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Coronation! [ADM]

When is the last time you thought about linseed? Have you even seen that word in print lately? Did you know that linseed and flaxseed are the same thing? The seeds come from the common flax plant (linum usitatissimum) and if you’re crushing or pressing the seeds for human consumption in the form of fiber or oil, we tend to call it flaxseed. When the seeds are processed for the purposes of making furniture polish, paints, or cloth (linen…now we’re seeing things oh so clearly) then linseed is the more common term. Maybe. The truth is the terms are interchangeable and the use in the UK differs from American English.

So, you likely know that if you take a spoonful of flaxseeds and grind them up you have a small amount of flax meal you can add to a smoothie or baked goods for extra nutrition. Or you can add the whole seeds directly to some dough for a tasty multigrain bread. But do you know what you get if you scale your production way up and process tons and tons of linseed? You get rich.

There’s a company that has been crushing linseed for over a hundred years and on January 26, 2023, they announced a dividend increase that represents 50 consecutive years of annual increases in their dividend, making them a Dividend King.

All hail Archer-Daniels-Midland Co!

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Coronation! [ADM]Read More »

Dividend Stock of the Week [TDS][10]

This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.

TickerAccount Value
MMM2,316.56
MO2,518.36
TDS2,256.80

The lowest amount belongs to TDS. In order to invest a minimum of $250.00 in TDS, I need to purchase 35 shares this Monday. Below, is the purchase history and average cost calculation.

Like training wheels on a bike, I’ve provided support for this position in TDS several times. At some point though, the stock needs to be able to go on its own. That point may very well be next week, as to invest much more in TDS would mean a breach of portfolio weighting. This means there is a very good chance that next week will feature a new holding in the portfolio.

Oh, and there’s a new Dividend King in the Empire. Be on the lookout for a Co-ro-nay-she-own!

A Royal Mess

The stock market was down this week, a small correction from an otherwise good, multi-week run-up. In fact, the S&P 500 is up 13.25% YTD through June 23, 2023 (ignoring dividends). You’d never know it by looking at the Portfolio for the Ages. But let’s not look at the Royal Dividends portfolio just yet. Instead, let’s take a look at the seven largest companies by weight in the S&P 500.

Surprised? These seven companies, effectively 1.4% of the number of companies1 in the index, represent a whopping 27.9% by weight. The S&P 500 Index is market capitalization weighted and is heavily influenced by these overpriced juggernauts. The weighted average YTD price return of the magnificent seven is an enormous 68.7%. This means the remaining 493 companies are delivering a wonderful -8.27% YTD. Taking dividends into account would improve this gap ever so slightly, but let’s get real here – the S&P 500 in no way represents the broader equity market.

Unless you have decent exposure to the big seven, the market has been garbage.

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A Royal MessRead More »

Dividend King of the Week [MO][7]

This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.

TickerAccount Value
MMM2,404.42
MO2,291.64
TDS2,334.30

The lowest amount belongs to MO. In order to invest a minimum of $250.00 in MO, I need to purchase 6 shares this Tuesday (markets are closed on Monday). Below, is the purchase history and average cost calculation.

Dividend Stock of the Week [TDS][9]

This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.

TickerAccount Value
MMM2,297.70
MO2,351.44
TDS2,056.20

The lowest amount belongs to TDS. In order to invest a minimum of $250.00 in TDS, I need to purchase 34 shares this Monday. Below, is the purchase history and average cost calculation.

Dividend Stock of the Week [TDS][8]

This week, three of the portfolio holdings ranked in the Top 10: MMM, MO, and TDS.

TickerAccount Value
MMM2,358.19
MO2,357.16
TDS1,670.40

The lowest amount belongs to TDS. In order to invest a minimum of $250.00 in TDS, I need to purchase 36 shares this Monday. Below, is the purchase history and average cost calculation.

The average purchase price per share will be around $11.71 and a perfect strike price for a covered call would be $12.50. However, with Friday’s closing price just under $7.00, there are no bids for calls above the $7.50 strike price that aren’t too far into the future. It would be possible to sell a call at $7.50 for a decent premium, but TDS could easily hit $7.50 in a matter of days, and I do not wish to have my shares called away at a loss.

Therefore, I will refrain from writing a call at this time. Another good reason to hold off on covering the position at this time is the activist letter sent from GAMCO to the CEO of TDS Friday afternoon.

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Dividend Stock of the Week [TDS][8]Read More »

No Purchase This Week [7]

This week is the final of four weeks in which I am abstaining from the usual $250+ investment into the portfolio. This maintains the $250+ per week average. However, for anyone curious as to what I would have invested in, I present the usual material below.

This week, three of the portfolio holdings ranked in the Top Ten: MMM, QCOM, and TDS.

TickerAccount Value
MMM2,229.62
QCOM2,538.05
TDS1,615.20

The lowest amount belongs to TDS. This is no surprise as one would have to go back more than 35 years to February 19, 1988, to find a day where they closed lower than their $6.73 closing price on Friday.

Barring any unforeseen developments, I will be adding to the TDS position next week.

No Purchase This Week [6]

This week is the third of four weeks in which I will be abstaining from the usual $250+ investment into the portfolio. This maintains the $250+ per week average. However, for anyone curious as to what I would have invested in, I present the usual material below.

This week, four of the portfolio holdings ranked in the Top Ten: MMM, MO, QCOM, and TDS.

TickerAccount Value
MMM2,277.69
MO2,355.60
QCOM2,434.78
TDS1,668.00

The lowest amount belongs to TDS.

The covered call on TDS expired worthless on Friday. The $38.98 I collected in premium after commissions was nice and all, but hardly a protection in the face of such massive declines in the share price. The portfolio is now down 11.7%, a record low! TDS has played a large role in this performance. Further, the dividend won’t be safe until their earnings turn sufficiently positive. The option premium is supposed to be a hedge against a potential cut in the dividend, but now that the share price is under $7, there are no strike prices above my cost level – even for the last available expiration date of November 17, 2023. Even if I were to purchase another 60 shares at say $7, bringing the average cost per share down further, there are no good choices for writing a call.

So, I will wait; a lot can happen in two weeks. Don’t get me wrong, I have zero expectation that the TDS stock price will reverse course, presenting me with only wonderful options. However, it could go out of business after 49 consecutive years of dividend increases. In fact, what if they just decided to have one last big blow out?

  1. Sell all the assets.
  2. Pay a massive, irresponsible dividend.
  3. Put tumbleweed in the cubicles.
  4. Scratch TELECOAN into the glass window in the lobby.

No Purchase This Week [5]

This week is the second of four weeks in which I will be abstaining from the usual $250+ investment into the portfolio. This maintains the $250+ per week average. However, for anyone curious as to what I would have invested in, I present the usual material below.

This week, three of the portfolio holdings ranked in the Top Ten: MMM, QCOM, and TDS.

TickerAccount Value
MMM2,306.21
QCOM2,383.26
TDS1,778.40

The lowest amount belongs to TDS.

I spoke briefly about TDS last week, so I will not repeat that information again. However, this week I will add that when I resume investing in three weeks, I wouldn’t be surprised at all to find that TDS gets a series of installments. Or it may get a double shot that very first week, because at that point the current covered call will have expired worthless two weeks before (on May 19th), and I may be interested in acquiring an additional 60 shares, so that the next covered call can be on three contracts. Implicit in this strategy is that TDS remains in the Top Ten and that no one else performs so poorly as to become the number one stock for investment. My bet is that TDS won’t move appreciably until the next quarterly earnings report. That’s just the way it is with out of favor stocks – they have to prove to the market that they’re worthy of investment again. And as for another company performing worse – it isn’t likely.

No Purchase This Week [4]

Last week, I placed a limit order to purchase one share of FMCB for $967. That order did not execute on Friday. With FMCB’s stock price going from $950 to $975 that day, skipping right over my order, I thought there was a good chance it would not execute during the week. Therefore, I set up a market order to purchase 3 shares of QCOM on Tuesday morning. Shortly after that acquisition, my limit order on FMCB executed. And so, because the total invested this week was above $1,250, I will be abstaining from the usual $250+ investment for a total of four weeks, of which this week will be the first. This maintains the $250+ per week average. That being said, I am still going through the motions of the weekly rankings because it helps to see a complete and utter lack of progress in my attempts to amass wealth.

This week, four of the portfolio holdings ranked in the Top Ten: FMCB, MMM, QCOM, and TDS.

TickerAccount Value
FMCB1,920.00
MMM2,377.05
QCOM2,501.94
TDS1,903.20

The lowest amount belongs to TDS.

The market’s response to TDS’s 2023 Q1 earnings announcement was decidedly negative, dropping TDS to levels not seen in 35 years. However, there are signs that their growth plan is moving in the right direction. On May 19th, the call option will undoubtedly expire worthless, and I will be shopping for a new one. The strike price will most certainly be lower, but I’ve been down this road before. It can take years for turnaround plans to work and for the market to recognize those efforts. Royal Dividends will continue to raise as much income as possible from this holding while it works itself out of the mud.

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