Dividend-News

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Value Dividend Fund: First Month Update

Published Wed, 17 Apr 2019 09:57:36 -0400 on Seeking Alpha

In my previous article I outlined the beginning of my new fund focusing on undervalued volatile dividend stocks that have lucrative option premiums, which allows us to collect income while waiting out any short-term headwinds in strong companies. You can find a link to that article here.
One month ago, I had written an article outlining a new fund I created involving selling covered calls on volatile, undervalued dividend stocks. The main criteria for selecting stocks for the fund was the following:
1.) Positive Earnings and Revenue Growth.
2.) Never pay more than 15x Forward Earnings for a stock.
3.) Sustainable Payout Ratios
4.) 3.5% Portfolio Yield
5.) Buy in quantities of 100 and sell Jan 2020 calls at strike approximately 20% above where the stock currently trades
Currently, the fund has 17 total positions, shown below.

Source: Alex Pickrell
Only two of the positions were added in the last month, Triton (TRTN) and ADT Inc (ADT). You can find the case I made for Triton here.
As you can see, as of the closing bell Friday, the one month return without including options premiums or dividends has been 4.27%.

Source: Alex Pickrell
This equates to slight under-performance of the S&P 500 for the month. However, when you factor in for the 5.82% option premiums received for the Jan 17th 2020 calls sold on the positions and dividends that are scheduled from the time of initiating the position to January 17th of 3.14%, the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
BGC PARTNERS 5.68   11.4 0.50 0.56 9.98
TANGER FACTORY OUTLET CENTERS 16.50   21.4 0.77 1.42 8.35
ABBVIE 70.83   26.0 2.72 4.28 6.28
RYDER SYSTEM 53.25   8.8 6.03 2.24 4.15
FOOT LOCKER 40.52   8.8 4.60 1.52 3.60
AMERICAN EAGLE OUTFITTERS 17.60   11.6 1.52 0.55 3.18
THOR INDUSTRIES 52.37   21.6 2.42 1.56 3.18
DELEK US 36.53   5.7 6.41 1.16 3.17
CVS CAREMARK 63.90   17.9 3.57 2.00 3.14
CLIFFS NATURAL RESOURCES 8.34   2.2 3.88 0.24 3.09
DANA HOLDING 14.36   9.3 1.55 0.40 2.57