June Monthly Dividend Payouts and Portfolio Updates!

The month of June was plagued with the uncertainty caused by the announcement that United Kingdom leaving the European Union. This announcement caused the stock market to drop after the news was released but it now appears to have rebounded back to it’s original spot. It had little effect on my portfolio and on my Monthly Dividend payouts!

I auto-transferred $300.00 into Robinhood in June. I have it set up to send $150 twice a month. The plan is to up this amount once the car is paid off as well as add additional one-offs every month in order to continue raising the amount of money I have available to invest. The one-off deposits will fluctuate based off how much is left at the end of the month.

I did some clean-up on the portfolio. I sold some stocks that I felt had skyrocketed above their price and felt that locking in profit was the right thing to do.

June Portfolio Update

  1. Sold 17 shares of WMT @ $70.75. This was my entire position.
  2. Bought 30 shares of MSFT @ $50.00. This is an entirely new position.
  3. Bought 25 shares of TGT @ $67.04. This is an entirely new position.
  4. Sold 5 shares of ABT @ $39.55. This was my entire position
  5. Sold 52 shares of NFLX @ $96.50. This was my entire position.

The big story here was the selling of my shares of NFLX. Thankfully I sold them at a profit (albeit minimal) and can use that capital to continue with my game plan of investing in good growth dividend stocks.

June Monthly Dividend

  • F–          50 shares @ $0.15 = $7.50
  • WMT–   17 shares @ $0.50 = $ 8.50
  • JNJ–      10 shares @ $0.80 = $8.00
  • MAIN–   77 shares @ $0.18 = $13.86
  • CLDT–   32 shares @ $0.11 = $3.52
  • MAIN–    77 shares @ $0.28 = $21.18
  • ARCC–   50 shares @ $0.38 = $19.00

Total for June: $81.56

It’s been a pretty good month overall for the portfolio. My financial goals for the next month is to add an additional one-off deposit of $150 to the portfolio. Add this on top of the auto-deposit of the $300 that will happen in July will let me have $450 to invest in.

You can check out my portfolio to see my latest holdings.

HCP Spinoff – Is the Dividend Safe?

hcp_logo hcp spinoff

Overall, everything is looking good for HCP outside of the potential issues with the HCP Spinoff. They released earnings a few days ago and in a nutshell:

  • Q1 adjusted FFO of $321.8M or $0.69 per share vs. $364.3M and $0.79 one year ago.
  • FAD of $0.66 vs. $0.69.
  • Dividend is $0.575.

Portfolio wise, since I purchased them, it had equity growth over 12% and 2 dividend payouts of $35The dividend yield is over 6.5%,  so everything seems to be good. So what’s with the post? Well the surprise announcement that they are spinning off part of their portfolio in a new, publicly-traded REIT(SpinCo).

HCP Spinoff

HCP announced the intention to spin off its HCR ManorCare (HCRMC) real estate portfolio in a new, publicly-traded REIT(SpinCo). 

Financially, we’re seeing a drop of income for HCP of 26% from 1.9Bn to 1.4Bn. So right away, that’s a healthy chunk of money being taken out. Owners of HCP stock will continue to have the same amount of shares and will be given shares in the new SpinCo stock as a tax-free return. No word yet on whether or not the new stock will have a dividend. 

hcp spinoff split dividend
http://ir.hcpi.com/download/Proposed+Spin-Off+Presentation.pdf

 

If I were to make some guesses, I would assume the HCP and HCP Spinoff: SpinCo dividend will be recalculated based off the split. So HCP dividend will but lowered and in effect, the stock will decrease in price to compensate. The ideal decrease is to keep the dividend yield the same for HCP. From the Conference Call transcripts, management restated that they remain focused on dividend growth for HCP; so that’s a good sign. But they did not have any real answers on SpinCo’s dividend and that it will be decided by the board. You can read the entire earning call transcript here.

The rules of Dividend Noob are pretty simple.

  1. Preserve Equity : Nobody wants to lose money and with the stock split, there is a good chance we’ll see the price of the stock go down. But what about the shares in the new company as the offset? It’s a big unknown right now and I’m not in the game of gambling. I’ve had a healthy return of 12% on equity, as well as dividend payouts on HCP. Getting out might be the correct call until things stabilize with HCP.
  2. Dividend Growth: I want the dividend to be stable and to ideally go up each year. More income on the exact same equity invested is great. It’s even more free money! HCP has been great in dividend growth. They are a Dividend Aristocrat.
  3. Stock Growth: It’s why everybody wants to play the big game of stocks. The fact we invest money in hopes that it will be worth even more in the future is the whole reason!

So with the unknown in the forecast, I have decided to sell my shares of HCP.

Will You Get back Into HCP?

Once the smoke has settled on the spin off, I’ll re-evaluate and decide from there. I’m not opposed to it, since HCP is obviously a great company with an outstanding track record in dividend payout. They are a Dividend Aristocrat for a reason!

Where Will the Money Go From HCP?

No idea right now. There’s a few stocks that I have my eye on but the overall market sentiment is pretty bearish. There’s a ton of better dividend blogs talking about just stockpiling cash reserves for the time being. Maybe its something I should do? I’ll have to figure it out as I go. They don’t call me the Noob for nothing.

Disclaimer: I have owned and sold HCP within the last few days. My opinions about the HCP Spinoff are my own.