Wishing to live in a more open society, it recently struck me that we all keep our personal money matters way too secret. I suspect it has something to do with the old Puritan belief that money is dirty, and that the love of money is the root of all evil. We don’t have to love money to talk openly and honestly about it. So that’s what I’m doing in this post.
An old friend getting ready to retire in the next couple of years asked me, once again, about my investment strategy and about specific stock investments. “I don’t play the stock market, “ I warned him. “I don’t try to buy low and sell high. I just look for a stock that will provide steady income, that I can hold on to.”
Of course, I love to buy low and sell high. But that’s not my primary goal, or primary strategy. My primary goal is simply to establish a little extra monthly income to supplement Social Security. I buy income stocks not only for my monthly expenses and to do a little travel, but also because if I get hit by a cab my kids will inherit that monthly income stream. Which seems like a good thing.
So I look for stocks that have good fundamentals, a good dividend (I like 5% or so) and good prospects for the future. What Warren Buffet calls “sleep easy” stocks. Finding such stocks takes time, and is never perfectly accomplished. Still, “good fundamentals, good dividend, good prospects” is the ideal.
So here are ten stocks in which I am currently invested and in which I have the largest holdings.
- 1. Triton International, (TRTN) which at $31. 67 a share has a 7 % dividend yield. I love Triton. This is the world’s largest shipping container company. As long as people keep shipping stuff all over the world —as long as Walmart keeps importing stuff and we keep buying it —Triton should keep on going. I’ve ridden Triton up and down and up and down, adding to my holdings over the years. I have absolutely no idea where the price is going next. That’s not what I look for. As I said, I buy income. And I believe the global economy is here to stay. That’s why I own a shipping container company.
- Alliance Resource Partners (ARLP) at $22.43 a share pays a 7.8% dividend. I’m a little embarrassed by this one. It’s a coal company. Nobody likes coal companies. So that’s why it pays such a high dividend. I’m in the process of (slowly) selling my position in this one, because, like everybody says, coal is on the way out. But their fundamentals are good, and the dividend is strong. And, oh yea, coal is what powers the computer I’m writing on. Re.: Propsects: It’s going to take another five years or more, at least, and maybe double or quadruple that time. (I do hope it’s quicker) for us to walk away from the coal fired plants giving us electricity. In the meantime, Chicago gets its electricity from the coal that Alliance digs. And the scrubbers are getting better and better. Like I said. I’m a little embarrassed about this one. I’m slowly selling, when I find a good place to put the proceeds. I’m willing to take a lower dividend for cleaner energy.
- Con Ed (ED), which at $83.33 pays a 3.33% dividend. What can I say. It’s Con Ed, one of the biggest utility companies in the world. As long as people keep paying their utility bills (which 99% of the people will do, because we all like hot water and our lights on at night) Con Ed should keep paying its dividend. We inherited this one from my mother-in-law. It’s a good mother-in-law stock. If you’re nervous about putting money in the stock market, Con Ed is a good place to start. Whether it will go up from here or down from here, I don’t know. I just buy income. Con Ed has income, and shares it.
- 4. AT&T (T) which at $38.88 pays a 5% dividend. Again, this is a mother-in-law type of stock, though I bought it myself. (I like mother-in-law stocks. That’s another way of saying, “sleep easy” stocks.) It’s AT.&T. What can I say? Sure, you can argue for, against, up, down… but it qualifies.
- Costamere (CMRE) at $6.79 a share, it pays a 5.89% dividend. This is a relatively new one for me. It’s a Greek shipping company. All shipping companies took a real beating recently when one of the largest shipping companies declared bankruptcy. And Greece as a country is in hot water. But to me, Costamere seems undervalued at this price. And the dividend seems strong. I like shipping companies, to go along with my container companies. Again, I believe globalization is here to stay. I could be wrong.
- Eaton Vance Tax Advantaged Global Divide Fund (ETO) at $22.02 pays a fat 8.99% dividend—and a somewhat tax advantaged dividend at that. For folks who prefer a mutual fund over single stocks, you might want to look at this one. I do own a number of other mutual funds… most of which have not done squat. Research says people can do just as well as a mutual fund by selecting individual companies on their own. Who knows. I do like this one, and it pays nice, and it pays every month. Its my largest mutual fund holding. I have no idea where it’s going from here.
- Main Street Capital (MAIN) at $39.22 pays a 5.36% dividend. This one also pays every month. This is a financial services company—basically they loan money to other companies. They do a pretty good job of it. Twice a year they have “special dividends,” which is also nice. Not fancy at all. But steady and with a good reputation.
- Royal Dutch Shell (RDS.B) at $56.20 pays a 6.69% dividend. A number of years back I noticed that many, many gas stations in our town started showing up under the Shell sign. I wondered what the heck Shell was up to. Of all the major oil companies, Shell has the highest dividend. Of course they have a crummy reputation—as do all major oil companies. But I still use gasoline because I regularly drive my car. I notice other people do too. When I fill up, I generally try to find a Shell station, which isn’t hard at all. I grin a little, standing at the gas pump, knowing I’m selling gas to myself.
- Ciner Resources (CINR) at $28.80 a share, pays a 7.88% dividend. This is the newest addition to my portfolio, and I don’t have a very big position, but it may get bigger. Ciner owns a soda ash mine in Wyoming and they sell the stuff all over the world. I didn’t know soda ash was used for so many things, like flat glass, container glass, detergents, chemicals, and a long, long list of other stuff. I generally shy away from companies that depend on just one particular mine or factory — but this one intrigues me, first, because it’s in Wyoming, and I just might go look at what they’re doing, and second because soda ash is such a little known but widely used material. I’m going to look deeper into it.
- Public Storage, PSA at $207.04 pays a 3.86% dividend. I love Public Storage. This seems to be another of those things that people will continue to use no matter what the economy is doing. At 3.86% dividend, it’s not bad—three times what some banks are paying. But when I first bought it, they were paying 5%. They still pay the same dividend, the price has gone up.
For the past five years, since retiring from daily work, I’ve averaged about 6% return on our investments. I’m certainly no Warren Buffet, nor much of a risk taker. But I’m fairly comfortable being a shareholder in these companies, and absolutely comfortable receiving their dividends. I have investments in some other companies, but these are where a fairly good percentage of our retirement income comes from.
I would be interested in feedback, at whatever level you care to offer it. (“From You shouldn’t invest in those dirty s.o.b.’s” on up. ) Or if you have other ideas about stocks and investing, let me know. I love talking about stocks. Hope this was interesting….
Yours in communal prosperity… .