%.

Tanger Factory Outlet Centers (SKT), 10/30/2017, yield 5.38%. SKT has been decimated by the impending “death of brick & mortar retail and associated REITs”. If you believe that the selloff has been overdone, at least in the case of SKT, now is a great time to buy. I am in the camp of believing SKT is a rare value in the current market, with a great yield to boot. I own it and also have added it to my Tier2 recommended list of stocks, as I don’t even consider so risky that it has to be on Tier3.

STAG Industrial (STAG), 10/30/2017, yield 5.04%. STAG is a monthly payer. I bought STAG in the teens, and it quickly ran up above $27, so I sold, thinking I would book a quick gain and buy it back right away on a pullback. I didn’t expect it to pull back much, maybe to $22 or $23 at best, but so far, it has stayed at the $27 level. Curses, foiled again!

Kinder Morgan Inc (KMI), 10/30/2017, yield 2.68%. As a Kinder Morgan pensioner, by way of Coastal Corp acquired by El Paso, which was then acquired by Kinder Morgan, I know a little about KMI’s terrific pipeline assets, so I believe in the long-term story here. But like many holders, the yield and stock price at the moment are none too exciting for me. Founder Rich Kinder, still at the helm, has been a winner for many, many years, and I am still a believer for the long-term.

Alliant Energy (LNT), 10/30/2017, yield 2.87%. LNT is a rock-solid utility, but a utility yielding less than 3% is definitely not enticing as an income play.

ConAgra (CAG), 10/30/2017, yield 2.52%. CAG is in the stable but challenged packaged foods category. The yield will have to get above 3% as a minimum before it is worth a look, in my opinion.

All six stocks listed in last week’s post as scheduled to report last week did so as scheduled.

See last week’s posting for the names and dates. Rather than repeat here information that is abundantly available elsewhere, I point the reader desiring specifics to the firms’ press releases, available on their web sites, compilations of articles on brokerage web sites, the financial press web sites, or my preferred resource, Seeking Alpha. In many cases a transcript of the earnings teleconference with analysts is available on Seeking Alpha.

Earnings season is now in full swing, with forty firms on my lists scheduled to report in the coming week, listed following by date:

10/23/2017

Kimberly Clark (KMB), Potlatch (PCH).

10/24/2017

3M Co (MMM), Entergy (ETR), McDonalds (MCD), Novartis (NVS), AT&T (T), Iron Mountain (IRM).

10/25/2017

Coca Cola (KO), DrPepper Snapple (DPS), General Dynamics (GD), Freeport McMoRan (FCX), Norfolk Southern (NSC), AGNC Investment (AGNC), Barrick Gold (ABX), Digital Realty (DLR), Ensco (ESV), Kimco Realty (KIM), Martin Midstream Partners L P (MMLP), Mid America Apartment Communities (MAA), Realty Income (O).

10/26/2017

ConocoPhillips (COP), Enterprise Products Partners L P (EPD), Hershey Co (HSY), Newmont Mining (NEM), NextEra Energy (NEE), Raytheon (RTN), SCANA Corp (SCG), United Parcel Service (UPS), Valero (VLO), Waste Management (WM), Intel (INTC), MicroSoft (MSFT).

10/27/2017

Chevron (CVX), Colgate Palmolive (CL), ExxonMobil (XOM), Merck (MRK), Ventas (VTR).

New ratings on stocks I follow continue to come out, as earnings are reported and prices move lower or higher. I report these as being of interest, not as actionable advice. See last week’s post for my expanded admonition regarding stock ratings. Here is the latest batch:

NextEra Energy (NEE) was upgraded to Conviction Buy at Goldman.

Entergy (ETR) was upgraded from Hold to Buy at Jeffries.

Valero (VLO) was downgraded from Buy to Hold at Jeffries.

Safety Insurance Group (SAFT) was downgraded from Neutral to Sell at Compass Point.

Crown Castle (CCI) was downgraded from OutPerform to Perform at Oppenheimer.

Norfolk Southern (NSC) was downgraded from OutPerform to Market Perform at Wells Fargo.

Johnson & Johnson (JNJ) was reiterated at Buy at Jeffries.

Triangle Capital (TCAP) was downgraded from Market Perform to UnderPerform at Raymond James.

Energy Transfer Equity L P (ETE) was upgraded from Neutral to Buy at Goldman.

Darden Restaurants (DRI) was downgraded from Buy to Hold at Argus.

Kinder Morgan Inc (KMI) was downgraded from Buy to Neutral at Goldman.

Eaton (ETN) was initiated at Neutral at Buckingham Research.

Buckeye Partners L P (BPL) was reiterated at Buy at UBS.

NuStar Energy L P (NS) was also reiterated at Buy at UBS.

Chevron (CVX) was upgraded from Neutral to OutPerform at Macquarie.

Energy Transfer Partners L P (ETP) was downgraded from Buy to Neutral at Goldman.

Eaton (ETN) was downgraded from Buy to UnderPerform at BofA/Merrill.

Chevron (CVX) was downgraded to Market Perform at BMO Capital.

Merck (MRK) was upgraded from Neutral to Buy at Citigroup.

Chevron (CVX) was downgraded from Buy to Hold at Societe Generale.

Enerplus (ERF) was initiated at Sector OutPerform at CIBC.

Johnson & Johnson (JNJ) was reiterated at OutPerform at both Leerink Partners and RBC Capital Markets, and at Buy at Argus.

Roche Holdings LTD (RHHBY) was downgraded from Buy to Neutral at Citigroup.

Iron Mountain (IRM) was initiated at OutPerform at Evercore ISI.

Johnson & Johnson (JNJ) was reiterated at Hold at Stifel.

Ensco (ESV), Noble Corp PLC (NE), and Transocean (RIG) were all initiated at Buy at HSBC. Mid America Apartment Communities (MAA) was downgraded from Market OutPerform to Market Perform at JMP Securities.

Cameco Corp (CCJ) was reiterated at OutPerform at RBC Capital Markets. CCJ is not actually on my lists yet, but is a strong candidate for Tier3, as a bet on improving uranium prices plus a decent if not spectacular dividend while you wait.   

General Mills (GIS) was initiated at Hold at Jeffries.

Intel (INTC) was reiterated at Buy at Stifel.

Iron Mountain (IRM) was reiterated at Buy at Stifel.

Kimberly Clark (KMB) was downgraded from Neutral to UnderWeight at JP Morgan.

MFA Financial (MFA) was downgraded from Market OutPerform to Market Perform at JMP Securities.

As the bull market continues, one has to see it as nearing ever closer to the end, with a meaningful of not catastrophic decline to follow. With certain fairly rare exceptions, most stocks are priced as if the good times will continue on indefinitely. My disciplined approach is based upon the Ben Graham approach, which is to buy only when you can do so with a margin of safety, which is to say, at a discount, caused by a temporary fall from grace that will not matter all that much in the long term. And of course, a dividend that is fully supported by earnings, so you can be paid to wait for a rebound in the stock price. It sounds so easy and logical, but it is hard to execute. A price decline is where it starts, and then the work begins – is it temporary, or is the firm slated for a permanent decline?  Will the dividend be maintained in the meantime?  An example of a situation that did not work out was Windstream (WIN), now on my Tier4 (no longer recommended) list, which paid dividends steadily for years, but finally succumbed to the realities of its sector (rural telecoms) and eliminated the dividend earlier this year, and experienced a share price collapse to the current $2 range. The “good old days” for buying stocks were 2009-2010, after the financial crisis, when top quality firms were available at unheard of discounts, unlike today, where all top quality firms are fully priced. The advice remains the same; hold abundant cash reserves, approach any apparent opportunities with great caution, and invest incrementally if at all, with a definite cap on the maximum allocation to any one position, and be ready for anything, because anything is possible.

JT

1st Posting for Week Beginning Monday 10/16/2017

Posted Sunday 10/15/2017 12:00 PM

The opening comments from my last posting two weeks ago is applicable to the two week period just ended, re “It has been two weeks since my last post, but based on where all of the major stock averages are sitting, not much has changed. All are up modestly over the period, reflecting that stocks have gradually gained some ground, but not much. Another observation I have is that the venerable Dow Industrials average did not have a triple-digit move in either direction on any day of the two week period just ended. Considering that the average is now at [updated, 22872], and that a triple-digit move isn’t much of a move anyway these days, the take-away is that volatility has been minimal lately.”

One correction needed for the prior comments to apply completely to the most recent two week period is that there was one day during the prior two weeks that a triple-digit move in the Dow Industrials index occurred, 153 points to the upside on October 2nd.

Now, looking ahead just one week, which is my usual practice, here are the stocks on my lists going ex-dividend from tomorrow through the following Monday:

Horizon Technology Finance (HRZN), 10/18/2017, 10.54%. HRZN is a monthly payer.  

Main Street Capital (MAIN), 10/19/2017, 5.74%. MAIN is also a monthly payer.

Procter & Gamble (PG), 10/19/2017, 2.99%.

Gladstone Investment (GAIN), 10/19/2017, 7.98%. GAIN pays monthly.

Colgate Palmolive (CL), 10/20/2017, 2.13%.

Senior Housing Properties Trust (SNH), 10/20/2017, 7.97%.

Because of looking ahead two weeks instead of one, some late-announcing firms going ex-dividend in the prior two week period were missed in my previous posting. For completeness, even though it is of course too late to buy and get the dividend, here they are:

Kayne Anderson Energy Development (KED), 10/5/2017, 9.72%. KED is actually a Closed End Fund (CEF).

Raytheon (RTN), 10/11/2017, 1.69%.

ConocoPhillips (COP), 10/13/2017, 2.14%.

RPM International (RPM), 10/13/2017, 2.48%.

Earnings season is upon us once again. Although starting out slow, there will be the usual avalanche of earnings reports coming out in the next few weeks. Only three stocks I follow reported in the two week period just ended; Paychex (PAYX) on 10/3/2017, and Pepsico (PEP) and RPM International (RPM), both on 10/4/2017. All three reported satisfactory results, especially PEP, which continues to outperform.

Early reports from stocks I follow coming out next week are as follows:

Johnson & Johnson, 10/17/2017.

Crown Castle International (CCI), 10/18/2017.

Kinder Morgan Inc (KMI), 10/18/2017.

Nucor (NUE), 10/19/2017.

Phillip Morris (PM), 10/19/2017.

Verizon (VZ), 10/19/2017.

Although stocks haven’t moved much lately, with volatility at record lows, the same doesn’t hold true for the stock ratings firms, as a large number of new ratings have come out in the past two weeks on stocks I track. My usual admonition applies, which is:

While I’m always interested to learn of analysts’ opinions of stocks I follow, they are to be taken with a grain (or a whole shaker) of salt. That is, do not treat the ratings as actionable advice. For one thing, the ratings changes usually come far too late to be useful. If you haven’t bought or sold by the time the ratings to do so are out, you are way too late. Also, note that the ratings focus almost exclusively on the near-term expectation of the stock price movement, not the long-term value as an investment, with dividends considered. Another confusion factor is the fact that each firm has its own ratings terms and meanings, and sometimes different firms attach different nuances or meanings to the same term. I am also amused by the ratings that are effectively no rating, such as Neutral, Hold, Equal Weight, Sector Perform, Market Perform, or just plain old Perform. Perform? Yes the stock will Perform in some fashion, but such a rating is ridiculous – it means nothing at all. The best I can do with it is to consider it equivalent to Neutral. Still, most ratings terms are more or less self-explanatory. Hold, Neutral, Market Perform, Sector Perform are basically no-calls – it is as if the analyst cannot come to a conclusion on what the prognosis really is for the stock. Still, I always find it to be of interest when a firm indicates a view of a stock I am following, whatever the view. For upgrades/downgrades, I give the prior rating if available from my source. I formerly skipped reiterations, since these are not rating changes, but now I include them, as they represent a new evaluation result, even if the review did not result in an upgrade or downgrade. Thus, I now present all available new ratings.

Here are the latest ratings for my stocks that came out in the previous two weeks:

Nucor (NUE) was downgraded from Buy to Neutral at Longbow research.

Pepsico (PEP) was downgraded from Buy to Hold at Jeffries. This must be a valuation downgrade, as PEP is performing magnificently.

3M Co (MMM) was reiterated at Underweight at Morgan Stanley.

General Electric (GE) was reiterated at Underweight at Morgan Stanley.

Calumet Specialty Products Partners L P (CLMT) was reiterated at OutPerform at Wells Fargo. It may outperform, but it remains an MLP with zero distributions, which doesn’t appeal to me or anyone else.

Darden Restaurants (DRI) was reiterated at Buy at Citigroup. DRI continues to defy the odds in the hopelessly over-crowded “formula restaurant” category, but the question is, for how much longer?

Emerson Electric (EMR) was reiterated at Overweight at Morgan Stanley.

Eaton (ETN) was reiterated at Overweight at Morgan Stanley.

Welltower (HCN) was reiterated at Neutral at UBS.

HCP Inc (HCP) was downgraded to Sell at UBS.

Norfolk Southern (NSC) was reiterated at Underweight at Morgan Stanley.

Senior Living Properties Trust (SNH) was reiterated at Neutral at UBS.

Ventas (VTR) was reiterated at Neutral at UBS.

Hercules Capital (HTGC) was resumed at Buy at FBR & Co.

Darden Restaurants (DRI) was reiterated at Buy at Stifel Nicolaus.

McDonalds (MCD) was initiated at Hold at Stifel Nicolaus.

Southern Co (SO) was reiterated at Sell at Citigroup. This is a bit of a surprise. I sold a covered call against my SO shares this week, which is as far as I will go towards parting with SO, a long-time dividend stalwart.

Waste Management (WM) was downgraded from Buy to Hold at Stifel Nicolaus.

CenturyLink (CTL) was reiterated at UnderWeight at Barclays. CTL has been on the dividend cut watch list for years. With a yield currently at 10.61%, I’m holding on to my small position I’ve had since re-acquiring CTL in 2015, but in recognition of the risk, I’m not planning to add to my holding, even as the stock tests the $20 level (to the downside).

Digital Realty (DLR) was reiterated at OutPerform at RBC Capital Markets. At $120, DLR is sky-high, with the yield now just 3%. Definitely not a “Ben Graham” buy candidate.

Paychex (PAYX) was reiterated at UnderPerform at RBC Capital Markets.

MicroSoft (MSFT) was upgraded from Hold to Buy at Canaccord Genuity. MSFT is another stock where “the train has already left the station”, currently at a ten-year high of over $77.50, and a yield of barely 2%.

Pepsico (PEP) was reiterated at Sector Perform at RBC Capital Markets. I agree, there’s not much risk in the “junk food/soda/snacks” sector these days, unless and until there is a transformation of America’s notoriously bad eating habits.

Valero (VLO) was downgraded from OverWeight to Neutral at JP Morgan. This must be a valuation issue, as VLO has exploded to the upside since the end of September. Great if you own it, avoid it if you don’t, it has become too rich, like so many names these days.

Johnson & Johnson (JNJ) was upgraded from Market Perform to OutPerform at Wells Fargo.

Energy Transfer Partners L P (ETP) was reiterated at Buy at Citigroup.

3M Co (MMM) was reiterated at Buy at Citigroup.

ONEOK (OKE) was initiated at Neutral at Mizuho.

Frontier Communications (FTR) was reiterated at Hold at Deutsche Bank. After a 1 for 10 split, FTR has regained (for the moment) the share price it had back when it was Citizens Communications (CZN). That’s the good news. The bad news is the number of shares now held, if you bought it back then, plus the outlook for this “poster child” rural telecom, which remains dismal, going forward.

NuStar Energy L P (NS) was reiterated at Neutral at Citigroup. I’ve owned 100 shares of NS since 2011, and even though I’m currently “underwater” based on my cost vs the current share price, I’m somewhat placated by having received over $2500 in distributions since acquiring NS. Plus, management has stated that the current 11% yield is covered.

Wal-Mart Stores (WMT) was reiterated at UnderPerform at RBC Capital Markets, and at OutPerform at Telsey Advisory Group.

Colgate Palmolove (CL) was upgraded from Hold to Buy at SunTrust Robinson Humphrey.

Wal-Mart was reiterated at Hold at Stifel Nicolaus.

Exelon (EXC) was downgraded from Neutral to Sell at Goldman Sachs.

General Electric (GE) was reiterated at UnderWeight at JP Morgan. GE will be reporting on 10/20/2017 for the first time since Jeff Immelt stepped down as CEO. With the stock price sliding from $32 to $24 since the first of the year, GE holders definitely could use some good news, but they may not get any. Count me as one of those (currently not happy) holders.

Johnson & Johnson (JNJ) was upgraded from Hold to Buy at Jeffries.

National Health Investors (NHI) was initiated at Hold at SunTrust Robinson Humphrey.

American Electric Power (AEP) was reiterated at Neutral at JP Morgan.

Entergy (ETR) was reiterated at Neutral at JP Morgan.

United Parcel Service (UPS) was reiterated at Neutral at JP Morgan.

Merck (MRK) was reiterated at OutPerform at BMO Capital.

Transocean (RIG) was upgraded from Neutral to Buy at Citigroup.

Duke Energy (DUK) was reiterated at Neutral at JP Morgan.

Exelon (EXC) was reiterated at OverWeight at JP Morgan.

NextEra Energy (NEE) was reiterated at Neutral at JP Morgan.

Norfolk Southern (NSC) was reiterated at Neutral at JP Morgan.

Public Service Enterprise Group (PEG) was reiterated at OverWeight at JP Morgan.

Phillip Morris (PM) was reiterated at Hold at Stifel Nicolaus.

McDonalds (MCD) was reiterated at OutPerform at RBC Capital Markets.

Entergy (ETR) was upgraded from Neutral to Buy at Citigroup.

Darden Restaurants (DRI) was initiated at Neutral at Longbow Research.

Whew! As noted at the outset, there have been more ratings changes in the past two weeks than we’ve seen for awhile.

As for my parting comments, there isn’t much more to say beyond what I’ve been saying for what seems like years now. That is, to hold on to a significant percentage of “dry powder” for redeployment when the downturn finally comes, yet be reluctant to part with good stocks because of high valuations, since it may be a long time before they come back down. If this seems contradictory, that’s because a “middle of the road” approach is advisable in times like now. There are some bargains available, such as retail REITs, some energy stocks, and most recently, GE. In each case, one must ask, is this a value, is the selloff overdone, or is it a value trap, low now, but going lower, perhaps to oblivion? Make your decision and act accordingly on a case by case basis, but never overweight any particular position such that a wrong choice will do serious damage to your overall portfolio.

JT

1st Posting for Week Beginning Monday 10/02/2017

Posted Sunday 10/01/2017 08:00 PM

It has been two weeks since my last post, but based on where all of the major stock averages are sitting, not much has changed. All are up modestly over the period, reflecting that stocks have gradually gained some ground, but not much. Another observation I have is that the venerable Dow Industrials average did not have a triple-digit move in either direction on any day of the two week period just ended. Considering that the average is now at 22405, and that a triple-digit move isn’t much of a move anyway these days, the take-away is that volatility has been minimal lately. It was a good time to take a little time off.

Since that worked out so well, I’m going to try for an encore, Thus, I won’t be posting again for another two weeks, and my look-ahead for dividends and earnings will be for the next two weeks instead of just one.

So, looking ahead two weeks, here are the announced upcoming ex-dividend dates for the stocks on my lists, and current yields based on Friday’s closing prices:

Kimco Realty (KIM), 10/3/2017, 5.54%.

Cisco Systems (CSCO), 10/4/2017, 3.48%.

Sysco (SYY), 10/5/2017, 2.44%.

General Dynamics (GD), 10/5/2017, 1.64%. All the defense stocks have run up so far that, based on yields, they no longer qualify as dividend stocks. GD will likely be purged when I update my lists, which will happen eventually, but not soon.

Darden Restaurants (DRI), 10/6/2017, 3.19%.

General Mills (GIS), 10/6/2017, 3.75%.

Verizon (VZ), 10/6/2017, 4.78%.

Universal (UVV), 10/6/2017, 3.76%.

AT&T (T), 10/6/2017, 5.02%.

Mid America Apartment Communities (MAA), 10/12/2017, 3.28%.

Consolidated Communications (CNSL), 10/12/2017, 7.95%.

All three stocks I listed in my prior post as being expected to report did so as planned. General Mills (GIS) continues to lag expectations, as the stock languishes in the low $50’s. Darden Restaurants (DRI) continues its high-wire balancing act, meeting expectations once again, even though it is in the intensively competitive “formula” restaurant business. ConAgra (CAG), like GIS, in the packaged foods business, with a similarly declining stock price chart, beat estimates and maintained full-year guidance, lifting the stock modestly after the report.  

As for the next two weeks, again I have three firms I follow scheduled to report: Paychex (PAYX) on 10/3/2017, Pepsico (PEP) on 10/4/2017, and RPM International (RPM), also on 10/4/2017.

Upgrades / downgrades on my stocks for the prior two weeks were as follows:

SCANA (SCG) was downgraded from Buy to Hold at Williams Capital Group.

Kellogg (K) was downgraded from OverWeight to Neutral at Piper Jaffray.

Procter & Gamble (PG) was reiterated at Buy at BofA/Merrill.

Johnson & Johnson (JNJ) was downgraded from Neutral to Sell at Goldman.

3M Co (MMM) was downgraded from Neutral to UnderWeight at JP Morgan.

Pfizer was upgraded from Equal Weight to OverWeight at Morgan Stanley.

General Mills (GIS) was reiterated at Sector Perform at RBC Capital Markets.

Magellan Midstream Partners L P (MMP) was upgraded from Neutral to Buy at Citigroup.

Public Service Enterprise Group (PEG) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

Ares Capital (ARCC) was initiated at OutPerform at Oppenheimer.

HCP Inc (HCP) was downgraded from Buy to Neutral at BofA/Merrill.

Public Service Enterprise Group (PEG) was upgraded from Equal Weight to OverWeight at Barclays.

Digital Realty (DLR) was initiated at Market Perform at William Blair.

Ventas (VTR) was initiated at Equal Weight at Capital One.  

Welltower (HCN) was initiated at Equal Weight at Capital One. 

Johnson & Johnson (JNJ) was initiated at Neutral at Citigroup.

KCAP Financial (KCAP) was initiated at Neutral at Ladenburg Thalmann.

Colgate Palmolive (CL) was upgraded from Equal Weight to OverWeight at Morgan Stanley.

Ensco (ESV), Noble Corp PLC (NE), and Transocean (RIG) were all upgraded from Neutral to Buy at UBS. These offshore drillers are certainly in buy territory if there is ever going to be a recovery for these firms. UBS evidently thinks it will happen.

Public Service Enterprise Group (PEG) was upgraded from Inline to Buy at Evercore ISI Group.

HCP Inc (HCP) was upgraded from UnderPerform to Inline at Evercore ISI Group.

Total S A (TOT) was downgraded from OutPerform to Sector Perform at RBC Capital Markets.

Kimco Realty (KIM) was upgraded from Neutral to OverWeight at JP Morgan.

Statoil (STO) was upgraded from UnderPerform to Neutral at Exane BNP Paribas.

Digital Realty (DLR) was resumed at Neutral at Citigroup.

Altria (MO) was upgraded to OutPerform at Cowen & Co.

Darden Restaurants (DRI) was upgraded from Neutral to OutPerform at Robert W Baird.

Darden Restaurants (DRI) was upgraded from Hold to Buy at Maxim Group.

Darden Restaurants (DRI) was reiterated at Neutral at Credit Suisse.

Darden Restaurants (DRI) was reiterated at Equal Weight at Morgan Stanley.

Darden Restaurants (DRI) was reiterated at Sector Perform at RBC Capital Markets.

Coca Cola (KO) was reiterated at Buy at HSBC Securities.

AT&T (T) was reiterated at Equal Weight at Morgan Stanley.

SCANA (SCG) was reiterated at Hold at Williams Capital Group.

Valero (VLO) was reiterated at OutPerform at Cowen & Co.

McDonalds (MCD) was upgraded from Neutral to Buy at Longbow.

Southern Co (SO) was upgraded from Sector Perform to OutPerform at RBC Capital Markets.

SCANA (SCG) was downgraded from Hold to Sell at Williams Capital Group. The analyst(s) at that firm have been all over the place on SCG in just the last two weeks, even as nothing has changed at SCG.

Raytheon (RTN) was upgraded from Hold to Buy at Deutsche Bank.

It sure seems like a lot of upgrade / downgrade action occurred for such a low-volatility two week period!  

The market certainly has proven the doom-sayers wrong, at least so far, even as stock prices continue to climb to (in the view of some) unsustainable levels. There are, of course, many ways to evaluate stock prices, but one of my favorites is dividend yield. Most firms have a set dividend policy, and one way to evaluate a firm with a long dividend history is by average (or median) yield, compared to the current yield. If the yield is substantially below where it has historically been, the stock is probably over-priced. Many fall into this category today. As I have noted previously, there are some bargains still available, but you can bet that they are bargains for a reason. And for firms that are NOT bargains, they are likely performing well, but one must consider, what is the return going to be if acquired at the current (high) price? Investing is never easy, but these days, it seems harder than ever. I’m holding cash and waiting for it to get easier!

JT

1st Posting for Week Beginning Monday 09/18/2017

Posted Sunday 09/17/2017 08:00 PM

Stocks resumed their climb after the minimal setback of a couple of weeks ago, as the Dow Industrials and the NASDAQ indexes both set new record highs. North Korea, hurricanes, $20 trillion national debt, whatever, nothing seems to discourage stock buyers. It will end someday, no doubt, but apparently not for a while yet.

In reviewing last week’s update, I realized that I had been off a whole week, reporting upcoming earnings and dividends for the week ahead based on a starting date of September 18, not September 11. At my age, I sometimes forget what year it is, or what month we’re in, but never what week is coming up! Further, I will be out of town next weekend, so this posting will look ahead two weeks instead of just one, as is my usual practice, and thus this will be my last posting for the month of September 2017. So with all that said, here are the ex-dividend dates on stocks I follow that I missed reporting last week, plus the known ex-dividend dates coming up for my stocks in the next two weeks.

Ventas (VTR), 9/11/2017, yield 4.50%.

Newmont Mining (NEM), 9/13/2017, yield 0.59%. 

Dr Pepper Snapple Group (DPS), 9/13/2017, yield 2.53%. 

Medical Properties Trust (MPW), 9/13/2017, yield 7.35%. 

Fifth Street Finance (FSC), 9/14/2017, yield 5.07%. 

Frontier Communications (FTR), 9/14/2017, yield 18.58%. 

Ares Capital (ARCC), 9/14/2017, yield 9.64%. 

Potlatch (PCH), 9/14/2017, yield 3.13%. 

TICC Capital (TICC), 9/14/2017, yield 12.07%. 

Coca Cola (KO), 9/14/2017, yield 3.21%. 

Iron Mountain (IRM), 9/14/2017, yield 5.62%.

Merck (MRK), 9/14/2017, yield 2.84%. 

Altria Group (MO), 9/14/2017, yield 4.24%. 

Greif Cl A (GEF), 9/15/2017, yield 2.96%. 

General Electric (GE), 9/14/2017, yield 4.00%. GE has declined over $7 since the first of this year, for no good reason that I have seen. When GE yields 4% or more, it is in buy territory, in my opinion.

That’s it for the dividends that should have been noted in last week’s post. Now, looking ahead two weeks, here are the payouts currently scheduled.

Eni S p A (E), 9/18/2017, yield 4.79%. E pays twice a year. Note that the yield is before Italy’s 28% withholding. Actual yield based on what you actually receive is about 3.50%. If held in a non-retirement account, the amount withheld is potentially eligible for the foreign tax credit on a US Tax Return. If held in an IRA, no tax credit is allowed.

Gladstone Investment (GAIN), 9/19/2017, yield 8.33%. GAIN pays monthly.

PennantPark Investment (PNNT), 9/19/2017, yield 9.49%.

Horizon Technology Finance (HRZN), 9/19/2017, yield 11.15%. HRZN pays monthly.

Apollo Investment (AINV), 9/20/2017, yield 9.98%.

Main Street Capital (MAIN), 9/20/2017, yield 5.70%. MAIN pays monthly.

Total S A (TOT), 9/21/2017, yield 5.02%. Note that the yield is before France’s 30% withholding. Actual yield based on what you actually receive is about 3.50%. Same situation as Eni, above.

Phillip Morris International (PM), 9/26/2017, yield 3.67%. A tobacco stock yielding less than 4% is a no go in my opinion.

MFA Financial (MFA), 9/27/2017, yield 9.21%.  

AGNC Investment (AGNC), 9/28/2017, yield 10.29%. AGNC is a monthly payer.

STAG Industrial (STAG), 9/28/2017, yield 5.01%. STAG pays monthly.

Prospect Capital (PSEC), 9/28/2017, yield 10.71%. PSEC is another monthly payer.

Annaly Capital (NLY), 9/28/2017, yield 9.80%.

Nucor (NUE), 9/28/2017, yield 2.80%.

Realty Income (O), 9/29/2017, yield 4.28%. O is the most famous monthly payer of all.  

As for earnings, none of my stocks reported last week. General Mills (GIS) is still scheduled to report 9/20/2017, as noted in last week’s post. As for the following week, Darden Restaurants (DRI) is scheduled to report on 9/26/2017, and ConAgra (CAG) on 9/28/2017.

It was another slow week for upgrades / downgrades, other than for the Macquarie Group.  Stocks on my lists receiving attention from analysts last week are noted following. As I frequently remind readers, these recommendations are presented for informational purposes only, and are not to be considered actionable advice.

ONEOK (OKE) was resumed at Neutral at JP Morgan.

Energy Transfer Equity L P (ETE) was reiterated at Buy at Jeffries.

Nucor (NUE) was downgraded from OverWeight to Equal Weight at Morgan Stanley, and upgraded from Neutral to Buy at Citigroup.

Southern Co (SO) was upgraded from Neutral to Buy at Guggenheim.

Colgate Palmolive (CL) was initiated at Neutral at Macquarie.

Coca Cola (KO) was initiated at Neutral at Macquarie.

Dr Pepper Snapple (DPS) was initiated at Neutral at Macquarie.

Pepsico (PEP) was initiated at OutPerform at Macquarie.

Procter & Gamble (PG) was initiated at OutPerform at Macquarie.

Kimberly Clark (KMB) was initiated at Neutral at Macquarie.

Freeport-McMoRan (FCX) was initiated at Sector OutPerform at CIBC.

Like many investors, I have a sense of impending doom about the markets, and the country as a whole. The latest weekly update from John Mauldin presenting the dire condition of local and state government pension funding is sobering reading indeed, especially if you are retired or approaching retirement from any governmental position. Of course, part of the problem is the many abusive practices that would never be allowed by a responsible pension sponsor, such as inflating the final benefit by counting overtime pay or bonuses in the formula. A “hard money” newsletter I subscribe to has presented the best summarization of the root problem I have ever read. I don’t have room to reproduce it completely, but I will try to do it justice by condensing it as follows:

“The larger problem is that we have been going socialistic for over a hundred years, and the result is an intractable problem caused by money and credit expansion, and the fact that it cannot be corrected or even slowed down without an economic depression that would likely end what’s left of the American experiment in representative democracy and limited government. That is because the social welfare system has created a huge population of criminals, addicts, crazies, governmental dependents, and people of low character that are sympathetic to the goals of the far left, and who would certainly support the end of the constitution and the rule of law in pursuit of their social goals.”

You can see it getting worse daily, as formerly outrageous behavior becomes increasingly tolerated and accepted by apologists of all stripes.   

It is hard to stay focused on the minutiae of earnings, dividends, economic releases, and market swings with the backdrop as described unfolding. If the free market disappears, none of these data points will much matter.

JT