Published Tue, 09 Jul 2019 10:10:16 -0400 on Seeking Alpha
Most of you are familiar with dividend growth investing. 2CHYP (our high yield portfolio) has similar goals of generating an ever growing stream of cashflows, but uses a more active relative value approach. Over time we intend to both grow the portfolio’s income and outperform the index.
Dividend growth investing has worked well for many people as a low stress and somewhat reliable way to grow cashflows over time. It usually involves parking capital in a company that grows its dividends over time and is passive in the buy-and-hold sense of the word. There are clear strengths to this style of investment, but it may be running into some trouble going forward. The dividend champion stocks that have been the driver of this strategy’s success have become significantly overvalued; now trading at rather low yields and high multiples relative to growth. Thus, there is now risk of significant capital losses from today’s price in addition to lower current dividend returns.
I would like to suggest a more active alternative to dividend growth investing:
Dividend Engine Investing
Rather than parking one’s money in a stock and waiting for that company to slowly raise its dividends over time, we actively trade between securities to increase the cashflow of our portfolio. Market prices are constantly in flux and by opportunistically selling appreciated securities for discounted peers, we can continuously increase our net yield.
2CHYP commenced trading on 7/1/16 with $100K... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|CBL & ASSOCIATES PROPERTIES||1.38||0.0||-0.95||0.35||27.34|
|RLJ LODGING TRUST||17.42||22.0||0.79||1.32||7.69|
|CITY OFFICE REIT||13.89||0.0||-0.39||0.94||6.92|
|PHYSICIANS REALTY TRUST||17.27||61.7||0.28||0.92||5.36|
|HEALTHCARE TRUST OF AMERICA||28.29||27.5||1.03||1.26||4.45|
Older articles featuring Cbl & Associates Properties (CBL):Retail REITs: Double-Digit Yields, Secular Shifts And Mean-Reversion
We Need To Talk About Dividend Cuts - They Are A Necessary Evil
REIT Preferreds: Higher-Yield Without Excess Risk
Dividend Cuts And Overdue Rent: REIT Earnings Recap
Our High Yield REIT Portfolio - Optimizing Rebound Potential
Now Is Not The Time To Be A High-Yield REIT Investor
Macerich: Debunking Three Bear Theses, Including Why I Want A Dividend Cut
Introducing This Growing Dividend Portfolio
Washington Prime Is Undervalued Regardless If It Cuts The Dividend
Our 2020 High Yield REIT Portfolio