Rose’s Income Garden-12 December Dividend Raises, Green Year End Results

Rose’s Income Garden – RIG

Staying green, nice and green, thank you Mr. Market allowing RIG to be a winner in 2022.

December Performance

Most everyone had hopes for a Santa Claus rally which did not happen. December was not pleasing and this is what did happen:

(SPY) fell -5.69%

The Dow was down -4%

Nasdaq even more at -9%.

RIG fell -1.84%

The full year saw Dow down -8.8%, S&P – 19.4% and the poor Nasdaq -33.1%. Ouch!

RIG was up 2.83% to outperform SPY by +20.98% to end the year.

Below you can see the FY 2022 results of Macro Trading Factory‘s (“MTF”) two (and only two!) portfolios – Funds Macro Portfolio (“FMP”) and Rose’s Income Garden (“RIG”).

December Dividend Income

The RIG income was up 5.5% from December 2021 and for the full year up 28.8%. The huge rise was primarily from the shipping stocks which are not expected to offer as large dividends in 2023.

41 out of 80 companies/ or ~51% of the portfolio paid; as expected along with getting 12 raises. The stocks with the raise have the information in bold in the chart and comments. Note there are 4 high yield companies that pay monthly are noted as such in the comments too. The 2 industrial sector shipping stocks offer varied dividend payments which were lower and mentioned. Even though lower it was not disappointing as they were still very high payments and welcome.

The chart below uses the following abbreviations:

Date Rec’d = Date payment received.

Div/sh = Dividend per share paid / received.

Yearly $ Div = Current 2022 yearly estimated known dividend payment.

Div % Yield = dividend yield calculated using the current shown price and yearly known dividend.

Curr Price is for the end of the day market price Dec 31st.

	Stock	2022	div/sh	Yearly	Div%	Other Dividend	Current
Ticker	Name	date		$ Div	Yield	Comments	Price
(PFLT)	PennantPark Float	1	0.095	1.14	10.38%	Monthly Pay	10.98
(ENB)	Enbridge	1	0.649	2.61	6.68%	Canada exch rate	39.1
(V)	Visa	1	0.45	1.8	0.87%	Raise from .375	207.76
(WEC)	WEC Energy	1	0.7275	2.91	3.10%		93.76
(SLRC)	SLR Investment	1	0.1367	1.64	11.79%	Monthly Pay	13.91
(CMI)	Cummins	1	1.57	6.28	2.59%		242.29
(MAC)	Macerich	2	0.17	0.6	5.33%	Raise from .15	11.26
(LYB)	LyondellBasell	5	1.19	4.76	5.73%	excludes spec pay	83.03
(SO)	Southern Co	6	0.68	2.7	3.78%		71.41
(JNJ)	Johnson & Johnson	6	1.13	4.52	2.56%		176.65
(ZIM)	ZIM Integrated Shipg	7	2.95	27.55	160.27%	varies/25% tax	17.19
(AMGN)	Amgen	8	1.94	7.76	2.95%		262.64
(XOM)	Exxon Mobil	9	0.91	3.55	3.22%	Raise from .88	110.3
(TGT)	Target	10	1.08	4.32	2.90%		149.04
(WBA)	Walgreens BA	12	0.48	1.915	5.13%		37.36
(SBLK)	Star Bulk Carriers	12	1.2	6.5	33.80%	varies: was 1.65	19.23
(DNP)	DNP Select Inc Fund	12	0.065	0.78	6.93%	Monthly Pay	11.25
(CVX)	Chevron	12	1.42	5.68	3.16%	raise due next	179.49
(PTMN)	Portman Ridge	13	0.67	2.68	11.65%	Raise from .63	23
(MGEE)	MGE Energy	15	0.4075	1.63	2.32%		70.4
(HSY)	Hershey	15	1.036	4.144	1.79%		231.57
(TAP)	Molson Coors Brew	15	0.38	1.52	2.95%		51.52
(HD)	Home Depot	15	1.9	7.6	2.41%	raise due next	315.86
STWD bd	Starwood bond	15	2.375	4.75	4.90%	bond pays 2x/yr	97
(MCD)	McDonald’s	15	1.52	5.66	2.15%	Raise from 1.38	263.53
(GOLD)	Barrick Gold	15	0.1	0.6	3.49%		17.18
(VTRS)	Viatris	16	0.12	0.48	4.31%	raise due next	11.13
(DUK)	Duke	16	1.005	4.02	3.90%		102.99
(SHEL)	Shell plc	19	0.5	1.98	3.48%		56.95
(D)	Dominion Energy	20	0.6675	2.67	4.35%	raise due next	61.32
(TRTN)	Triton	22	0.7	2.65	3.85%	Raise from 0.65	68.78
(NEM)	Newmont Mining	29	0.55	2.2	4.66%		47.2
(UNP)	Union Pacific	29	1.3	5.2	2.51%		207.07
(ARCC)	Ares Capital	29	0.48	1.8	9.75%	Raise from 0.43	18.47
ARCC/S	Special Ares Cap	29	0.03			3c Spec =51c total
(AVGO)	Broadcom	30	4.6	16.9	3.02%	Raise from 4.1	559.13
(KHC)	Kraft Heinz Co	30	0.4	1.6	3.93%	no change	40.71
(LMT)	Lockheed Martin	23	3	11.4	2.34%	Raise from 2.80	486.49
(TCPC)	BlackRock TCP Cap	30	0.32	1.2	9.27%	Raise from 0.30	12.94
(SPG)	Simon Prop Grp	30	1.8	7	5.96%	Raise from 1.75	117.48
(NMFC)	New Mountain Fin	30	0.32	1.2	9.70%	Raise from 0.30	12.37
(ARDC)	Ares Dynamic Fund	30	0.1025	1.23	10.61%	Monthly Pay	11.59

Click to enlarge

Raises: 12

Visa (V) – 20% raise

Financial tech credit card servicer was founded in 1958 and headquartered in San Francisco, CA. S&P credit rating of AA- with 15 years of consecutive rising dividend payments. The low yield must accompany a nice large dividend growth rate which happened.

Macerich (MAC) – 13.3% raise

Retail REIT / real estate investment trust headquartered in Santa Monica, CA of successful quality regional shopping malls. No credit rating available. This is the first raise since it cut from retail problems during covid. This is a recovery work in progress that will most likely take a few more years.

Exxon (XOM) – 3.4% raise

Oil and gas integrated energy company operating in up and down stream and chemical segments. It was founded in 1870 and is headquartered in Irving, TX. S&P credit rating of AA- and has 40 years of consecutive rising dividend payments.

Portman Ridge Finance (PTMN) – 6.3% raise

Business development company, “BDC”, that offers loans of a broad range to numerous company types in almost all sectors. It is headquartered in New York, NY.

McDonald’s (MCD) – 10.1% raise

Consumer Staple/cyclical restaurant franchise company founded in 1940 and is headquartered in Chicago, IL. S&P BBB+ credit rating with 47 years of consecutive rising dividend payments.

Triton (TRTN) – 9.2% raise

Industrial sector company for leasing of containers for transportation companies internationally. S&P BBB- credit rating and has 7 years of consecutive rising dividend payments.

Ares Capital (ARCC) – 18.6% raise

The raise includes the regular and special payment. It is a business development company “BDC” that offers a broad range of loans to middle market companies in many sectors. S&P BBB- credit rating.

Broadcom (AVGO) – 12.2% raise

Technology semiconductor company incorporated in 2018 and headquartered in San Jose, CA. S&P BBB- credit rating with 12 years of consecutive rising dividend payments.

Lockheed Martin (LMT) – 7.1% raise

International security and aerospace company operating also in defensive type systems, missiles, and space operations. S&P credit rating of A- and has 19 years of consecutive rising dividend payments.

Blackrock TCP Capital (TCPC) – 1.6% raise

Business development company, “BDC”, that offers a broad range of loans to a varied broad spectrum market preferring those that desire an equity ownership stake. The dividend was cut in 2020 and is now getting a restart upwards with no promises. Headquartered in Santa Monica, CA.

Simon Property Group (SPG) – 2.8% raise

Retail real estate investment company “REIT” that owns internationally premier shopping and entertainment property. Headquartered in Indianapolis, IN. Its dividend was cut in 2020 due to covid retail issues. This is the 3rd raise for 2022 which = 9.1% total increase from $1.65 to start the year. More raises are suggested for 2023.

New Mountain Finance (NMFC) – 1.6% raise

Business development company, “BDC”, that offers a broad range of loans to a middle defensive high growth type market and seeks high ownership in its portfolio companies. Headquartered in New York, NY. The dividend was cut in 2020 and is showing positive signs for it to rise once again.

There are 11 companies with a dividend yield near or 7% or more including the monthly payers PFLT, SLRC, DNP, and ARDC. They all have been reliable with ARDC having raised its payment in August. This month was a nice surprise as some of the BDCs did raise dividends; always a big hoorah when it happens!

Future Income

Future income yield is estimated to continue near or above ~5% as 2023 begins with the final tally far away. The yield is still quite nice and welcomed even with a rising portfolio value, shipping stocks with unreliable lower income and more cash. The RIG yield goal is a minimum of 4% which is still being met, but I do admit I prefer nearer to 5%. Once the cash is utilized it will provide more income too. I see 2023 as exciting, interesting and an investment challenge that I am looking forward to and happy to pursue.

December Transactions

Sold – 2

Kraft Heinz Co.

(KHC) is a consumer defensive packaged food company that merged Kraft with Heinz in 2015. It is headquartered in Pittsburgh, PA and has a current S&P credit rating of BBB-. It is paying a 4% nice yield when the price is $40, which seems to be hitting a peak. It tested my patience for too long and with interest rates rising and not seeing rising earnings or dividends it became a drag to keep in the portfolio. Kraft was a legacy stock obtained years ago as a spinoff from owning shares of Philip Morris (PM). This is one I pretty much had high hopes for as Warren Buffet owns it. I know now he is not exactly one to copy for every stock, and I find I disagree with some of his choices such as this one, so I gave it the ole heave ho, which means “Good-bye!”

The chart below from Yahoo Finance shows its price movement for 2022.

FAST Graph for KHC

The following colors/ lines on the chart represent the following:

Black line = price

White line = dividend

Orange line = Graham average of usually 15 P/E “price/earnings” for most stocks.

Blue line = Normal P/E

Dashed or dotted lines are estimates only.

Green Area represents earnings.

Relatively flat 2% earnings for 2023, a bit more for 2024, but no expected dividend raise, which is not what I want for a dividend growth portfolio.

Note the normal P/E shown is 12.89x and it is selling at 15.07x.

Cash Flows

This next chart shows “OCF” / operating cash flows, which took a huge dip in 2022, and will not recover for many years. However, the flat level for the dividend does look safe.

Surprisingly, the price is above the normal (blue line) P/OCF ratio of 10.18x and sits at 12.74x. Normally for the last few years the price travels below the blue line, and for some reason it now seems overpriced so I sold.

Ontrak, Inc. Preferred – (OTRKP)

This is a healthcare artificial intelligence company that was incorporated in 2003 and is headquartered in Henderson, NV. It lingered nicely at a fair price level and did just take an awful turn down quickly. This investment for some reason I thought would turn around, but I was totally blind with hope. I did get one payment in Q1, so it was not a total loss for income, but a disaster as an investment.

The positive view is that I did not have a large amount, but it still hurts to reveal and even mention this horrible investment. I should have cut and run a long time before December. I will not look back, but now you know my worst investment of 2022. Ouch!

The great news is that RIG is diversified and can and will handle bad investment results, but I hate it when it happens. I will not wait this long again to sell and plan to have a better exit plan for any investment. There were no add ons in December, as I am waiting for 2023 to use the 12.6% cash reserve.

Summary and Conclusion

The goal of RIG is first and foremost income with retaining value very important too. Quality high credit rated and safe value line companies comprise the majority of the common stock and investments in it.

The Rose portfolio/ RIG continues to outperform SPY by double digits, has a 5% dividend income yield along with 12.6% cash.

The WTB/ Want To Buy/ list is current for all RIG positions with a “Buy under price” and “Strong Buy” prices, along with desired yield listed. The non-RIG stock picks also have those price targets and some DGR statistics, along with current 52 week high and low prices shown which are on continuous evaluation for purchasing if not by me, but perhaps for subscribers. I enjoy watching, evaluating and the hunt for great stocks to own as an ongoing pursuit for investing happiness.

For more information about MTF please see the last bullet point at the beginning of the article.

Happy Investing to All!