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Economics Market Update Stock Market

Stock Market Week in Review (12/4/22) – Powell Rally

This weekly market recap is brought to you by Koyfin, a powerful analytical tool that I am proud to partner with. Their platform is entirely customizable for whatever data you want to look at including stocks, ETFs, mutual funds, currencies, economic data releases (one of my personal favorites used often for these posts), crypto, and even transcripts of company events! Click the link above to get a special offer only for Dividend Dollar readers or go give my product review a read if you’re interested!

Weekly Review

The market seemed to be in a turkey coma as there wasn’t much action in the first half of the week. The market was choppy while waiting for Fed Chair Powell’s speech on Wednesday and the key economic data to follow.

The market liked what it heard in Mr. Powell’s speech and things took off in a big way on Wednesday off of his hints that the Fed may slow the pace of rate hikes.

Some will argue that he actually loosened the screws a bit. I would argue he didn’t even bring his toolbox. The market, which was waiting for a to be hit like a nail by a hammer, was relieved when he did not.

This became a rally catalyst that caused some short-covering and some chasing action as the S&P 500 broke above key resistance at its 200-day moving average.

Powell’s actual speech repeated just about everything he said following the November FOMC meeting. Some added attention was paid to his summation that “the ultimate level of interest rates will be somewhat higher than previously expected” versus the original contention that “the ultimate level of interest rates will be higher than previously expected.”

Mr. Powell’s talk (and tone) presumably weakened the fear of another 75-basis point rate hike. Granted the fed funds rate is still going higher from current levels, but market participants can smell a peak in the policy rate around 5.00% in the first half of next year. If the FOMC elects to raise the target range by 50 basis points at the December meeting, the target range will be 4.25-4.50%.

On Thursday, market participants received the October Personal Income and Spending Report, which favored the “smaller” rate hike at the same time it favored a soft landing possibility.

Personal income increased 0.7% month-over-month in October and personal spending jumped 0.8%. The PCE Price Index was up 0.3% month-over-month and the core-PCE Price Index, which excludes food and energy, increased 0.2%.

On a year-over-year basis, the PCE Price Index was up 6.0%, versus 6.3% in September, and the core-PCE Price Index was up 5.0%, versus 5.2% in September.

The big rally effort slowed as market participants contended with the notion that the upside moves might have been an overreaction and that the growth environment is going to be challenging given the past rate hikes and the rate hikes that are yet to come.

A 49.0% reading for the November ISM Manufacturing Index, which is the first sub-50% reading (the dividing line between expansion and contraction) since May 2020, hurt some of the rebound enthusiasm.

The November employment report on Friday also tested the rally. Nonfarm payroll growth was higher than expected, the unemployment rate held near a 50-year low of 3.7%, and average hourly earnings increased at a robust 0.6% month-over-month, leaving them up 5.1% year-over-year.

The report itself was good news from an economic standpoint, yet the market saw it as bad news as it gives more room for the Fed to slow the economy with rate hikes. The report signals higher for longer with respect to the target range for the fed funds rate.

The initial retreat following the employment report saw the S&P 500 breach its 200-day moving average, but by Friday’s close the index reclaimed a position above that level. All in all, this week was a win for the bulls given that the market showed nice resilience to selling efforts and the S&P 500 held the line at that key technical level, next is the downward trend line 👀

8 of the 11 S&P 500 sectors closed with a gain on the week. Communication services and consumer discretionary enjoyed the biggest gains. Energy, utilities, and financials were the lone sectors in the red by the end of the week.

In the Treasury market, there were big down swings predicated on the thinking that maybe the Fed won’t have to raise rates as high as feared. The continued inversion along the yield curve reflects the festering concerns about the Fed raising rates into a weakening economy and inviting a recession. The 2-yr note yield fell 19 basis points to 4.29% and the 10-yr note yield fell 18 basis points to 3.51%.

Dividend Dollars’ Opinion

That’s it for the recap. Now for my opinion!

As I stated last week, we just barely broke above the 200-day EMA. We opened this week below it and would have finished there if the market hadn’t rallied so hard off of Powell’s speech. I even called that we could gap fill to the 4,080 area, and we did!

I’m not trying to make a habit out of predicting things, just simply share with you what I’m noticing. And I’m noticing that an end of year rally could push us slightly higher to the mother of all trendline’s. The red line in my chart below has been rejected every time since ATHs.

We could very easily stay fighting for that trend line through the end of the year before a significant breakout happens. But when it does happen, the direction is anybody’s guess. My money is on down.

Here’s why: what did Powell say on Wednesday that warranted a 3% surge on the S&P? Signals of slowing rate hikes are nice… but the probability of a 50-point rate hike in December has not changed. The CME Fedwatch tool showed a 75% probability of a 50-point hike last week. The probabilities for a smaller hike in the February meeting were fairly unchanged as well.

People all over are anticipating a “Fed Pivot”. But the Fed is far from pivoting. A Fed Pivot happens when the Fed reverses their monetary policy stance and occurs when the underlying economy has changed to such a degree that the Fed can no longer maintain its policy.

What on Wednesday suggested that this was the case? We are still a ways away from the peak rate and even then we will be at that rate for sometime before a rate cut is imminent. So why did the market bounce as it did following the speech?

The main reason is that expectations were low. We expected him to stay hawkish, instead we got optimistic. To me, playing the expectations game is silly. Rates are rising, and they will be staying there for a while. This will eat at companies’ earnings and sooner or later will be reflected in stock prices.

Be ready for deals, the technical indicators say a dip is coming. Worse yet, a recession is still not out of the picture.

I think that inflation is still a larger problem than the market anticipates. We have seen the market move higher on “better-than-expected” inflation readings where inflation is still over 7% and CPI has yet to peak.

The Fed may lessen the size of the rate hikes, but we are a long way away from ever having rates decreased. Till then, the market is at risk of entering a very serious recession.

The Fed is trying to engineer a soft-landing and so far they have done a great job of it.

However, the longer rates stay high, the closer we may get to seeing the Fed’s planned economic slow down go too far. GDP, employment, real incomes, etc. These things will start to waiver, earnings will start to miss, and the market will start to look quite overbought at these levels which will kick off some serious selling and capitulation.

Because of this, I am short with a position in $SDS and $SPXS and am holding more cash than normal. The short is only 2% of my portfolio and the cash is 10%. I’ll be adding to this short and cash position through to the end of the year if we remain trending up, but I think we are getting closer to a flip

I constantly make moves in my portfolio according to this thesis. You can read about these moves in my weekly portfolio update here.

And if you like updates like this, follow my Twitter or my CommonStock page where I post updates on the economic data throughout the week.

Regards,

Dividend Dollars

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Economics Market Recap

Stock Market Week in Review (11/25/22) – Thanksgiving & FOMC

This weekly market recap is brought to you by Koyfin, a powerful analytical tool that I am proud to partner with. Their platform is entirely customizable for whatever data you want to look at including stocks, ETFs, mutual funds, currencies, economic data releases (one of my personal favorites used often for these posts), crypto, and even transcripts of company events! Click the link above to get a special offer only for Dividend Dollar readers or go give my product review a read if you’re interested!

Weekly Review

Despite the low volume from this holiday week, the markets were still able to extend their green streak. Thanksgiving week has averaged 0.6% returns since 1945, so this was not uncommon.

The seasonality helped to offset the market’s ongoing growth concerns which may prove to be exacerbated going forward with China re-engaging in COVID-related measures.

China confirmed their first COVID-related death in six months. New lockdown measures have been reported in Beijing.

Ignoring seasonality, the upside this week was encouraged by better-than-expected earnings from retailers like Best Buy ($BBY), and Abercrombie ($ANF) as well as some tech names like Dell ($DELL) and Analog Devices ($ADI). Deere ($DE) the farm equipment company also was among the more notable earning reports this week.

Disney ($DIS) was also a winner this week off of the news that CEO Bob Chapek stepped down with former CEO Bob Iger reclaiming the roll for two years.

Like earnings, some economic reports were better than expected this week. The October Durable Goods Orders, October Home Sales, and the November University of Michigan Index of Consumer Sentiment read well. On the other hand, Weekly Initial Claims and Preliminary November IHS Markit Manufacturing and Services PMIs were worse than expected.

The FOMC minutes for the November 1-2 meeting was revealed on Wednesday. The report showed that “a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.” This supports the market’s notion that the Fed is likely to raise rates by 50 basis points in December rather than a 75-point hike. Before the minutes were released, the CME Fedwatch Tool showed an 80% chance that the next hike is for 50 basis points.

All 11 sectors of the S&P closed with a gain this week. Materials and Utilities making the largest gains while energy showed the thinnest gain.

Dividend Dollars’ Opinion

That’s it for the recap. Now for my opinion!

As I stated last week, due to positive seasonality the S&P could push above the 200-day EMA. I also stated that volume would be low, so if it pushed higher, it would be slow. And that’s exactly what happened this week.

We barely broke above and held the 200-day EMA this week, and that was with low volume. That makes me think there’s not much strength behind it.

However, this seasonality could continue through the end of the year. I wouldn’t be surprised if we see a gap fill to the $4,080 area or even test the trend line drawn down from the ATH in January.

But after that, it could be anybody’s guess.

Over the medium term, I am bearish. I think that inflation is still a larger problem than the market anticipates. We have seen the market move higher on “better-than-expected” inflation readings where inflation is still over 7% and CPI has yet to peak.

The Fed may lessen the size of the rate hikes, but we are a long way away from ever having rates decreased. Till then, the market is at risk of entering a very serious recession.

The Fed is trying to engineer a soft-landing and so farthey have done a great job of it.

However, the longer rates stay high, the closer we may get to seeing the Fed’s planned economic slow down go too far. GDP, employment, real incomes, etc. These things will start to waiver, earnings will start to miss, and the market will start to look quite overbought at these levels which will kick off some serious selling and capitulation.

Recession indicators such as GDP forecasts, yield curve inversion, falling PMI, and tightening lending standards suggest it is more likely to go that route rather than the preferred soft-landing.

Because of this, I am short with positions in $SDS and $SPXS and am holding more cash than normal. The short is only 1.3% of my portfolio and the cash is 7.1%. I’ll be adding to this short and cash position through to the end of the year if we remain trending up.

I will be writing a portfolio update later this weekend, so stay tuned for that in order to read more about my positions and plans.

And if you like updates like this, follow my Twitter or my CommonStock page where I post updates on the economic data throughout the week.

Regards,

Dividend Dollars

Categories
Dividend Stocks Due Diligence

Stock Analysis: Activision Blizzard ($ATVI) Acquisition Opportunity

Quick foreword for you before you continue reading. I wrote this analysis for a stock pitch competition on a platform called CommonStock. The competition has a grand prize of $5,000 dollars. Winning that prize would be absolutely a huge blessing for my life right now. I also pay for this website and work hard to make my information accessible here and on social media. So if you read this article, appreciate the information, and want to show me some support please go over to CommonStock and upvote and comment on my post using this link to help me in the competition. Thank you and lets get to the analysis!

If you don’t know, Activision is a giant gaming company and thus I thought that it was only right to slide in as much gaming slang as I can into this pitch. So if you’re not a gamer, pull up Urban Dictionary or click the links to look up the gaming terms in italics and dive into the analysis!

Thesis:

Activision stock ($ATVI) presents a poggers merger arbitrage opportunity with Microsoft announcing on January 18th, 2022, their agreement to purchase Activision Blizzard for $95 cash per share with an expected closing date of July 2023. At a current share price of $77.30, this arbitrage opportunity boasts roughly 25% upside in less than a year if the deal goes through. Several analysts predict that the FTC is unlikely to stop the deal, which makes this attractive acquisition play the perfect spot to buy into a stock that is down over 25% from the highs of last year and let your position sit with a safe amount of risk and reward in this volatile market.

Business and Industry Review

Activision Blizzard is one of the world’s largest video game publishers and owns an OP lineup of some of the biggest and well-known video game franchises around including Call of Duty and Crash Bandicoot from the Activision segment, World of Warcraft and Diablo from the Blizzard Segment, and Candy Crush from the mobile focused King segment.

Through strategic acquisitions of studios and development of diverse product lines, Activision has built multiple revenue streams which include premium full game sales, free-to-play offerings which offer in-game content and currency for purchase, game subscriptions for ongoing access, and ad revenue from mobile game offerings. Activision Blizzard also has ownership of Major League Gaming (MLG), the professional esports organization that holds official video game tournaments for sweats throughout North America. The company plans to build an e-sports focused television network and leverage Activision’s competitive titles in the process.

As of 2021, the global video game market value was $178 billion in U.S. dollars and is predicted to reach $268 billion by 2025 with roughly 26% of the global population regularly playing video games. This number has grown significantly in the last few years due to the growing popularity of mobile games, with 69% of gamers saying a smartphone device is their platform of choice, followed by PCs and then consoles.

As the sixth largest video game publisher in the world and publisher of some of the most lucrative franchises of all time, Activision is strategically positioned with their diverse lineup of titles available on most platforms to benefit from that worldwide growth. Though plagued with game delays last year caused by COVID-19 and workplace issues, it appears that Activision may even be able outpace the industry’s growth this year as they push hard to develop new versions of their existing franchises and introduce new ones. For example, the new addition to the Diablo franchise, Diablo Immortal, was just released last month on mobile and PC, Overwatch 2 is coming October 4th 2022, Warcraft Arclight Rumble (a WOW mobile game) is set to release later this year, followed by the next World of Warcraft expansion, both the much awaited Diablo IV and the next Call of Duty: Modern Warfare installment are scheduled to release 2023, plus an unannounced survival game that information has yet to be released for.

Financials

Activision Blizzard appears to be very well managed with a balance sheet of nearly $11 billion in cash and cash equivalents which easily covers their $3.6 billion of long-term debt as of March 31st, 2022. The firm generated $627 million in free cash flow for Q1 2022 and $2.3 billion for its fiscal year 2021, averaging a free cash flow of $2.07 billion per year for the last three years. Given their hefty amount of cash and their ability to generate more of it year after year, it is reasonable to assume the firm can issue a large amount of debt to finance any potential acquisitions or pay down their current long-term debt.

The company’s last big acquisition was when they purchased King Digital, the mobile development company behind the hit Candy Crush game series, for $5.9 billion. For 2021, the King segment continues to be their fastest growing segment with $2.58 billion in net revenues, a $416 million increase from the prior year and a $549 million increase from the year before that. While some argue that capital may have been better allocated toward organic growth, the $5.9 billion dollar bet on King has paid off. Similar large acquisitions are not likely to continue as the company continues to focus on growing their reach and player investment in their franchises by producing “more frequent cadence of compelling content, introducing new free-to-play and mobile experiences, and making our franchises more social” as read from the 2021 annual report.

For their bottom line, Activision Blizzard has averaged a net income of $2.13 billion per year over the last 3 years with average net income margin of 27%. Such financial success has allowed the company to pay a small yearly dividend that has not yielded higher than 1% since 2015. Currently, the yield is sitting at 0.62%, just above its five-year average of 0.56%. The firm’s P/E ratio is at 24.6 just under the five-year average of 24.9. Looking at both metrics, it appears that the stock is fairly valued… luckily for us, tech and gaming giant Microsoft thinks otherwise.

Acquisition

Management Scandals:

Prior to the agreed acquisition, Activision experienced a workplace discrimination and harassment lawsuit that caused activist employees to attempt to remove CEO Bobby Kotick as CEO for falling “short of ensuring that all employees’ behavior was consistent with [Activision Blizzard’s] values” through a petition calling for his resignation that more than 1,800 employees signed. A Wall Street Journal story later revealed that Kotick knew about prior allegations and had protected certain executives from repercussions.

Despite this call to action, Kotick still remains CEO mostly due to his track record with the company. Kotick pulled the company out of bankruptcy three decades ago and positioned it to capitalize on booms in computing, video games, and now e-sports. His reputation as having one of the most revered minds in business has made him one of the highest paid executives in America and has earned him the full support of the board.

However, despite his history of successfully leading the company, this lawsuit portrayed the toxic work environment that developed over the years and caused the stock to drop from the high $90s down to $56.40 per share at the lowest.

Microsoft Deal:

It was at this point that Microsoft saw an opportunity to grow their gaming segment. On January 18, 2022, with the stock sitting at $65, Microsoft announced $68.7 billion deal to acquire Activision. Microsoft feels confident in their ability to improve Activision’s workplace environment and made their offer of $95.00 per share. The deal is expected to close in July of 2023 assuming regulatory approval is provided.

The US Federal Trade Commission and UK Competition and Market Authority are currently evaluating the deal and its impact on the gaming industry. If the deal goes through, Microsoft’s gaming market share will grow from 6.5% in 2020 to 10.7%.

Given the fact that Microsoft has promised to deliver the game lineup to all platforms as noted in a statement from Microsoft President Brad Smith, they have committed to respecting data privacy of consumers, and their presence in the gaming industry is still smaller than Tencent’s ($TCEHY), Sony’s ($SONY), and Apple’s ($AAPL), I believe the likelihood of the deal being stopped by authorities is slim.

Deal Outcomes:

The best-case scenario is an investor purchases $ATVI shares today, the deal goes through next year, and they are paid out $95 dollars per share, a roughly 25% increase on today’s price.

Next best scenario is an investor buys $ATVI shares today, the regulators terminate the deal, and say “GGs”. In this scenario, the investor still owns an extremely profitable and undervalued video game company based on the firm’s performance and financials detailed above. In addition to that, depending on the date when the deal is terminated, Activision Blizzard is entitled to a $2 to $3 billion reverse termination fee from Microsoft on top of the ~$2 billion in revenue that the company is already poised to make in 2022, giving them huge profits for fiscal year.

Worst case scenario is an investor buys $ATVI today and the deal gets terminated on Activision’s end for breaching any of the various merger agreement terms. This is unlikely to happen as the board and shareholders have already voted in approval of the acquisition.  However, for the sake of analysis, if this does happen Activision must pay Microsoft a $2.27 billion termination fee effectively wiping out any expected profits for the year.

Expected Value:

Using these scenarios and a Barron’s article on the likelihood of the deal going through, we can make a straightforward arbitrage calculation to determine the expected value of the deal. Referencing the table below, the three scenarios are represented with my best guess on probabilities and share value with the information presented. With analyst consensus on the deal closing and a margin of safety if the regulators terminate the deal, the arbitrage play has inherent value above the current stock price.

As we get closer to the deal date and as regulatory entities issue their decisions, the arbitrage gap should tighten presenting a rare opportunity to camp cash in a stock with potential for a 25% gain if the transaction closes. On the other hand, if the deal does not close, Activision continues to operate with their current positive momentum that may one day grow them into an even larger video game company with a dividend to match.

Conclusion:

Activision presents an attractive merger arbitrage opportunity with Microsoft offering to purchase Activision Blizzard for $95 cash per share with an expected closing date of July 2023. At a current share price of $77.30, this arbitrage opportunity boasts roughly 25% upside in less than a year if the deal goes through, which looks more likely to happen than not. If the deal fails, the stock still looks like a great long-term hold due to its diverse product line and impressive financials, regardless of which way the termination fee falls.

Overall, the company provides an attractive opportunity to buy into a position with risk and rewards that are easy to understand, which is a factor that I greatly appreciation in today’s tumultuous market. The deal is so attractive that I have already bought into it!

How do you think the merger will play out? Do you think my valuation is correct? What are your opinions on the management scandal? Let me know your thoughts and questions below!

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Dividend Stocks Dividends Portfolio

Dividend Portfolio: 5/27/2022 Week in Review

Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.

This week the S&P 500 broke a seven-week losing streak. Last Friday the S&P hit its lowest level since March of 2021, only to rally back a strong 6.6% this week. The NASDAQ did better with a gain of 6.8% while the DOW was at 6.2%.

All eleven sectors of the S&P finished positive with consumer discretionary leading the way with a 9.2% performance to follow its rather disappointing performance last month. The sector still down over 5% for the month of May, largely due to the terrible showing of large retailers being shocked by inflation and supply chain concerns. However, the second half of this past week saw renewed gumption from the retailers with hopes that the worst is behind us. This is evident if the performances of Best Buy (BBY), Costco (COST), Target (TGT), and Walmart (WMT) with respective gains of 16.7%, 12.2%, 8.3%, and 7.7% for the week.

Mega caps also did some work with Apple (AAPL), NVIDIA (NVDA), and Tesla (TSLA) contributing to the rally with similar gains.

Through this rally, the energy sector continues to show strength and is up to almost 17% gains for the month of May. Crude oil is back to its high prices for the month.

Treasuries continued their gains for the third consecutive week this week, drawing some strength from speculation that the Fed could pause its rate hikes in September.

Overall, this was a great week! We saw some volatility in the first two days, but the market rallied strongly after the S&P managed to stay above last week’s lows. Let’s dive into the portfolio review!

Portfolio Value

To date, I have invested $9,100 into the account, the total value of all positions plus any cash on hand is $9,531.06. That’s a total gain of 4.74%. The account is $448.18 for the week which is a 4.93% gain, after briefly being in the negative territory last week.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is down -6.7% whereas our portfolio has an overall return of 4.8%! I love tracking my portfolio against a benchmark like the S&P. The above chart comes from Sharesight which makes portfolio and dividend management a breeze!

We added $120 in cash to the account this week. The stock purchases made with this will be broken out below.

Portfolio

Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

This week our annual dividend income increased by $5 at a yield of 3.94%. For my portfolio, its dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner. Also, with so many positions being down, it’s hard not to experience a growing dividend yield.

Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the first chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. To combat that, I have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.

Dividends

This week we received two dividends. $1.84 from ETRACS levered dividend ETN (SMHB) and $2.45 from Starbucks (SBUX).

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested.

Dividends received for 2022: $122.84

Portfolio’s Lifetime Dividends: $145.76

Trades

Below is a breakdown of my trades this week even while on vacation!

  • May 23rd
    • ETRACS 2xMonthly Pay Leveraged (SMHB) – added 0.18918 shares ($1.84 dividend reinvested)
  • May 24th
    • Bank of America (BAC) – added 0.5 shares at $35.50
    • Lowe’s (LOW) – added 0.1 shares at $183.80
  • May 25th
    • SCHD – added 0.131113 shares at $76.27 (recurring investment)
    • XYLD – added 0.22901 shares at $43.67 (recurring investment)
  • May 27th
    • Bank of America (BAC) – added 0..25 shares at $36.68
    • Lowe’s (LOW) – added 0.3 shares at $197.20

Summary

That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week and stay safe!

Categories
Dividend Stocks Dividends Portfolio

Dividend Portfolio: 5/20/2022 Week in Review

Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.

This week I was out on vacation but still managed to monitor the market and make some buys. The S&P fell 3.1% this week following more disappointing corporate updates and data that shakes potential economic growth. The Nasdaq was down 3.8% for the week followed by the Dow which was down 2.9%.

Consumer staples and consumer discretionary segments were hit particularly hard this week as many retailers provided cautious outlooks due to cost pressures and supply chain concerns. Walmart (WMT), Target (TGT), and Ross Stores (ROST) were the main players here, expect to see more of this next week as more earnings reports are published. My eyes will be on Best Buy (BBY) who had a particularly rough week following the poor performance of these retailers.

On the other hand, utilities, health care, and energy sectors ended the week green, if only by a little. There was some rebound actions throughout the week pushed mainly by a contrarian approach to our potentially oversold market with a BofA survey showing that cash levels of fund managers are at their highest since 9/11 (6.1%).

The market barely stayed out of bear market territory this week amid growth concerns fueled by stubborn inflation, supply chain issues, and a number of economic data releases that were relatively disappointing.

The Federal Reserve Chair Powell spoke on inflation and said that the Fed will be more aggressive with rate hikes if inflation doesn’t come down in an obvious way. All eyes are on inflation and that will continue to be the driving narrative behind the market’s performance.

It was a tough week and my portfolio was no exception. Let’s dive into the portfolio review now.

Portfolio Value

To date, I have invested $8,980 into the account, the total value of all positions plus any cash on hand is $8,901.17. That’s a mere loss of $78.83 for a total return of -0.88%. The account is down $142.75 for the week which is a 1.58% loss.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is down -12.44% whereas our portfolio has an overall return of -0.88%! It’s tough seeing the portfolio come down from highs just a few weeks ago, but it is good that we are still beating the market by more than a 10% difference.

We added $180 in cash to the account this week. The stock purchases made with this will be broken out below.

Portfolio

Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

This week our annual dividend income increased by $9 at a yield of 4.16% and passed the $1 per day milestone with an annual income of $369! For my portfolio, its dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner. Also, with so many positions being down, its hard not to experience a growing dividend yield.

Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the first chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. In order to combat that, I have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.

Dividends

This week we received only one dividend. $1.44 from Texas Instruments (TXN)

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested.

Dividends received for 2022: $118.55

Portfolio’s Lifetime Dividends: $141.47

Trades

Below is a breakdown of my trades this week even while on vacation!

  • May 16th
    • Aflac (AFL) – added 0.5 shares at $55.82
  • May 17th
    • Microsoft (MSFT) – added 0.1 shares at $265.20
    • Texas Instruments (TXN) – added 0.008306 at $173.38 ($1.44 dividend reinvestment)
  • May 18th
    • Best Buy (BBY) – added 0.25 shares at $74.84
    • Bank of America (BAC) – added 0.5 shares at $35.60
    • SCHD – added 0.131863 shares at $75.84 (recurring investment)
    • XYLD – added 0.223738 shares at $44.70 (recurring investment)
  • May 19th
    • ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.48
  • May 20th
    • Best Buy (BBY) – added 0.75 shares at $70.07

Summary

That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week and stay safe!

Categories
Dividend Stocks Dividends Portfolio

Dividend Portfolio: 5/13/2022 Week in Review

Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.

This week the downtrend continued in the markets with each of the major indices falling more than 2.0% this week. 10 of the 11 S&P sectors closed lower with 5 of them falling more than 3% (IT, consumer discretionary, financials, and real estate). Consumer staples, one of the more defensive sector, ended with a 0.3%.

Inflation readings remained high, but a better than expected core PPI reading for April revived “peak inflation” talks. The Fed is expected to remain aggressive on tightening plans to continue the fight against inflation.

High growth story stocks like Unity (U), Coinbase (COIN), and Peloton (PTON) continued to disappoint this week. This week the stable coin TerraUSD (UST) collapsed. Billions of dollars in crypto wealth were lost, shocking the whole market. UST was designed to retain a value of one US dollar at all timed but was depegged and fell to around 14 cents at the worst.

Growth concerns in the stock and crypto market, peak inflation hopes, and a general flight to safety drew Treasury yields lower this week.

Sentiment was further pressured by the S&P breaking below 4,000 briefly, Apple (AAPL) losing its title as the world’s most valuable company, and heightened volatility driven by selling. That was until a rally occurred on Friday to end the week with a much overdue bounce.

Overall, it was another tough week. However, amid this volatility, dividend stocks continue to show resilience. Let’s dive into it!

Portfolio Value

To date, I have invested $8,800 into the account, the total value of all positions plus any cash on hand is $8,881.09. That’s a mere gain of $81.09 for a total return of 0.92%. The account is down $45.13 for the week which is a 0.51% loss.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is down -9.69% whereas our portfolio has an overall return of 0.92%! It’s tough seeing the portfolio come down from highs just a few weeks ago, but it is good that we are still beating the market by nearly a 10% difference.

We added $190 in cash to the account this week. The stock purchases made with this will be broken out below.

Portfolio

Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

This week our annual dividend income increased by $13 at a yield of 4.07%. For my portfolio, its dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner.

Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. In order to combat that, I have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.

Dividends

This week we received two dividends. $1.62 from Air Products & Chemicals (APD) and $1.50 from Reality Income (O)

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested.

Dividends received for 2022: $117.11

Portfolio’s Lifetime Dividends: $140.03

Trades

Below is a breakdown of my trades this week.

  • May 9th
    • Bank of America (BAC) – added 0.5 shares at $36.58
    • Starbucks (SBUX) – added 0.15 shares at $75.27
    • Atlantica Sustainable Infrastructure (AY) – added 0.5 shares at $29.96
    • ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.48
    • Air Products & Chemicals (APD) – added 0.006881 shares at $235.43 ($1.62 dividend reinvested)
  • May 10th
    • ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.03
  • May 11th
    • SCHD – added 0.132714 shares at $75.35 (recurring investment)
    • XYLD – added 0.223002 shares at $44.84 (recurring investment)
    • ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $9.10
  • May 12th
    • ETRACS 2xMonthly Pay Leveraged (SMHB) – added 1 share at $8.90

Summary

That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week and stay safe!

Categories
Dividend Stocks Dividends Portfolio

Dividend Portfolio: 5/6/2022 Week in Review

Welcome back to Dividend Dollars and our weekly review where we discuss what happened in the market and our portfolio.

The first week of May was a volatile one that ended in losses for the major averages. The NASDAQ had the worst of it with a 1.5% loss followed by 0.3% from the Dow Jones and 0.2% from the S&P.

The week started with some minor gains and then selling slapped the S&P down to its lowest level in almost a year. The market then bounced back from that weak start and made gains for the next two days. The rally really gained steam on Wednesday following the FOMC meeting where a 50-basis point rate hike was announced. Fed Chair Powell confirmed that a 75 point hike is not being considered which may have been the catalyst for the midweek rally. The S&P had made over a 3% gain on Wednesday.

By the end of the trading day on Thursday, those gains and more were lost. Friday was also weak and did not show much improvement even after the April jobs report beat expectations. Earnings season continued this week, but even the good headlines from notable reports still spurred selling due to market headwinds/concerns.

The last month was rough, and my portfolio was not immune from it! However, this week we ended green while the market ended red. This was a better start to the month of May than most! While some stocks were down, we made strategic buys to grow positions and dividends this week. Let’s dive into it!

Portfolio Value

To date, I have invested $8,610 into the account, the total value of all positions plus any cash on hand is $8,814.78. That’s a gain of mere gain of $204.78 for a total return of 2.38%. The account is up $164.70 for the week which is a 1.90% gain. This week we made back more than half of the losses from last week.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is down -7.45% whereas our portfolio has an overall return of 2.38%! It’s tough seeing the portfolio come down from highs just a few weeks ago, but it is good that we are still beating the market by nearly a 10% difference.

We added $182 in cash to the account this week. The stock purchases made with this will be broken out below.

Portfolio

Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

This week our annual dividend income increased by $7 at a yield of 3.94%.For my portfolio, its dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner.

Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. In order to combat that, I have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.

Dividends

This week we received two dividends. $6.17 from AT&T (T) and $2.59 from Verizon (VZ).

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested.

Dividends received for 2022: $113.99

Portfolio’s Lifetime Dividends: $136.91

Trades

Below is a breakdown of my trades this week.

  • May 2nd
    • Aflac (AFL) – added 1 share at $57.18
    • AT&T (T) – added 0.320519 shares at $19.25 ($6.17 dividend reinvested)
  • May 3rd
    • Starbucks (SBUX) – added 0.25 shares at $73.80
  • May 4th
    • Intel (INTC) – added 0.5 shares at $45.04
    • SCHD – added 0.129943 shares at $76.96 (recurring investment)
    • XYLD – added 0.21198 shares at $47.17 (recurring investment)
  • May 5th
    • Intel (INTC) – added 0.5 shares at $45.70
    • Starbucks (SBUX) – added 0.25 shares at $78.24
  • May 6th
    • Starbucks (SBUX) – added 0.1 shares at $76.90
    • Texas Instruments (TXN) – added 0.14 shares at $169.29

Summary

That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week and stay safe!

Categories
Dividend Stocks Dividends Due Diligence Earnings

Comcast (CMCSA) – Q1 2022 Earnings Beat But Muddled Broadband Growth Leaves Investors Wanting

Comcast (CMCSA) reported earnings before the bell on 4/28/2022. The company performed fairly well, however the stock dipped more than 5% after the earnings call.

Here are the key points:

• EPS: 86 cents per share adjusted vs. 80 cents per share unadjusted, average analyst estimate was 81 cents.

• Revenue: $31 billion versus estimates of $30.5 billion

• High Speed Broadband Customers: 262,000 vs. 229,000 new customers. However, 80,000 of the 262,000 were free subscribers from COVID relief connection programs.

Now let’s go into more detail about the call.

On the earnings call Brian Roberts, CEO and Chairman, provided a statement that provides high level insight into the company’s performance for the quarter: “2022 is off to a great start. Each of our businesses posted healthy growth in adjusted EBITDA, contributing to a double-digit increase in adjusted EPS as well as significant free cash flow generation in the quarter. And we achieved all of this while continuing to invest in our businesses for the long term, while also increasing our return of capital to shareholders.”

As you can see in the image above, revenue is up 14%, adjusted EBITDA increases 8.8%, and adjusted EPS increases 13.2%. Through the quarter, Comcast returned $4.2 billion to shareholders through $1.2 billion in dividend payments and $3 billion in share repurchases.

The NBCUniversal segment (see above), which includes their media, studios, and theme parks, had posted total revenue of $10.3 billion and an adjusted EBITDA of $1.6 billion, 46.6% and 7.4% respective increases on the first quarter of 2021.

Roughly 21% of media revenue was broken out as incremental revenue from the 2022 Beijing Olympics and the NFL’s Superbowl. The organic 6.9% increase in media revenue was attributed to higher advertising and distribution revenue.

Comcast’s streaming service Peacock is showing good growth. Their platform added 4 million paid subscribers, bringing the total to 13 million. Total active monthly users rose to 28 million from 24.5 million previously. With 13 million paid subscribers and 15 million active free users, Peacock is uniquely positioned in the market. Their platform is a natural extension of their existing video business with 2 revenues streams (subscribers and paid advertising to free users). Peacock has seen a 25% increase in hours of engagement year over year which shows that the increase in users, which is partly driven by events like the Olympics and the Superbowl, is being retained.

More modest growth for Peacock is to be expected as events slow down in the next two quarters. Once sporting events in the fourth quarter kick off (Sunday night football, premier league, and the world cup), Peacock activity should show more momentum. Studio revenues should increase as well with titles like Minions, Jurassic World Dominion, and the Vampire Academy series kicking off.

The cable communications segment (see above) showed modest growth, with revenues gowning 4.7% to $16.5 billion and adjusted EBITDA growing 6.5% to $7.2 billion.

This growth was driven by increases in broadband, business services, wireless, and advertising revenues. For the quarter, total broadband customers increased by 262,000 which beat the 229,000 average analyst estimate.

However, about 80,000 of those subscribers were free Internet Essential customers. Without those subscribers being included, the actual number of paying customers added to the business is actually around 180,000 which falls far short of the analyst estimate.

On the call, when asked about this, Michael Cavanagh CFO stated that this transitional impact in the net subs added is a result of the ending of the COVID programs where used could come into the service for free. During COVID, they were conservative with how they counted these free subs, however, after ending the program in the end of 2021 only about a third of those customers transitioned to being paying customers. Michael Cavanagh said that there won’t be any ongoing roll forward into the second quarter, therefore he doesn’t think Comcast will experience any negative impact going forward as a result of ending the program. It is essentially cleaning itself out this quarter.

With the performance beating most estimates by a modest amount and the muddled growth of broadband subscribers working itself out through the termination of the COVID relief connection program, I think the dip in stock price is unreasonable. If the second quarter earnings report shows that the free users have been cleaned up and broadband growth continues to trend in the right direction, this dip will have been an overreaction by the market and a great time to add to this dividend paying position at a current yield of 2.6%.

Categories
Dividend Stocks Dividends Portfolio Stock Market

Dividend Portfolio: 4/14/2022 Week in Review

Photo by Pixabay on Pexels.com

Welcome back to Dividend Dollars and our weekly review! And boy what a week it was! We made some adjustments to our energy holdings and crossed our first $100 in dividends!

We lost a day of trading this week due to Good Friday. Having the day off was a good ending to a bad week! The S&P lost 2.1%, Nasdaq 2.6%, the Dow was down 0.8%, with Russell making the only gain of 0.5%.

The information technology, health care, financials, and communication services sectors were the S&P’s biggest losers. Downward movement in the information technology and communication sectors were linked to moves in the Treasury market. The 10-year yield went up 12 basis points this week despite economic discussion that inflation was peaking. That discussion was followed by two days of declining rates following big CPI and PPI numbers for March.

The financial sector was down particularly because of earnings missed by JPM and WFC. Other banks for the most part surpassed expectations.

Airline stocks showed strength this week with AAL raising their Q1 revenue guidance and DAL with earnings that beat expectations. JETS also went up 8% this week.

Aside from airlines doing well, the materials, industrials, energy, and consumer staples sectors of the S&P were positive with gains all under 1%.

Now let’s move on to reviewing our portfolio’s performance for the week.

Portfolio Value

To date, I have invested $8,020 into the account, the total value of all positions plus any cash on hand is $8,494.4. That’s a gain of $474.42 for a total return of 5.92%. The account is down $48.08 for the week which is a 0.56% loss.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is down -1.41% whereas our portfolio has an overall return of 5.92%! Let’s keep up this good progress with smart adds to the portfolio.

We added $120 in cash to the account this week. The stock purchases made with this will be broken out below.

Portfolio

Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

This week our annual dividend income increased by $20. My portfolio’s dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner.

Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. In order to combat that, I have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.

Dividends

This week we received two dividends. $13.77 from UWMC and $3.17 from BBY

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested (except for BBY, that will be reinvested on Monday).

Dividends received for 2022: $90.19

Portfolio’s Lifetime Dividends: $113.11

Trades

Below is a breakdown of my trades this week.

On Wednesday I did some restructuring of the portfolio. I sold my whole position in EOG and spun a majority of those into a new utilities position in AY. There are a couple of reasons I did this. The IPCC report came out this week and is pretty grim about the future of our planet. It makes it clear that the devastating impacts of a climate crisis are occurring and the opportunity to curb terrible outcomes are already slipping through our fingers. The report says that greenhouse gas emissions must peak by 2025 to limit global warming close to 1.5 degrees Celsius as targeted by the Paris Agreement. Mitigating climate change continues to a growing and ever important focus for governments, business, and people.

Though the Ukraine conflict is where the world’s attention is at right now. I still believe that oil will be a good business model in the short term, thus I am continuing to hold CVX, but I believe that adoption of more “green” policies are inevitable and will come sooner or later. When this happens, oil companies will come under pressure and renewable energy companies will benefit. It will be a long transition, possibly over decades. But I would rather build positions on renewable energy companies now instead of later. For that reason, I sold my EOG position and rolled it into a new position in AY, a sustainable infrastructure company with a majority of its business in renewable energy assets (solar, water, and wind).

  • April 11th
    • T – added 2 shares at 19.59
    • SMHB – added 1 share at $10.99
    • UWMC – added 3.251476 shares through $13.77 dividend reinvested
  • April 12th
    • UWMC – added 3 shares at $3.97
    • MMM – added 0.1 shares at $148.70
  • April 13th
    • EOG – sold position (3.113613 shares) for a 45% gain
    • AY – new position, bought 6 shares at $33.56
    • BAC – added 2 shares at $38.86
    • T – added 5 shares at $19.44
    • SCHD – added 0.126727 shares at $78.91 (recurring investment)
    • XYLD – added 0.201191 shares at $49.70 (recurring investment)
  • April 14th
    • SBUX – added 0.25 shares at $79.68
    • UWMC – added 3 shares at $3.90
    • SMHB – added 1 share at $10.94

Summary

That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week and have a happy and safe Easter!

Categories
Dividend Stocks Dividends Portfolio

Dividend Portfolio: 4/8/2022 Week in Review

Welcome back to Dividend Dollars and our weekly review!

March FOMC minutes came out this week and confirmed expected balance sheet reductions and future rate increases possibly being 50 basis point jumps or more. Following this, Treasury yields of all timeframes jumped with the 10 year moving up 34 basis points and the 2 year moving up 10 basis points. Longer term notes were pushed even higher by the March ISM Non-Manufacturing Index which showed the Prices Paid Index hit its second highest reading ever.

Essentially, the Fed news harkens concerns about the central bank potentially making policy mistakes that could sent the economy into recession, which would lower earnings prospects and valuations. Growth stock valuations were pressured by this and rapid rise in rates this week.

Having paid very close attention to rates this week, I had a good conversation with @ScoreBDInvestor on twitter who ended up doing a great write up about TIPX and treasury inflation protected securities. It might be timely to read into and consider adding it as an inflationary hedge.

At the end of it all, the S&P and Nasdaq headed for their first weekly loses in four weeks. The DJIA lost 0.3%, NASDAQ 3.9%, Russell 4.6%, and the S&P 1.3% with 5 of the 11 sectors making gains. Biggest losers included information technology, consumer discretionary, and communication services while the biggest gainers were the energy, healthcare, and consumer staples sectors.

Now let’s move on to reviewing our portfolio’s performance for the week.

Portfolio Value

To date, I have invested $7,900 into the account, the total value of all positions plus any cash on hand is $8,449.48. That’s a gain of $549.81 for a total return of 6.96%. The account is up $8.90 for the week which is a 0.11% gain.

We started building this portfolio on 9/24/2021 and when compared to the S&P 500 we are outperforming the market so far! Within that same timeframe, the S&P 500 is up 0.74% whereas our portfolio has an overall return of 6.96%! Let’s keep up this good progress with smart adds to the portfolio.

We added $120 in cash to the account this week. The stock purchases made with this will be broken out below.

Portfolio

Above is a dashboard of the portfolio that tracks annual dividend income, yield, beta, dividend growth, and more.

Below is a table of everything we are invested in so far. There you can see my number of shares, shares bought through dividend reinvestments, average cost, gains, and more. The tickers in green are positions that I bought shares in this week.

This week our annual dividend income increased by $9. My portfolio’s dividend yield may be just slightly higher than what you will see in other portfolios, however that is strategic per my time horizon. I am in my 20s and am just starting off this investment journey, so a higher dividend yield gives me greater cash flow now to reinvest which helps me realize the benefits of compounding sooner.

Our beta usually hovers right around the mid 0.6s which is good, especially in times of uneasiness. It means my portfolio won’t dip as much as the rest of the market on red days, however, it does go the other way around and I won’t have as much green on the good days. Therefore, it is good to watch your beta in terms of cyclicity. View the chart above to see the performance of my portfolio versus the S&P 500, notice how my portfolio’s green days are not as substantial as the S&P’s but neither are my red days, that is beta at work. My beta so far has led to better returns than the market since beginning this portfolio, however, on rally weeks I underperform. In order to combat that, I have started adding to a levered position to raise my beta. I would like to see it in the 0.8s.

Dividends

This week we did not receive any dividends, however a handful of positions did announce dividends in the upcoming month or two, so our below dividend graph is updated for those.

In my portfolio, all positions have dividend reinvestment enabled. I don’t hold onto the dividend, I don’t try to time the reinvestment, I just let my broker do it automatically. All dividends were reinvested (except for KO, that will be reinvested on Monday).

Dividends received for 2022: $73.25

Portfolio’s Lifetime Dividends: $96.17

Trades

Here’s the breakdown of the trades I made this week (it was a light week):

  • April 4th
    • SBUX – added 0.5 shares at $86.62
    • SMHB – added 0.5 shares at $11.64
    • UWMC – sold covered call $5 4/14 for a $2 premium
  • April 5th
    • SMHB – added 1 share at $11.48
  • April 6th
    • SBUX – added 0.25 shares at $82.68
    • SCHD – added 0.126568 shares at $79.01 (recurring investment)
    • XYLD – added 0.202268 shares at $49.44 (recurring investment)
    • SMHB – add 1 share at $11.25
  • April 7th
    • SMHB – added 1 share at $10.94

Summary

That is it for the update this week. Let’s kill it next week. Stay patient and be ready to buy income producing assets at a discount!

Let me know what you think of the progress so far, share with me your progress and questions, interact with me on twitter and Instagram using the links below!

Thank you for reading! See you next week!