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5%+ Dividend Yield Portfolio: Taking Profits As Market Valuations Flash Warnings (Jan 2017 Review)

Published Thu, 02 Feb 2017 17:49:16 -0500 on Seeking Alpha

Review and Outlook
It's been a solid start to the year as the S&P 500's return of 1.9% was almost mirrored by my 1.5% return. After the dramatic returns of November and December, it makes sense to me that the markets would take a breather before deciding on the next move.
No Trump talk from me this month - not because it isn't relevant, but because: 1) he is already the subject of thousands of mentions on Seeking Alpha, and 2) no one has any idea what is going to happen next - let alone what the impact on stocks will be.
So now, having dispensed with any readers interested in sensationalism, hopefully the rest of you will stick around for my ponderings and some non-alternative facts. This brings me to valuations (which, contrary to many dividend growth investors, I believe are critically important in figuring out entry and exit points for investments). While I am a believer that overweighting dividend-paying stocks is one the most predictable long-term wealth-building strategies, I think it is the value (versus growth) skew of dividend payers that smooths out volatility-induced drawdowns and mitigates against excessive valuations that are not supported by operating metric fundamentals. So when a dividend payer's yield gets pushed down because its stock price has been pushed up, I will look to take a capital gain and wait to re-buy the stock at future prices more in line with historical metrics (P/E, PEG, dividend yield, etc). While some dividend... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
NEW RESIDENTIAL INVESTMENT 14.98   18.0 0.83 2.00 13.28
ICAHN ENTERPRISES LP 67.60   16.1 4.20 8.00 11.95
TRANSOCEAN 5.65   0.0 -1.98 0.00 10.34
EATON VANCE TAX MAN GLOBAL BUY WRITE OPP FUND 9.67   0.0 0.00 0.00 9.03
GLOBAL X SUPERDIVIDEND ETF 17.06   0.0 0.00 0.00 8.83
EATON VANCE SENIOR FLOATING-RATE TRUST 12.99   0.0 0.00 0.00 7.02
BLACKSTONE MORTGAGE TRUST 36.16   14.5 2.49 2.48 6.94
SENIOR HOUSING PROPERTIES 8.89   0.0 -0.34 0.60 6.73
OMEGA HEALTHCARE INVESTORS 41.16   32.4 1.27 2.64 6.57
FORD MOTOR 9.41   17.1 0.55 0.60 6.37
ABBVIE 70.83   26.0 2.72 4.28 6.28
SPDR S&P INTERNATIONAL DIVIDEND ETF 39.21   0.0 0.00 0.00 5.78
AT&T 38.38   16.1 2.38 2.04 5.43
BANCO SANTANDER 4.10   8.5 0.48 0.21 5.05
KINDER MORGAN 20.42   20.6 0.99 1.00 4.94
BANK OF NOVA SCOTIA 56.20   11.2 5.02 2.70 4.79
TOTAL 51.70   12.8 4.03 2.38 4.59
GLAXOSMITHKLINE 41.03   18.4 2.23 1.83 4.47
ENI 30.72   13.6 2.25 1.37 4.26
VERIZON COMM 60.43   15.8 3.83 2.46 4.04
BLACKSTONE GROUP LP 52.24   29.4 1.78 1.92 3.87
MERIDIAN BIOSCIENCE 9.82   16.1 0.61 0.25 2.56
BANK OF AMERICA 29.67   10.6 2.80 0.72 2.45
GOLDMAN SACHS 218.74   9.2 23.84 5.00 2.32
PROSHARES ULTRAPRO SHORT S&P 500 25.26   0.0 0.00 0.00 2.32
JPMORGAN ALERIAN MLP INDEX ETN