JuSun
RIG = Rose’s Income Garden
Rose’s Income Garden (“RIG”) is a defensive income-quality value-built portfolio with 89 stocks residing in all 11 sectors. It is a part of the service the Macro Trading Factory, a macro-driven service, led by The Macro Teller and RoseNose. The service offers two portfolios: “Funds Macro Portfolio,” “FMP” and “Rose’s Income Garden;” both aim to outperform the SPY on a risk-adjusted basis, in a relaxed manner.
RIG contains mostly investment-grade common stock but also has high yield (“HY”) business development companies (“BDCs”) and real estate investments. The goal is to maintain 50% of the income from defensive sectors/ stocks and to keep a minimum dividend income yield of 4%.
JULY
July was a very positive month for the market and the major indexes as follows:
NASDAQ up ~12%
S&P up 9.14%
DOW up ~6.6%
with RIG following up 2.78%….
Year To Date
YTD, however, the indexes are still down as follows:
NASDAQ -20%
DOW -9.6%
S&P -12.64%
with RIG, however, up and I do love mentioning that RIG is up 3.07%.
…and the FMP from The Macro Teller is up 2.2%.
RIG Portfolio Income
July dividends were a Jubilee, with 1 company, Kenon Holdings Ltd. (KEN), providing a huge unexpected jackpot-type payment. This I know is a 1x event and will not continue. Without KEN, the income would have been almost exactly the same.
25 companies paid, of which 5 pay monthly, and there were 2 extra special payments. The raises or special payments have the stock ticker in bold along with discussion in the comments.
The chart below reveals the payments by date received with abbreviations used as follows:
Div/ sh = Dividend per share paid.
Yearly $ Div = Current yearly estimated known dividend payment
Div % Yield = dividend yield calculated using the current shown price and yearly suggested dividend
Current $ Price is for the end of the day market price Aug 2nd.
| 2022 | div/sh | $ Yearly | Div % | Other Dividend | Current | |
| Ticker | date | Dividend | Yield | Comments | Price | |
| (PFLT) | 1 | 0.095 | 1.14 | 8.76% | Monthly Pay | 13.02 |
| (PNNT) | 1 | 0.145 | 0.58 | 8.80% | 6.59 | |
| (GPC) | 1 | 0.895 | 3.58 | 2.37% | 150.76 | |
| (KO) | 1 | 0.44 | 1.76 | 2.77% | 63.64 | |
| (SLRC) | 5 | 0.1367 | 1.64 | 11.48% | Monthly Pay | 14.29 |
| (KMB) | 5 | 1.16 | 4.64 | 3.49% | 133 | |
| (FSK) | 5 | 0.68 | 2.4 | 11.08% | 5c Raise from .63 | 21.66 |
| (KEN) | 5 | 10.25 | 13.75 | 31.92% | Raise /Special | 43.08 |
| (MRK) | 8 | 0.69 | 2.76 | 3.15% | 87.61 | |
| (DNP) | 11 | 0.065 | 0.78 | 6.87% | Monthly Pay | 11.35 |
| (MO) | 11 | 0.9 | 3.6 | 8.21% | Raise due next | 43.83 |
| (MPW) | 14 | 0.29 | 1.16 | 6.86% | 16.9 | |
| (MDLZ) | 14 | 0.35 | 1.43 | 2.21% | 64.76 | |
| (WPC) | 15 | 1.059 | 4.24 | 4.90% | Raise from 1.057 | 86.48 |
| (SEAL-b) | 15 | 0.5313 | 2.125 | 8.32% | fixed preferred | 25.55 |
| (PM) | 15 | 1.25 | 5 | 5.07% | Raise due next | 98.65 |
| (CGBD) | 15 | 0.32 | 1.51 | 11.12% | regular payment | 13.58 |
| 15 | 0.08 | 8c special pay | ||||
| (MTBCP) | 15 | 0.2292 | 2.75 | 10.35% | Monthly Pay | 26.58 |
| (BCE) | 15 | 0.7133 | 2.87 | 5.77% | Canada exch rate | 49.78 |
| (STOR) | 15 | 0.385 | 1.54 | 5.37% | 28.69 | |
| (XEL) | 20 | 0.4875 | 1.95 | 2.65% | 73.45 | |
| (FMC) | 21 | 0.53 | 2.12 | 1.97% | 107.5 | |
| (CSCO) | 27 | 0.38 | 1.52 | 3.38% | 44.92 | |
| (ARDC) | 29 | 0.0975 | 1.17 | 8.92% | Monthly Pay | 13.11 |
| (RC) | 29 | 0.42 | 1.68 | 12.45% | 13.49 |
Raises and Specials
– FSK
FS KKR Capital, a BDC, has a basic 60c normal payment. Lately it has been issuing a special payment along with the regular one. Prior specials were smaller, and this last one of 8c was amazing and not expected to continue at this level next quarter.
– KEN
Kenon Holdings is just that, a holding company from Israel that is based in Singapore under the name Ansonia holdings. It has no K1 tax form, does not remove any foreign tax and pays irregularly. Its largest holding is the utility, Israel OPC and also has a smaller position in ZIM shipping. Pay day was July 5th for that $10.25 huge distribution and the price has now more than compensated for the payment. I expect it will rally back up again. It, along with other shipping companies, has been punished and offer reasonable current valuations.
-WPC
WP Carey is a triple net real estate investment trust headquartered in NY, but operates worldwide. It raises the dividend sparsely every quarter quite reliably, but in annoying partial cent increments. It currently has a 4.75% yield.
-CGBD
Carlyle Secured Lending is a BDC and it also has been providing normal and special payments.
Its basic payment has been 32c or $1.28 per year.
-BCE
BCE is a Canadian company and the dividend may rise, but after the foreign exchange with the US dollar makes it somewhat difficult to evaluate. I have no concerns, as it offers a nice yield and regular dividend.
Monthly Payers
I have 5 for some time and they are discussed in my June article here.
July Transaction
Yes, really; only 1 stock was added to and it was a preferred share.
NRZ-D or New Residential Investment Company preferred shares pay $1.75 per year and pay 4x per year 43.75c in February, May, August and November. They just had a name change to Rithm Capital and the new ticker is RITM-D, (RITM.PD). The price is ~ 22.50 and therefore a yield of 7.8%.
The Top 10 Holdings in RIG
The list below shows the top 10 holdings by % portfolio value with the largest position on down. Quality is important, thus I also show the S&P credit rating.
|
Ticker |
Name |
Credit Rating |
|
|
Sector |
Company |
Company |
S&P |
|
Healthcare |
(ABBV) |
AbbVie |
BBB+ |
|
Healthcare |
(MRK) |
Merck |
A+ |
|
Healthcare |
(BMY) |
Bristol Myers |
A+ |
|
Healthcare |
(JNJ) |
Johnson & Johnson |
AAA |
|
Energy |
(ENB) |
Enbridge- CDN |
BBB+ |
|
Utility |
(DUK) |
Duke |
BBB+ |
|
Industrial |
(GD) |
General Dynamics |
A- |
|
Cons Staple |
(PM) |
Philip Morris |
A |
|
Utility |
(XEL) |
Xcel Energy |
A- |
|
Industrial |
(LMT) |
Lockheed Martin |
A- |
The next chart reveals the sector representation of the Top 10.
These represent 29.35% of “PV” portfolio value with the 4 healthcare providing 15% of it.
|
# |
|
|
Sector |
stocks |
|
Healthcare |
4 |
|
Energy |
1 |
|
Utility |
2 |
|
Industrial |
2 |
|
Consumer Staple |
1 |
The 2 industrial stocks are defensive by nature and therefore 9 out of 10 stocks are defensive income providers. The portfolio goal is to achieve 50% income from defense with all of these showing quality as well.
The Next 11 RIG Positions
These represent 18.3% PV. Added to the “top 10” they offer 47.65% PV and show RIG sector diversification.
Abbreviations used:
RE = real estate
Tele-Comm = communication / telecom
RE-HC = real estate healthcare, a defensive sector
Fin-BDC = Financial-business development company
|
Ticker |
Name |
Credit Rating |
|
|
Sector |
Company |
Company |
S&P |
|
Utility |
SO |
Southern Company |
A- |
|
Healthcare |
AMGN |
Amgen |
A- |
|
Tele-Comm |
BCE |
BCE |
BBB+ |
|
RE-HC |
OHI |
Omega health |
BBB- |
|
RE |
WPC |
WP Carey |
BBB |
|
Cons Staple |
KMB |
Kimberly Clark |
A |
|
RE |
SPG |
Simon Prop Group |
A- |
|
Cons Staple |
MO |
Altria |
BBB |
|
Tech |
AVGO |
Broadcom |
BBB- |
|
Material |
LYB |
LyondellBasell |
BBB- |
|
Fin-BDC |
ARCC |
Ares |
BBB- |
10 sectors are now fully represented from these next top level 11 stocks along with adding a few more defensive stocks. All are S&P credit worthy quality investments. Note that ARCC is a financial sector BDC with one of the highest credit rating grades found for those.
|
# |
|
|
Sector |
stocks |
|
Healthcare |
1 |
|
Energy |
0 |
|
Utility |
1 |
|
Industrial |
0 |
|
Cons Staple |
2 |
|
Tele-Comm |
1 |
|
RE-HC |
1 |
|
RE |
2 |
|
Tech |
1 |
|
Material |
1 |
|
Fin-BDC |
1 |
Summary and Conclusion
The top 21 shown above contains 15 of the 43 defensive names held in RIG of the 89 stocks total. The 50% income goal from defensive sectors and stocks continues to be met.
I look for quality low debt/high credit rated companies and review those in RIG often and now provide a nice “WTB,” or want to buy, price list for all of the 89 stocks along with a Non-RIG list for subscribers to follow.
The search is always ongoing for RIG candidates and the goals and specifics I want include the following:
– quality rated dividend-paying stock.
– undervalued, but can be at fair value for extra quality ratings.
– low debt/great high credit rating.
– pay out and cash flows to easily cover the dividend along with a rising dividend growth rate.
– defensive in nature with products or services I understand and can easily follow.
The market is still too volatile and weak to consider adding new positions currently, but my list will always be waiting for the right time. Cash should be king and therefore my actions are very much in line with preserving it, currently at ~4.37% in RIG. With an established quality dividend portfolio like RIG, I am confident it will ride the valuation roller coaster while the dividends/income continue to flow in as expected using the quality expectations and goal/s mentioned.
Happy Investing to all.
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