Chasing the Yield

Kevin Bae

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INVESTISSEMENT
CHAQUE SEMAINE

Investing for income through dividends and distributions

03/10/2024

September 2024 Portfolio Recap

September was an eventful month for Chasing the Yield. My annual income increased by $80, thanks to dividend boosts from Microsoft (MSFT) (up 11%), New Jersey Resources (NJR) (up 7.1%), and five other holdings. While there were no upgrades or downgrades in dividend safety, I closed our position in Oaktree Specialty Lending (OCSL) and used the proceeds to increase positions in, as well as take fresh looks at, ONEOK (OKE), Verizon (VZ), and TC Energy (TRP). Podfriend Fountain Castamatic Podcast Guru truefans Podverse CurioCaster Podcasting 2.0 & Value4Value This is a Podcasting 2.0 compatible podcast. This means if you're listening to this podcast on a Podcasting 2.0 compatible app you'll have access to transcripts, chapters, and chapter images that accompany each episode. Please go to podcastapps.com to download and support these independent apps and go to podcastindex.org to support Podcasting 2.0. Use the apps below to directly support independent podcasters. It's easier than you might think to stream fractions of bitcoins to this podcast or any other podcast that is compatible with the Value 4 Value model. This cuts out the need for advertising. What is Value4Value? Value4Value streaming payments enables listeners to send Bitcoin micropayments to podcasters as they listen, in real-time. Go to valu4value.info for everything you need to know to begin directly supporting your favorite podcaster.

28 min
19/09/2024

AI Deep Dive: ONEOK (OKE) post-acquisitions effect on the dividend

I used Google's NotebookLM to create a short deep dive look into ONEOK's post-acquisition of EnLink Midstream and investment into Medallion Midstream. The tool does a good job of explaining the ins and outs and how it effects the company's dividend. The deep dive audio is based on the text below and from other news sources. Podfriend Fountain Castamatic Podcast Guru truefans Podverse CurioCaster Podcasting 2.0 & Value4Value This is a Podcasting 2.0 compatible podcast. This means if you're listening to this podcast on a Podcasting 2.0 compatible app you'll have access to transcripts, chapters, and chapter images that accompany each episode. Please go to podcastapps.com to download and support these independent apps and go to podcastindex.org to support Podcasting 2.0. Use the apps below to directly support independent podcasters. It's easier than you might think to stream fractions of bitcoins to this podcast or any other podcast that is compatible with the Value 4 Value model. This cuts out the need for advertising. What is Value4Value? Value4Value streaming payments enables listeners to send Bitcoin micropayments to podcasters as they listen, in real-time. Go to valu4value.info for everything you need to know to begin directly supporting your favorite podcaster.

9 min
13/09/2024

Verizon acquisition of Frontier and the dividend

I used Verizon's acquisition of Frontier announcement and a couple other sources to create the following AI conversation about the company and the dividend using Google's NotebookLM. It's a pretty good way to get a layman's examination of news and financial information. See what you think. Verizon and Frontier Communications FAQ 1. Why is Verizon acquiring Frontier Communications? Verizon's acquisition of Frontier Communications is primarily driven by the company's goal to expand its broadband network, particularly its fiber optic infrastructure. This strategic move aims to stimulate growth as the wireless phone market approaches saturation. 2. How will the acquisition impact Verizon's financial standing? The $20 billion deal will moderately reduce Verizon's free cash flow in the short term, likely by about 5%, and increase its leverage ratio by 0.2x to 0.3x. However, Verizon expects to achieve annual cost synergies of $500 million by year three, enabling a renewed focus on debt reduction. 3. What does the Frontier acquisition mean for Verizon's dividend payments? Despite the acquisition costs, Verizon has reaffirmed its commitment to dividend payments. The company recently announced a 1.25 cent increase in its quarterly dividend, marking the 18th consecutive year of dividend increases. 4. What are the benefits of expanding fiber optic networks? Fiber optic networks offer significantly faster internet speeds, improved reliability, and greater capacity compared to traditional copper networks and even fixed wireless access (FWA). This positions Verizon to capitalize on the growing demand for data-intensive services. 5. What challenges does Verizon face in expanding its fiber network? Building fiber optic networks requires substantial capital investment due to infrastructure costs, including laying cables, securing permits, and procuring specialized equipment and skilled labor. Ongoing maintenance and upgrades further contribute to the overall expense. 6. How does Verizon plan to manage the increased capital expenditure? Verizon anticipates realizing cost synergies of $500 million annually by year three of the Frontier integration. These savings are intended to offset the increased capital expenditure associated with expanding its fiber network. 7. What is S&P's outlook on Verizon's credit rating after the acquisition? S&P has reaffirmed Verizon's BBB+ credit rating, indicating confidence in the company's ability to absorb Frontier without significantly impacting its financial health. This suggests that the acquisition is not considered a threat to Verizon's creditworthiness. 8. What are Verizon's key priorities for future growth? Verizon's strategic priorities center around three main pillars: driving growth in wireless service revenue, expanding adjusted EBITDA, and generating robust free cash flow. These priorities underpin the company's commitment to delivering value to shareholders and maintaining its position in the telecommunications market. Podfriend Fountain Castamatic Podcast Guru truefans Podverse CurioCaster Podcasting 2.0 & Value4Value This is a Podcasting 2.0 compatible podcast. This means if you're listening to this podcast on a Podcasting 2.0 compatible app you'll have access to transcripts, chapters, and chapter images that accompany each episode. Please go to podcastapps.com to download and support these independent apps and go to podcastindex.org to support Podcasting 2.0. Use the apps below to directly support independent podcasters. It's easier than you might think to stream fractions of bitcoins to this podcast or any other podcast that is compatible with the Value 4 Value model. This cuts out the need for advertising. What is Value4Value? Value4Value streaming payments enables listeners to send Bitcoin micropayments to podcasters as they listen, in real-time. Go to valu4value.info for everything you need to know to begin directly supporting your favorite podcaster.

8 min
18/01/2024

Debt on Personal Assets is not for Everyone

Topics discussed on today's show. Debt vs. No Debt: Some investors prioritize returns and view having no home mortgage as better. However, debt on real estate has its own benefits. Real Estate Appreciation: Real estate generally appreciates over time, offering significant capital gain, especially when debt-free. However, mortgages reduce this gain with interest payments. Debt's Drawbacks: Debt siphons income, limits savings, and can lead to stress, snowballing debts, and repossession. Alternatives: Explore options before debt. If necessary, choose the best rates, prioritize needs, and borrow responsibly. Debt as a Tool: Use debt cautiously, prioritize stability, and understand its long-term consequences. For questions or comments contact me at mail@chasingtheyield.com www.chasingtheyield.com

21 min
06/10/2023

September 2023 Recap

My annual income increased $25 as a result of dividend increases from Microsoft (+10%), NJR (+7.7%), and 5 other holdings. Meanwhile, there were changes to the Dividend Safety Scores of W. P. Carey, Smucker, and Walgreens. W.P. Carey Surprises With Plan to Exit All Office Properties; Dividend Could Be Reduced by Around 20%. Downgraded to Unsafe • Sep 21 J.M. Smucker to Acquire Hostess Brands, Increasing Leverage. Downgraded to Safe • Sep 12 Leadership Changes, Softening Consumer Spending Suggest Walgreens' Turnaround Struggles Continue. Downgraded to Borderline Safe • Sep 1 Casino Expansion, Higher Rates Weigh on Realty Income; Dividend Coverage Remains Healthy. Safe Rating Reaffirmed • Sep 13 Dominion Nears End of Strategic Review With Gas Utilities Divestiture; Dividend Expected to Remain Flat. Safe Rating Reaffirmed • Sep 7 Enbridge to Become More Diversified Energy Company With Gas Utilities Acquisition; Dividend Remains Safe. Safe Rating Reaffirmed • Sep 6 Brandywine cuts dividend by 21%, as economic headwinds continue to pressure office REITs Fortis increases payout by 4.4%, celebrating 50 consecutive years of annual dividend growth Microsoft hikes dividend by 10%, reaching 14th consecutive year of payout growth W. P. Carey raises dividend by 0.19% Philip Morris ups dividend by a modest 2.4%, balancing deleveraging goals with payout growth Realty Income raises dividend by 0.20% NJR increases dividend by 7.7%, marking 30th increase in 27 years Verizon raises dividend by 1.9%, reaching 17th consecutive year of annual payout growth For questions or comments contact me at mail@chasingtheyield.com

28 min
21/09/2023

August 2023 Recap

UGI Mulls Separating Propane Business to Unlock Value, Potentially Causing Jump in Payout Ratio Dominion's Strategic Review Nears End; Firm Remains Committed to Dividend Despite Rising Payout Ratio Labor Inflation and Higher-for-Longer Interest Rates Delay Healthcare Realty's Payout Ratio Improvement Softening Furniture Demand Slows Leggett & Platt's Deleveraging; Free Cash Flow Still Covers Dividend Altria raises dividend by 4.3%, tracking with goal to achieve mid-single-digit payout growth through 2028 Capital Southwest raises dividend by 3.7% and declares $0.06 per share special dividend Illinois Tool Works increases dividend by 6.9%, extending streak of paying higher dividends every year since 1972 Main Street grows dividend by 2.2%, continuing an ongoing commitment to a strong payout Hercules raises dividend by 2.6% and declares $0.08 per share special dividend For questions or comments contact me at mail@chasingtheyield.com

9 min
13/09/2023

Dividend Safe as Dominion Energy Wraps Up Strategic Review; Payout Ratio Above Target

Dominion Energy has been in the energy business since 1898. It’s one of the biggest utility companies in the U.S. and serves about 7 million customers in Virginia, the Carolinas, Ohio, and Utah electricity and gas. Dominion has steady and predictable income because it is regulated utility. Regulated utilities are like monopolies that are controlled by the government. They spend a lot of money to build and maintain power plants, transmission lines, and distribution networks that cover a large area. The government limits the competition by deciding which companies can build new power plants. And even though regulated utilities are monopolies, they can’t charge whatever they want for their services. The government sets the price in an effort to make it fair for the customers while giving the utility enough incentive to invest in safe and reliable service. Dominion’s main business is Virginia Electric and Power Company, which makes more than half of its profits. It operates in Virginia and North Carolina, two states that have good regulatory environments, according to research group called RRA. These states in which Dominion operates have fast-growing populations and businesses, which makes the regulators want to encourage more infrastructure spending by giving higher returns on capital and allowing higher electric rates over time. South Carolina, where Dominion has its next biggest business, is also one of the fastest-growing states in the country. This helps Dominion grow its income organically. In short, most of Dominion’s utilities have good relationships with the regulators and good prospects for growth. But even though Dominion operates in friendly states, it had to cut its dividend in 2020. This ended a long history of paying dividends without interruption for over 90 years. This happened because Dominion decided to sell its natural gas business, which made about 25% of its profits. Without this cash flow, Dominion would have paid out more than 100% of its income as dividends, which wasn't sustainable. So it had to lower its dividend. But, by selling its natural gas business, Dominion became a more focused with one of the best growth rates in the industry. It also plans to increase its dividend by 6% every year until 2026. Dominion’s business is more aligned with the trend of clean energy, and its income has become more predictable with regulated utilities making up 90% of its operating earnings. Dominion Energy is undergoing a strategic review to improve its business. The review could involve selling some of its assets, such as its stake in a gas liquefaction facility, which it already agreed to sell to Berkshire Hathaway for $3.3 billion. However, the outcome of the review is still uncertain and could affect the company’s dividend safety and growth prospects. Dominion has withdrawn its earnings guidance for the year and said it will share the results of the review by the end of this quarter. The company has also reaffirmed its commitment to maintain its current dividend, which has a high payout ratio of near 65%. Dominion’s stock trades at a low valuation compared to its peers and has an attractive portfolio of regulated and renewable assets. We are keeping our small stake in Dominion in our portfolios until we learn more about the review and its implications for the company’s future. For questions or comments contact me at mail@chasingtheyield.com

16 min
04/09/2023

TC Energy intends to spin-off Pipelines business into separate company

TC Energy, a company that develops and operates energy infrastructure, announced that it plans to spin off its Liquids Pipelines business into a separate company. The decision was made after a two-year strategic review and is expected to be completed in the second half of 2024. The spinoff will create two independent, investment-grade, publicly listed companies that will focus on their own growth objectives and operational excellence. TC Energy will become a diversified natural gas and energy solutions company, while the Liquids Pipelines Company will be a critical infrastructure company that connects supply and demand markets for oil and other liquids. The spinoff will unlock shareholder value by providing both companies with more flexibility and efficiency. The spinoff will also enable both companies to contribute to the energy transition and security by providing reliable, lower-carbon energy sources. The spinoff is anticipated to be achieved on a tax-free basis for TC Energy shareholders. Positives The spinoff will create two independent, investment-grade, publicly listed companies that will focus on their own growth objectives and operational excellence. This will allow investors to choose the company that best suits their risk and return preferences, as well as diversify their portfolio. The spinoff will unlock shareholder value by providing both companies with more flexibility and efficiency. TC Energy will be able to optimize its capital allocation and pursue opportunities in natural gas and energy solutions, while the Liquids Pipelines Company will be able to leverage its existing assets and expand its market access and customer base. Both companies will also benefit from lower costs of capital and improved financial metrics. The spinoff will also enable both companies to contribute to the energy transition and security by providing reliable, lower-carbon energy sources. TC Energy will continue to invest in renewable power generation, hydrogen production, carbon capture and storage, and other emerging technologies. The Liquids Pipelines Company will transport oil and other liquids that are essential for various industries and products, as well as support the development of low-carbon fuels. Both companies will also strive to reduce their environmental footprint and greenhouse gas emissions. Negatives The spinoff will create uncertainty and complexity for TC Energy shareholders, who will have to decide whether to hold or sell their shares in the new Liquids Pipelines Company. The spinoff will also require regulatory approvals, shareholder votes, and other conditions that could delay or prevent its completion. The spinoff will reduce TC Energy’s diversification and exposure to the liquids pipelines sector, which has been a stable and profitable source of cash flow for the company. The Liquids Pipelines Company will face competition from other pipeline operators, as well as environmental and social challenges that could affect its operations and growth prospects. The spinoff will also impact TC Energy’s credit profile and financial flexibility, as the company will lose access to the cash flow and assets of the Liquids Pipelines business. TC Energy will have to rely more on its natural gas and energy solutions segments, which are subject to market volatility and regulatory uncertainty. TC Energy may also have to incur additional debt or equity financing to fund its capital expenditures and dividend payments. For questions or comments contact me at mail@chasingtheyield.com

8 min

Tout afficher (21)

Investing for income through dividends and distributions

Création

Kevin Bae
Années d’activité

2021 - 2024
Épisodes

21
Classification

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