Simply stock trading

Finance, Taxes, Banking, Insurance and Retirement
104

GIS is on my buy list, has been for weeks months.

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Didn’t pull the trigger, yet, recently – their earnings outlook could look nicer, pointing more upwards at least two years out or so. Anyway, I’ve bought them at higher prices so should probably average down as long as my position is not full yet.

Other seemingly even prettier brides turned my head recently, though. Smucker, Keurig and Community Healthcare Trust were the promiscous cuties I bought into a bit more this week:

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Look at those big … uh, dividends!

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Dividend CAGR is on fire!

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Sweet, sweet dividend – love it!

Amen!

I was already scared when their first cockroach showed up – Hindenburg research report released in August 2024 about balance sheet manipulation – and wasn’t very surprised when the second cockroach surfaced (EY withdrawing as their auditor). 3rd ‘roach was the DOJ looking at them in October 2024 and the last one just now … good ol’ smuggling! In the age of AI!!
Cockroach marriage in heaven, I guess … :wink:

To quote Warren:

“In the world of business, bad news oracles are rarely soliloquists. You will find that there is almost never just one cockroach in the kitchen.”

Anyway, might work fine for a speculative portfolio, but I’m afraid no ('Roach Motel) room in my dividend (growth) approach even though I am fascinated by those companies and their (expected) growth in earnings.

105

Actually that was already the second scandal. The best buying point was after the first scandal and before the second. Of course every scandal or just before would be a nice selling point. Today the loss is like 33%. How could I make that much money with such a stock? Don’t know, have to ask the capt’n. No idea how this drama continues, I suppose after putting up a scapegoat it is time for the CEO to step down. The day he steps down the stock will explode again I suppose. Or it just goes to zero, could be taken out of the stock market in the blink of an eye. I just lean back and watch, was one of my most successful trades even if I lose everything on the leftover position.

For the gambling strategy today the rent for Arcelor Mittal was due, I sold some with 51% gain after one year. Welcome to the second year.

My capt’n still has appetite for oil stocks, this time again a shovel seller. I bought me some RPC Inc. (RES) today.

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106

Thoughts on SCHD’s annual reconstruction? At first glance I thought it’s odd to remove ABBV and add ABT because they are two companies I know, and incidentally have done plenty of work for, and I’d personally never take ABT over ABBV, but it’s a mechanical index.

Further looking towards energy they seem to have cut the flowers that drove its growth this year, also reminding me of the reason I don’t understand pure value funds: I always wondered what sense does it make to let go of good performers right on the cusp of their performance peaking, but again it’s a mechanical index so it has to follow its rules.

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107

The energy and downstream chemicals are currently at peak profitability.

If the Iran war is quick and everything is magically fixed, this would be a great rotation. If the war drags on, this would be a huge loss of profits and dividends.

I’d certainly be holding (if not accumulating): VLO, HAL, CF, LYB, OVV.

The upside risk seems to far outweigh any downside risk.

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108

Yeah, damn, my thoughts too when I wrote “cutting the flowers”.

109

Checking my portfolio, energy (excl. midstream and uranium) is the biggest category holding at around 16%. If you add in these and associated stuff like oilfield services, it goes up to 33%.

Aggregation MV %
Energy 15.6%
SaaS 13.9%
Precious Metals 9.1%
MLPs 8.8%
Tobacco 8.6%
Commodities 6.7%
Uranium 5.7%
Turnaround 5.4%
REIT 5.4%
Healthcare 5.0%
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110

FWIW on SCHD booted positions that overlap with my stock picks:

  • Cisco: I trimmed my position somewhat in Nov 25 as the stock became a little overvalued, probably due to AI euphoria.
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    IMO still a fine company, just a little too expensive right now given its expected earnings growth.
  • AbbVie: I also trimmed my position somewhat in Nov 25 as the stock was a little overvalued. Only slightly, though, considering the earnings for this fiscal year.
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    IMO a fine company, and fairly valued. Wouldn’t sell more at this level, wouldn’t yet buy at this level.
  • Amcor: Initiated my position just at the end of last year.
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    Somewhat boring packaging company – their operative headquarter is within bicycling distance from where I live. They’re a little high on debt, but the dividend is juicy and Free Cash Flow (FCF) covers it.
    It’s currently on my buy list and they paid me their first dividend exacly a week ago. :money_bag:
  • LyondellBasell Industries: sold my position (at a loss) after they cut their dividend last year.
    Couldn’t agree more with SCHD … :wink:
  • Unum: Added to my position as recently as the end of 2025.
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    This company is still undervalued and is growing its dividend at a nice clip. The yield might be low’ish, but I would never sell at its current valuation.
  • Northwest Bancshares: they’ve been on my opportunistic sell list for about a year now because they don’t grow their dividend.
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    Haven’t sold because their yield is still very nice.
  • Valero: rose sharphly recently, but not yet overvalued IMO.
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    I’m tempted to trim it a bit to take some profit off the table.
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111

SCHD is purely mechanical. I derive some of their rules indirectly as when looking for new entries I start with the U.S. Dividend 100 Index. But then I have other very different rules. It is more difficult to get into my dividend portfolio and it is more difficult to get out of it too…

Cisco for example is at “hold” for overvaluation in the second quarter. However, the last yearly data was still OK.

My rules do not sell even if the stock is on “sell” when they are still in the better half of momentum. That is the case at the moment for Broadcomm, Cummins and Caterpillar. All big providers to the portfolio performance.

To repeat, I do only add to positions that are on “buy” and that are worth less than 4% of portfolio value.

On “buy” I have the following symbols: GIS, MET, ABBV, CNA, PFG, IBM, O, MO, T, F, GILD, MRK, HST, VTRS, LMT and JNJ. But at the moment only GIS and F are worth less than 4% of my portfolio.

On hold I have EMR, Q, CSCO, PRU, APAM and DD.

On sell I have CMI, CAT and AVGO, but none can be sold due to good performance / momentum.

Yep, they helped a lot. My capt’n made me buy a lot in the gamble strategy, 13 stocks are from the oil sector and two from the chemicals industry. 15 of 38 is a lot. That may explain the YTD performance of 21.32% there. In the dividend strategy it is only 2.56%, not one single oil stock made it there, too risky. Anyhow, the indices are all in the red for this year…

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112

BTW: if anybody is interested in a fine set of mechanical rules, here is the complete rules set of all of the Dow Jones Dividend Indices:

https://www.spglobal.com/spdji/en/methodology/article/dow-jones-dividend-indices-methodology/

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113

And for newly initiated SCHD positions that overlap with my stock picks:

  • Procter & Gamble: sold my (tiny) position in January 2026. Had acquired it in April 2020.
    Great company, obviously, almost always overvalued. Just didn’t do enough for my dividend growth portfolio.
    Not a buy at its current valuation, IMO.
  • Qualcomm: I’ve owned the company since 2020 and could probably be adding at this valuation.
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    It has a nice dividend CAGR, but I’m such a tech skeptic … sigh!
    Probably a buy at its current valuation.
  • Comcast: I have a full position.
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    Pays a nice dividend with a nice dividend CAGR as well. Now that they’ve split off their cable networks they might even appreciate in price someday …
    The best thing about this company is that they own Universal Pictures, though: my neighbour works for them, which gives me infinite pleasure, knowing she works for me and pays me a juicy dividend every quarter. :wink:
    Definitely a buy at its current valuation.
  • Old Republic International: I initiated my position on March 22 2020, no less.
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    They keep paying special dividends, which is nice.
    Probably a buy at its current valuation.
  • Federal Agricultural Mortgage Corp: Well, I initiated my position in Sep 25 and added as recently as in Feb 26.
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    It’s on my buy list.
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114

I think my dividend portfolio is a bit special. I don’t care about dividends, only about total performance. But dividend paying stocks are usually less risky. That is the main reason I invest there.

Dividend under 2% is only a sell reason if the company did not purchase own stock to reach to >2%. Purchasing own stock is better tax wise but gives an unneeded advantage to management for holding stock options.

I do that strategy since 13 years with some changes in 2020 and do (or did) live off it. “Did” because I get AHV since October and my gambling portfolio took over in value, so I get my spending money from there now.

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115

I have recently added MCK to my portfolio based on the free cash flow that they have and the service that they offer (logistics of drugs in the US and Canada) which is great for smaller pharma/biotech companies and I foresee them also benefiting from the future where Chinese Biotech companies will enter the US market and do not want to establish their own distribution system.

Beside that I want to diversify away from the us as my current US exposer is around 56% and I would like to bring it more towards 50%. Or maybe this happens naturally now with the heavy loss of my current positions :man_facepalming:

Are there any recommendations for established growers with a solid dividend CAGR?

PS: @cubanpete and @Your_Full_Name great to read you again

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116

MCK has been long on my list, but it always commanded a premium valuation that me as a stupid cheapskate didn’t pay. Of course, when I started, the share price was way under $200 today it is between $800 and $900. :man_facepalming:

117

I have bought above 900$ (I think around 920$ or something) so pretty sure that was the ATH which will not be seen for several years now :blush:

118

MCK would not make it into my divi portfolio, EV/FCF is bigger 34, 39 for last 3 quarters. However there seems to have been an acquisition of 3.4 billions, would have to check into that before deciding.

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119

Indeed!

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120

I bought McKesson into my son’s portfolio (where dividends don’t matter or are even shunned) back when was still undervalued.

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Looks overvalued now, but that earnings graph and trajectory are just a beauty. Look at that: twenty years of growing earnings! Grown at almost 15% p.a. for the past 20 years.

An anagram of MCK is MKC which I’ve kept thinking of for years already almost every time that I buy spices: McCormick.

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It’s still a little expensive, but one can always hope.

Did a quick (FASTgraphs) pass through my stock picks and found these undervalued growers with a solid dividend CAGR:

Some growers in my portfolio with a solid dividend CAGR that aren’t undervalued: ABBV, AMGN, AVGO, BK, CME, CMI, LOW, UBSG (!),

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121

In these interesting times, I found an ETF with the best name: CRAK.

This is named after the crack spread, which is the difference between the price of the output (refined fuels) and the cost of the input (crude oil).

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122

This almost cracked me up. :wink:

Now I finally understand why you emphasize – what do you call it again? Ah, right, the market dividend![$] – so much. It’s (at selling time) cash flow for consumption, too, the way you look at it, I suppose?

I remain (mostly) in the dividend-actually-paid-out camp. Even if I understand that share buybacks are better tax wise and capital gains aren’t taxed, either. I just remain more skeptical about the capital allocation capabilities of “upper management” with cash flow not being paid out at a reasonable level. :wink:
I like dividend payout ratios not too high, but also not too low.

$ For the uninitiated and mere mortals among us: “capital gains” is what them poors call it.
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123

I’m deep in debt, my best yield (and sleeping pill) is paying up debt.

Anyway…this ticked my interest today. The idea of drilling a well to get hydrogen gas from the underground sounds a bit weird even within the geoscience community. The hydrogen happens to be dissolved in old groundwater, water has to be pumped and hydrogen separated from water… :thinking:

But, this is far from becoming a money maker. The resource finding is in France, in the Grand-Est region where people is not happy with coal becoming a villain, and de-industrialization in general. Also, there’s simply no regulations about who owns the resource, and how to protect the environment. Commercially, how to monetize once it’s in a tank in the surface is a big open question. Oh, this is the Wild West.

Anyway, this is the only public company involved in white hydrogen exploration in Lorraine: FDE listed Euronext. The press release from yesterday:

Today is payday, I buy 1 stock for fun. Someone has to develop the know-how about this geological surprise :slight_smile: