Small Matters
Below is an example of the table I had been including with my weekly investment.
There are three things I felt like changing with this table, starting with the one I published earlier today (below).
Did you notice the changes?
…Coronation! [VFC]
In 1899, John Barbey and a group of investors established the Reading Glove and Mitten Manufacturing Company. In 1920, the company is renamed Vanity Fair Silk Mills, Inc. and they begin selling silk lingerie. Some 20+ years after that, there is an embargo on silk during World War II and so ‘silk’ is dropped from the name. In 1951, the company goes public on the NYSE. In 1969, the name is changed yet again to simply VF Corporation and the company expands into denim. Then, just three years later they begin what is now a 50-year streak of annually increasing their dividend. And this is why we gather today.
All hail VF Corporation!
…Coronation! [GRC]
On October 28, 2022, a company headquartered in Mansfield, Ohio since 1933 joined the list of Dividend Kings. This company designs, manufactures and sells pumps for use in water, wastewater, construction, industrial, petroleum, original equipment, agriculture, fire suppression, heating, ventilation and air conditioning (HVAC), military and other liquid-handling applications.
In other words, the specialize in pumps. And they pay dividends.
All hail The Gorman-Rupp Company!
…Coronation! [MSEX]
This past weekend, using the Sure Analysis Research Database from Sure Dividend, I ranked stocks in preparation for my weekly investment of $250. I noticed that my universe from which I invest, the Empire, now numbered 71, one more than last week. After matching one list of tickers against another, I found a company with a 50-year streak of annual dividend increases, that had made it through my filters but had not yet appeared on Sure Dividend’s official list of Dividend Kings. I contacted Sure Dividend about the inconsistency and their founder and CEO Ben Reynolds, responded promptly. He agreed that this company should be added to the Dividend King list.
I wish this new Dividend King hailed from the Technology or Telecommunications sector, but it is a utility. Nevertheless, it is always a pleasure to see another company make this exclusive list.
All hail Middlesex Water Company!
…‘Tis the Season
Earnings season is underway in earnest. PPG will be the first in the portfolio to announce tomorrow. Then over the next three weeks, the remaining ten holdings follow suit. I truly don’t expect any material surprises in either direction. However, I do expect some positive price movement as more than a few of the holdings are in oversold territory. The bear market has been indiscriminate in its selloff. But earnings season is a time when strong companies pick up their tits and walk, and the wheat gets separated from the chaff, mixaphorically speaking.
CPI: What Happened
This is just a quick follow up to my last post wherein I provided some insight into what we could expect from today’s CPI report. My rather simple regression-derived estimate for the month over month change was spot on. My estimate for the annual change was high.
…CPI: Here’s What to Expect
Today, the U.S. Bureau of Labor Statistics released its latest report on the Producer Price Index (PPI). In about 9 hours, they will release its latest Consumer Price Index (CPI) report. The PPI report came in slightly worse than expected, and the market responded accordingly with a 0.32% drop. The market is hoping for a good CPI report because that would be an indication that the Fed’s rate increase and monetary tightening policy to address rampant inflation is working. In fact, the market really wants a stellar report. That would be cause for the Fed to reconsider its aggressive policy and avert a deep recession.
I believe the market is going to be disappointed.
…Mr. Market is Rash
At 4:10 pm, on October 10, 2022, Legget & Platt Inc [LEG] issued a press release announcing a reduction in their estimate of earnings for 2022 and some business acquisitions. I only noticed this after-market news release because there was an inconsistency between my spreadsheet, that uses the day’s closing price, and a certain exhibit of TD Ameritrade’s website that displays where prices have landed after all post-close trading is complete.
In just 10 minutes, LEG’s share price fell from the day’s close of $34.68 to $31.10, or -10.3%.
We’re in a bear market and an economic recession. The market has lost a quarter of the value it has built up in over a century in just three quarters of a year. But 10% in 10 minutes for a single company? I was intrigued.
…Confirming Market Orders
Unless my acquisition price is markedly different than the previous trading day’s close, I will not be providing purchase confirmations for market orders going forward. The portfolio and performance pages have been updated. The average cost of MMM has been changed on the performance page. Previously the portfolio had eight shares from one purchase at a price of $124.75 per share. Today, I purchased three more shares at $111.69 per share. My average cost now reads $121.19. The calculation is simple.
Averaging down is a form of dollar cost averaging. Sometimes averaging down gets a bad rap. Royal Dividends will be employing this approach frequently and doing it for the right reasons, in a way that makes sense. Look for a more detailed post on this topic in the near future.
Going Forward
There are eleven stocks in the Royal Dividends portfolio, what I call the Portfolio for the Ages. Let’s look at the portfolio and note some of the characteristics it possesses:
- The dividend yield is at a very significant level of 4.2%, well above that of the S&P 500 at 1.77%.
- There is exposure to every sector.
- Each position is nearly equally weighted.
- The portfolio beta of 0.88 is less than that of the S&P 500.
- Nine of the eleven stocks are Dividend Kings.
- The dollar-weighted average dividend increase streak of the portfolio is 49.98 years.
So, what’s next?
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