Mid-year 2023 Portfolio Update

I made changes to my portfolios in 2023 and updated all my portfolio pages. This year has been a stinker if you’re gauging performance by stock price. Dividend income however continues to be steady and rising.

Dividend growth across all three of my portfolios is about 3% while total value of my portfolio is down 3.8% so far this year. Given the fact my goals for these portfolios are to maintain relative value while providing dividend income to live off of, I would say I’m doing pretty well.

The changes to my Medium Yield Portfolio are as follows:

  • Sold position in Magellan Midstream Parters (MMP)
    • Magellan agreed to be acquired by ONEOK (OKE) this month and there didn’t seem to be any advantage to holding this stock. I already own shares in ONEOK. I took my profits on MMP and put them into shares of Enterprise Products Partners (EPD)
  • Sold position in Necessity Retail (RTL)
    • The short term future for Necessity Retail doesn’t look all that bright. With the fed raising rates all the time and leases coming due this REIT may have to cut their dividend in order to service its debt. Some of their tenants even filed for bankruptcy this year. While their dividend yield is a whopping 14.3% right now it’s only so high because their stock price is sow low. I took the loss on the stock and put the money into Highwoods Properties (HIW).
  • Increased position in Enterprise Products Partners (EPD).
    • EPD is master limited partnership that services producers and consumers of natural gas, crude oil, and other petrochemical products. They’ve been in business since 1968 and is a financially conservative company. While demand for fossil fuels remain stable this company is a reasonable risk with a decent dividend yield of 7.71%
  • Purchased Highwoods Properties (HIW).
    • HIW is a REIT that owns, develops, acquires, leases, and manages properties primarily in the southeastern United States. Their current dividend Yield is 9.87% and has an 18 year streak without a reduction. During the recession of 2008 they maintained their dividend. Since their properties are in high growth areas of the country I expect their portfolio of properties to perform better than some other REITs.

The changes to my High Yield Portfolio are as follows:

  • Sold position in CorEnergy Infrastructure Trust (CORR).
    • CorEnergy had problems during the pandemic when two of their tenants stopped honoring their leases. While they made changes then to shore up their operation they also acquired Crimson and its pipelines for $350 million. They’ve suffered disruptions from the Russia/Ukraine conflict, permitting problems in California, and had customers in the Bay Area reduced usage of CORR’s infrastructure. Their issues in California caused them to stop paying dividends in February. I sold my shares on the same day they made this announcement. I put that money into Medical Properties Trust (MPW)
  • Sold position in Necessity Retail (RTL). See reasons stated above.
    • I put this money into Pioneer Natural Resources (PXD).
  • Purchased Medical Properties Trust (MPW).
    • MPW is one of the world’s largest owners of hospitals. Their properties are primarily leased or mortgaged by hospital operating companies. While there is a lot of risk associated with hospital operators MPW has diversified its business to reduce its risk profile. No property exceeds 3% of their investment base and 1/3 of their business is outside the United States. Their properties are under long term lease agreements with parent company guarantees or default provisions. Their dividend yield is currently 15.18% largely due to the decline in their stock price. If the economy picks back up this stock could be undervalued and receive a good jumpstart should interest rates start to go back down.
  • Purchased Pioneer Natural Resources (PXD)
    • PXD is an independent oil and gas exploration and production company in the U.S. They have a variable dividend that has been tracking at about 11.16% of late. Their payout will be directly tied to the price of energy but I believe there will be no collapse in the price of oil and gas in the near future. PXD was founded in 1997 and it’s operations are in the Midland Basin in West Texas.

There were no changes to my Low Yield Portfolio so far this year. I updated the portfolio page to reflect the current stock prices and dividend yields. The fluctuation of prices changes the yields and sector distributions slightly even though I haven’t sold or purchased anything for this portfolio.