Saturday, July 23, 2016

Recent Sell - Realty Income (O)

With the markets at all time highs here this week it's getting harder and harder to find stocks to invest in. Not only that but stocks are increasingly looking overvalued, so much in fact that I have taken my foot off the pedal and stopped funding my brokerage account. Now I am left wondering what I can do with my money.

Well every month when I get my statement from my mortgage company and I see the ridiculous interest rate (5.375%) I have and I wonder why I haven't been paying it down. I've finally decided enough is enough and began aggressively paying down my principal.

In order for me to completely pay off my mortgage in the next month or two I will need some extra capital. The money I need will have to come from the sale of one of my core holdings. I wanted to sell a position that I thought was overvalued and could possibly get back in at a better price in the future. There were a few candidates but I ultimately chose Realty Income (O).

I have owned Realty Income since 2012 and have an average cost basis of about $40 per share and completely sold my entire position for just under $70 per share. I'm looking forward to the day I can use the money I save every month and put it towards new investments again. Possibly even Realty Income.

Sunday, July 17, 2016

Expected Earnings For Next Week:July 18- July 22

Just a heads up ... There are some major companies scheduled to report quarterly earnings next week. On monday Bank of America Corp. reports earnings before the market open with IBM and Yahoo reporting earnings after the market close. On Tuesday we have Johnson & Johnson & Lockheed Martin reporting before the bell while Microsoft reports after the bell.

Source: Stocktwits


Wednesday, July 13, 2016

Dividend Investment Panic – Are We Losing Our Minds?

This is a guest post by Passive Income Dude at
Recently I’ve talked a lot on my site about yields (here), but today I want to get even more to the point about the crazy negative-yield environment we find ourselves in, and more importantly, what that means for us as dividend investors.

Consider this fact:
There is now $13 trillion of global negative-yielding debt. There was almost NONE in mid-2014. Now, close to 10% of all debt is negative!

The chase for yield, and POSITIVE yield, is real. Consider the following quote from Morningstar’s DividendInvestor newsletter this month, where he talks about an idea called “There is No Alternative:”
“It’s TINA’s market now: There Is No Alternative. This has to be the least inspiring rationale for a bull market ever. No matter how far they’ve already run, how high valuations have become, or how pitiful the under­lying economic and corporate fundamentals may be, we’re told we have no choice but to keep holding stocks.”
Does it seem like he believes in the long-term soundness of these increased stock prices? No.
So there lies the foundation for my argument. The “There is No Alternative and Negative Yields” argument. The argument that dividend paying stocks are being flocked to like crazy by individuals looking for yield, and individuals who used to look for them in bonds.
The problem arises when these individuals think the risk profile of the stock is the same as the bond. Again from the DividendInvestor, “Even when it pays a large, reliable, and growing dividend, a stock is still a stock. Excess popularity usually correlates with high valuations, which can only subtract from future total returns while adding risk.”
High valuations and low future returns. Interesting. I recently wrote how Realty Income (O) is overvalued now, in my opinion. Realty Income, to me, could be an example of what is happening and will continue to happen in the near term. Be careful, O’ Dividend Investors, that you are not buying dividend paying stocks at a significant premium!
What do you think? I’d love to hear your perspective and comments.
If you would like more investing commentary and insights, please visit Passive Income Dude at where I share my journey to financial freedom through my own disciplined dividend and real estate investing. Thanks for reading!

Saturday, July 9, 2016

Recent Buy - Abbott Laboratories (ABT)

Time for my next purchase has come around once again. This time I had my eyes set on a stock which payed in the middle month of the quarter. It's my lowest paying month and for better or worse I like to keep my payments rather balanced.

The first thing I do when I'm ready to make a purchase is go through my portfolio and look for names which are selling at a discount or at least what I interpret as fair value. None of my holdings really made the cut except for PBCT. However I put that on the back burner since the dividend growth has been disappointing to say the least.

I decided to look elsewhere outside of my portfolio instead and I opened a new position in Abbott Labs (ABT). I purchased 27 shares @ $39.40 for $1073.

Abbott Laboratories manufactures and sells health care products and medical equipment worldwide and has increased its dividend for 44 consecutive years. Abbott offers a safe and attractive dividend that should continue to grow over time. It's important to note that dividend growth could be a bit slower in the next couple of years however as Abbott has made some key acquisitions recently and they need to conserve cash. I view this as temporary however and growth should return in time.

Abbott Labs (ABT) Stock Chart

ABT Basic Stats
  • Ticker Symbol: ABT
  • Sector: Healthcare
  • Yield: 2.6%
  • Dividend Growth Streak: 44 years
  • Dividend Growth 1yr: 8%
  • Payout Ratio: 68%
  • P/E Ratio: 25 (17 forward)
  • Market cap:$61 Billion
  • Website:
ABT Dividend Growth

At first glance the anomaly in 2013 looks like a dividend cut but was simply due to the Abbvie (ABBV) spinoff and not actually a cut.