Saturday, January 29, 2022

Week in Review

It's been an exciting week in the Dividend Town portfolio and February will be no exception. Earnings announcements in January have been overall favorable. Information is below from Seeking Alpha. 

Earnings Update
  • $AAPLThe Cupertino, California-based Apple said it earned $2.10 a share on $123.95 billion in revenue, led by strength in the iPhone, which generated $71.6 billion in sales during the quarter. A consensus of Wall Street analysts expected the company to earn $1.89 a share on $118.4 billion in revenue during the quarter.
  • $V - Visa (NYSE:V) stock gains 5.2% in after-hours trading as card transactions increase year-over-year during the card network's fiscal Q1 and cross-border volume continues to rise.
  • $CVX - Chevron (NYSE:CVX) caps off a great 2021 with mixed Q4 results and conservative 2022 production outlook; shares are down 2-3% in light pre-market trading. Adjusted earnings per share came in at $2.56 in Q4, versus an expectation of $3.13, as the international upstream business missed by ~60c on the back of LNG trading, catch up depreciation and impairments. The company sees production in 2022 falling 0-3%, as contract expirations in Indonesia and Thailand pull volumes 5% lower.
The goal of the portfolio is to invest in high quality companies that have a history of continuously increasing their dividends. Almost all the companies in the DT portfolio meet this characteristic with very few exceptions. This has pushed up the annual income expected by $26! As a result of this, we've started off the year with some dividend increases! Information below comes from SimplySafeDividends.

Dividend Increases
  • Polaris announced its next dividend of $0.64 per share, a 1.6% increase over the company's previous payout of $0.63.

    The leader in off-road vehicles balanced historically strong demand for its high-priced products and supply chain issues to generate record sales in 2021. The snowmobile maker has excellent dividend coverage and looks poised to continue its growth streak.  Annual income increased $1.68 as a result.

  • Comcast announced its next dividend of $0.27 per share, a 8.0% increase over the company's previous payout of $0.25.

    The media and technology company's expanding broadband network is attracting new customers and helping grow cash flow to record levels. Strong demand and a conservative payout ratio should help Comcast keep growing its dividend.

  • Chevron announced its next dividend of $1.42 per share, a 6.0% increase over the company's previous payout of $1.34.

    The AA- rated energy giant's ample cash flow from oil trading well above the company's breakeven price, in the $40-50 range, should continue to support a stable and growing dividend.  Annual income increased $22.40 as a result.

  • Anthem announced its next dividend of $1.28 per share, a 13% increase over the company's previous payout of $1.13.

    The A rated health benefits company has a strong track record of growing earnings plus a healthy payout ratio and flexible balance sheet. Anthem looks positioned to keep growing the dividend. Annual income increased $2.40 as a result.

February looks to be an exciting month of earnings releases with the calendar below.
StockRover Earnings Calendar

Trades
  • Purchased 45 shares of $ETO to the portfolio. This increased the Projected Annual Dividend Income by $97.
Dividends Received - There were no dividends received this week.

Options Activity
  • Rolled a 01/28 $50 Kroger covered call into a 02/11 $45 this week, netting $144 premium on the $45. Kroger has been on a hot streak lately and I believe they are overvalued. Additionally, I'm slowly looking to trim the number of portfolio holdings to 40 so I do not mind if this gets assigned.
  • Closed a Verizon Iron Butterfly 50-52-54 for a very minimal profit. 
  • Closed an ABBV put due to expire on 01/28. This was a miss.
  • Was assigned a Comcast (CMCSA) put RIGHT in the money!  I've wanted to add Comcast to the portfolio to beef up the communications sector and sold a $50 strike / 01/28 expiration cash-secured put on 01/18 for $114 premium. Comcast closed yesterday at $49.72 so I don't think I could have done any better! These shares added $108 to Projected Annual Dividend Income.
Other Activity
  • Added $1,000 to the portfolio in savings in January meeting my goal for the year.
What's Next
  • Honestly, not much. I've been pleased with the performance during the recent market choppiness, where the portfolio diversification has helped ensure the fluctuations are not as wild as the Nasdaq index.
  • Evaluate covered call opportunities. 
  • Slowly shrink number of positions to ~40 while maintaining a similar sector breakdown. 
Hope everyone has a great weekend!

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