Dividend growth portfolio may 2018 update seeking alpha grade 9 electricity quiz


It has been about a year and a half since I retired and subsequently wrote my first Seeking Alpha article detailing my dividend growth portfolio. I had intended to write periodic articles detailing the portfolio updates and changes (as many other authors do here), but life events sidetracked me for a while. Rather than detail all the changes I’ve made, I’m just going to present the portfolio as it stands now.

In general, I have made many major adjustments to reduce my overweight allocation to the REIT sector (I was way heavy in REITs) and to achieve more balance and diversification. With this in mind, I’ll list my current holdings by sector and then discuss a few recent investments I’ve made that will be more relevant for someone looking for investment ideas.

I finally bit the bullet (20 years late) in Amazon. I just can’t fight it anymore, and I see no end to its growth. It doesn’t pay a dividend, so this is just a capital appreciation play for me. My Hasbro position is a trading position that I’ve bought and sold a couple of times. I bought Home Depot and Lowe’s early this year when they pulled back a bit. Their yields aren’t that big, but the dividend growth rates are huge at 29% and 21% respectively.

I picked up Hormel last August after it dropped a huge amount on a bad earnings report. It has been doing well since that time, and I’m up over 15% in ten months. I bought into KMB and MKC early this year when the market had its big correction, or pullback, or whatever that was. I’m down about 7% on KMB but up about 7% on MKC.

I got stung a few years ago with some of the energy stocks, such as Kinder Morgan (NYSE: KMI). For this reason, I’m slowly wading back in a bit. Exxon seemed safe, and the yield over 4% was pretty compelling. OKE has been a fantastic investment for me. Targa has a great yield, but its price has been range-bound for quite a while. Since Targa’s yield is so high, I’m okay with the price stagnation. Just stay right there….

Some of my REIT money allocation went into the Financials this year. I had wanted PFG and TROW for a while and finally pulled the trigger when they pulled back. The Moelis & Co. investment actually came across my radar as a result of the comments section of a Seeking Alpha article I wrote a few weeks ago. You can still read it here. (Thanks for the tip khart100. I’m already up 5.2% in just 3 weeks.)

I like these defense stocks. It seems like there is a never ending demand for their "products". I’ve owned Boeing for a long time and don’t intend on selling anytime soon. Their backlog of plane orders is just astonishing. I didn’t buy the GE shares until recently, so I’m thinking that, 5 years from now, these price levels are going to look like bargain basement in hindsight.

I expect to take some heat in the comments section about my MOAB sized overweight position in Micron. Some of that position will likely be coming off the table this week since I sold some covered calls, which are now in the money. Some of the Micron position is also invested in January 2018 calls which are doing very well. A large portion of Micron is also in common shares which I intend to start trimming in about 4 or 5 weeks. I wrote an interesting Seeking Alpha article on Micron. You can read it here.

I purchased the Apple shares when it pulled back a couple months ago. I knew that they have a massive stockpile of cash to do something with, and I figured that it would benefit the shareholders in some fashion. I decided that Apple would likely be up over 200 before too long, so I might as well join the bandwagon.