Rose’s Income Garden: Defensive Communications Sector Review: Dividend Income 4.7%

Rose’s Income Garden with High Yield Defensive Sector Communication Stocks:

	Value Line Safety Rating	Stock Ticker	Company Name	S&P Credit Rating	Current Market Price	2022 Dividend Estimate	Div % Yield
	2	(BCE)	BCE- Canada	BBB+	58.2	2.91	5.1%
	3	(VOD)	Vodafone	BBB	17.5	1.02	5.8%
	1	(VZ)	Verizon	BBB+	53.33	2.56	4.8%
	2	(T)	ATT	BBB	19.54	1.35	6.9%
	na	(WBD)	Discovery	na	24.00	0	0.0%

The above 4 telecom stocks, excluding the new spin off of WBD, all contribute nicely for income. Below is company information and some basic dividend information. Following that are a few statistics showing 52 week low/mid value and high prices for each along with analyst fair values/estimate prices.

BCE Inc

Formerly known as Bell Canada it incorporated in 1970 as Bell services including wire lines, wireless, Internet, media and TV services. It is headquartered in Verdun, QC, Canada.

Its BBB+ credit rating is great and on the higher side for telecom stocks and makes it very investable. The last dividend paid was $ 0.7285 on April 18^th, which would equal $2.91 yearly and means a 5% dividend yield at the price of $58.20. Foreign tax is removed in taxable accounts but is recoverable at tax time. No tax is removed in non-taxed accounts like a Roth or an IRA.

Vodafone

Vodafone Group Public Limited Company incorporated in 1984 and is headquartered in Newbury, UK. It offers mobile services in Europe and Internationally for calling, texting, fixed lines, broadband, TV and voice services. IoT or Internet of Things are value added services along with payment options “M-Pesa”, through an African partner also offering other money services and more recently entered into a strategic partnership with Open Fiber. It has an acceptable investment grade BBB credit rating.

Its earnings are looking great and estimated for double digits for the next few years. This could be a sleeper, and I am pleased to own it.

Dividend is paid twice yearly, which I dislike, but the $1.02 dividend equates to ~ 6% dividend yield, which I do like! Dec 17^th 2021 was the ex-date for a 52c dividend that was paid Feb 4, 2022. I anticipate a June ex-date for a payment in August. None of this is announced as yet, so it leaves some time to buy in for ~ a 50c dividend with no foreign tax removed.

Verizon

Formerly known as Bell Atlantic Corporation and changed to the Verizon name in June 2000. It incorporated in 1983 and is headquartered in New York, New York. It offers communications, technology, entertainment products, IoT and services to consumers, businesses, and governmental entities worldwide. The BBB+ quality credit rating matches with its 17 years of rising dividend payments. Current dividend is 64c quarterly, with a small, maybe 2%, expected raise for the end of the year. A dividend of $2.56 and the current price of $53.33 equals a 4.8% dividend yield.

AT&T Inc.

Formerly known as SBC Communications Inc. until 2005 when the name was changed to AT&T Inc., I have owned it through the name changes. It was incorporated in 1983 and is headquartered in Dallas, Texas. It had been a monopoly and known as The Bell System and was forced in 1982 to break up which is quite an interesting past history for T. It always has been known as an income stock and not really for growth much at all. It most recently spun off its worldwide media company Warner Bros / Discovery holdings and again now enjoys being just a communications company. On the spin off date of April 11th its price was ~$24, with WBD spin off price value equivalent of ~ $6 took it down to ~$18. For each share of T owned 0.24 shares of WBD was awarded, thus the lower value. The full 2022 dividend is $1.35, which includes the first quarter 52c dividend, but thereafter will be $0.2775 per quarter or $1.11 yearly, equaling a 6.1% yield which remains attractive and keeps it known for good income.

Warner Bros Discovery

Discovery is headquartered in NY, NY. It was spun off from ATT on April 11^th. This new company should do well, but it is hitting a brick wall with CNN+ being a nightmare streaming adventure for it. It will take time to see recovery for that portion. Glad to say the Discovery media channels is a wonderful component as is Warner Bros studio characters being very fanciful and appealing. It has no credit rating, no dividend and is just dead weight for now. I hope it will participate with a capital gain this year and maybe even a dividend. It is one to watch (pun intended).

Analyst Valuations with 52 week highs and lows

M* = Morning Star rating.

4 stars mean undervalued, 3 stars is near “FV” fair value.

VL = Value Line Safety rating.

1 is highly safe, 3 is medium and 5 is the lowest, thankfully everything is safe or better.

Now Price is for April 19th, 2022.

Stock	Company	Price	Price	Price	Now	M*	M*	Value	VL
Ticker	Name	LOW 52	Median	Hi 52	Price	Stars	FV	Line	Finance
BCE	BCE Inc	$46.22	$52.47	$58.72	57.95	3	53	2	B++
VOD	Vodafone Group	$14.53	$17.45	$20.36	17.23	4	25	3	B++
VZ	Verizon Comm	$49.69	$54.77	$59.85	53.64	4	59	1	A++
T	AT&T Inc.	$16.79	$21.31	$25.83	19.44	4	25	2	A
WBD	Discovery Inc	$21.66	$30.68	$39.70	23.88	4	40	na	na

The statistics /metrics indicate some undervaluation with VOD, VZ, T and even WBD. Surprisingly BCE is very much at an all time high price and is still only fair value to M*. I consider it over valued.

Yahoo Finance Analysts have the following suggested 1 year out price targets:

– BCE $53.92 : already there

– VOD $25 : long way to go

– VZ $60.64 : quite a way to go

– T $26.70 : Long long way to go and my fingers are crossed, legs too!

I provide my own Want To Buy prices at The Macro Trading Factory service and most recently added some non- Rose portfolio stock ideas with buy prices and hope to expand it with time.

Summary/ Conclusion

Defense is a good offense and many should have heard that with sports and other life adventures, but it does apply equally to investing.

I keep the defensive sectors of

– Consumer Staples– 13 stocks

– Healthcare – 9 stocks

– Utilities – 8 stocks

– Communications – 5 stocks

along with other defensive stocks

– Industrial – 2 stocks

– Real Estate- 3 stocks

These are maintained at a minimum 50% income. That goal has been slipping a bit, but as income is always changing, I have no doubt I will get back to that goal by the end of the year. Please see the chart below with showing the number of stocks “#Co” owned in each of the 11 sectors with the 41 defensive ones mentioned above appearing first with the sector in bold print. The remaining sectors include the remaining 46 stocks as shown below.

Defense	#Co		% PV	% 22 Inc
	13	Cons-Staples
	9	Healthcare
	5	Comm-Tele	5.9%	6.6%
	8	Utility
	1	Fixed income bond
	2	Industrial-Def
	3	RE-Hc-Def
			58.90%	49.30%
	4	Tech
	2	Cons-Discretionary
	8	Industrial
	7	Material
	11	Finance-BDC
	6	Energy
	6	RE-eReit
	2	Fixed Income-Pref
Total	87		95.9%	100.0%
		Cash/O	4.1%
			100.0%	100.0%

Note I show the fixed income bond as defensive and do not consider fixed income preferred shares as such, at least for now.

My last article here discusses the amazing rising portfolio value and especially the excellent rising dividend income.

Rose’s Income Garden Portfolio “RIG” is outperforming S&P by 15+% and still has an amazing 4.7% dividend yield too! It is found at The Macro Trading Factory service along with The amazing Macro Teller and his Funds Macro Portfolio that is “macro” in nature offering funds that need minimum attention and is even out performing my RIG portfolio as of last week:

Funds Macro Portfolio (“FMP”) is up 13.6% YTD, outperforming $SPY by 20.7%

Rose’s Income Garden (“RIG”) is up 8.2% YTD, outperforming $SPY by 15.0%

Come visit both of us at the service and chat.

Happy Investing !!