- I bought shares of W.P. Carey after reading some convincing analysis
- The stock is trading below it’s historical P/AFFO level
- Currently sports a 6.2% dividend yield that may grow substantially in the next few years
W.P. Carey is a triple net lease REIT that I recently added to my portfolio. Per investopedia,
A triple net lease is a lease agreement that designates the lessee, which is the tenant, as being solely responsible for all the costs relating to the asset being leased, in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay the net amount for three types of costs, including net real estate taxes on the leased asset, net building insurance and net common area maintenance. This type of lease can also be referred to as a net-net-net (NNN) lease.
- I bought shares of J.M. Smucker after liking what I saw with a deeper analysis
- The stock is trading near it’s 52 week low and at a fair value based on adjusted earnings
- The dividend will be increased soon, ballpark may be around 8%
- The dividend has room to grow, a current yield slightly better than the S&P
I like to give the TL;DR (too long, didn’t read) version at the top so you can just skim if you want but of course I encourage you too read on!
I have been working on a series of articles pertaining to the big food companies. I’ve covered Kellogg, General Mills, J.M. Smucker and soon to be Hormel. All four companies have been trading near their 52 week lows, offer a steady business model and pay dividends. This is an intriguing combination and had me wanting to dive deeper to see if they were worth investing in.
Disney reported 2nd quarter numbers on May 8th. The company reported earnings of $1.50, up 15% from the $1.30 earned in 2016. So is Disney a buy after earnings?
For the first half of the fiscal year, earnings of $3.05 were reported versus the $3.04 earned in the first half of 2016. This represents virtually no growth seen in earnings. Excluding certain items, earnings were up 2% for the six months.
CEO Bob Iger commented on the strength of the studio and parks divisions. He iterated focusing on long term shareholder value. Even the much maligned media networks segment grew revenue 3% year over year. That is the largest revenue segment with nearly $6B in revenue for the quarter though operating income dropped 3%.
ESPN has been the cause of the stock woes over the past 18 months. The decrease in operating income was due to a decrease of revenues at ESPN which was partially offset by increases at the Disney Channels and Freeform.
ESPN saw higher programming costs which was partially offset by affiliate and advertising revenue growth. I think the ESPN situation is overblown, the company is moving that content to many of the streaming services. These headwinds will blow over, in the meantime I want to see if the share price pulls back to an unreasonable level.
- I bought more AT&T after receiving my custom stock alert
- Shares crossed over the 5% yield mark which made them look compelling
- Expecting 7-8% annual total returns from this purchase
- 40 more shares will bring an additional $78.40 of income based on today’s dividend rate
I’m playing a little catch-up with my portfolio changes. On May 2nd I bought more AT&T after receiving a text alert that it crossed over 5% dividend yield.
AT&T, along with other telecoms I typically view as cash cows to be periodically purchased at an appropriate yield. I could talk about the underlying business growth but this will just be a slow steady eddy type stock. I’m not expecting rapid growth so initial purchase price is paramount.
Dividend Portfolio Update
This is my dividend portfolio update article series. I like to highlight a few facts and figures from the month. I’ll share my income, any portfolio changes, any dividend increases (or cuts) and anything interesting that I feel to talk about.
- I received $199 in dividend income during April
- I purchased shares of Public Storage as my only portfolio change in April
- Four holdings increased their dividend during the month
- Enjoyed a lovely week at Disney World
This is a snapshot of my dividend income thus far this year. You can always check my live portfolio here.
On May 4, 2017, a story came out about Spirit Realty having credit issues with some tenants. Shares for Spirit then proceed to drop 20%. In the wake of that, other triple-net lease players fell hard, including Realty Income. This is a textbook example of Custom Stock Alerts.
Realty Income is one of the most beloved REITs – especially given that it bills itself as “The Monthly Dividend Company”. Shares tend to trade at a premium in the REIT space which in turn helps the company maximize money received by issuing shares.
As an existing shareholder, I am always looking to add to holdings when, in my opinion, they are unfairly beaten down. That’s precisely what happened when an unrelated company reported bad earnings.
Custom Stock Alerts
My site, customstockalerts.com helped me out here. I had existing alerts setup for Realty Income, seen here (this is how it looks after the fact, note the 2 inactive alerts).
I have a multitude of alerts setup for the company, proximity to 52 week high or low, daily price movement, dividend yield above 5% and just a rough ballpark of a price I’d be interested in.
My PageSpeed Score Journey
TL;DR – Faster pages make everyone happy
This is my journey of how I achieved a perfect PageSpeed score.
Firstly, besides writing here on Dividend Derek, I created and run Custom Stock Alerts (CSA). Being in the IT field, it’s important to continue working on my skill set. CSA was the perfect project for me to try out some new technologies. It’s hosted on Amazon Web Services (AWS) and I use a multitude of their services. I honestly can’t speak highly enough of my experience setting everything up and the documentation available when I needed help (which is still often).
After launching CSA, I started researching how to make my site more visible, how to appear better on Google for SEO, things of that nature like any small business would. I came across PageSpeed Insights and ran my initial test. It wasn’t terrible, it wasn’t great, I think my initial PageSpeed score was in the 60s.
A high PageSpeed score is important for a few reasons, users won’t wait around on a poor performing site and Google understands this. They won’t say just how much, but it appears to play a role in how high you rank on organic searches. Also, to reiterate, being in IT it was something I also wanted to do to learn new things.